Avangrid, the U.S.-based unit of Spanish power big Iberdrola, stated it has terminated its deliberate acquisition of New Mexico utility PNM Sources after failing to obtain closing approval for the $8.3 billion deal from state regulators.
Avangrid officers in an announcement on Jan. 2 stated the group wanted to obtain approval for the deal from the New Mexico Public Regulation Fee by year-end 2023. The fee beforehand had rejected the proposed acquisition in 2021, citing “high quality of service points” with Avangrid. The unique deal was unanimously permitted by PNM’s administrators in 2020. The fee earlier stated the settlement’s dangers have been larger than potential advantages to the utility’s prospects.
The deal included Avangrid taking up $4 billion of PNM debt. PNM Sources in an announcement stated, “Whereas the PNM Sources Board of Administrators permitted an extension [for the agreement], it was not accepted by Avangrid and Avangrid terminated the merger.”
Iberdrola in an announcement stated, “Avangrid Inc.. has right this moment introduced its resolution to terminate the merger settlement entered into with PNM Sources Inc. on 20 October 2020, on condition that the situations supplied within the settlement for the closing of the transaction haven’t been met within the time period contemplated.”
Dissatisfied in Resolution
“We’re vastly dissatisfied with Avangrid’s resolution to terminate the merger settlement and its proposed advantages to our prospects, communities and shareholders,” stated Pat Vincent-Collawn, PNM Sources chairman and CEO, in a information launch. “As we transfer ahead, our strategic plans stay centered on the infrastructure investments crucial to satisfy the long run power wants of our prospects and communities.”
The merger had been touted as a approach to offer PNM’s prospects with extra renewable power and additional assist Iberdrola’s U.S. presence. Avangrid on Tuesday stated it had obtained different approvals crucial for the acquisition to maneuver ahead, however didn’t point out whether or not it might take additional motion to resurrect the deal, saying “With the shut of 2023 there may be nonetheless no clear timing on the decision of the courtroom assessment of the New Mexico regulator’s denial of the merger nor any subsequent regulatory actions.” The corporate stated the phrases of the deal enabled each Avangrid and PNM to terminate the settlement “if the merger had not but been consummated” by year-end 2023.
The corporate’s assertion did say Avangrid would nonetheless work “to carry clear, reasonably priced, and renewable power to New Mexico and the 23 states we function in throughout the nation. Whereas our merger settlement with PNM has been terminated, we stay greater than ever steadfast in our dedication to New Mexico within the growth of wind and photo voltaic renewables.”
U.S. Presence
Iberdrola by way of Avangrid has established a robust presence within the U.S. renewable power market, with initiatives in Maine and New York value about $7 billion, in line with the corporate. It is also supporting the Winery Wind offshore wind undertaking off the coast of Massachusetts. Avangrid has stated it has a $5 billion plan to repower the corporate’s current U.S. wind energy property to make the most of advantages supplied within the Inflation Discount Act.
Officers on Tuesday stated the merger with PNM Sources had been permitted by 5 U.S. federal businesses, in addition to Texas regulators. PNM serves prospects in each Texas and New Mexico.
New Mexico regulators additionally beforehand stated their rejection of the deal included considerations about Ignacio Galán, Iberdrola’s chair, who had been investigated as a part of a probe into potential felony actions involving Spanish corporations. A Spanish courtroom closed the investigation into Galán in June 2022. The corporate has denied any wrongdoing.
—Darrell Proctor is a senior affiliate editor for POWER (@POWERmagazine).
