Iberdrola buys distributor ENW for 5 billion euros
Iberdrola has signed the acquisition of 88% of the British electricity company Electricity North West (ENW) for an equity value of 2.1 billion pounds sterling - 2.5 billion euros. The total value of the company for 100% including debt amounts to 5,000 million euros.
This acquisition is part of Iberdrola's strategy to strengthen its network business in countries with solid ratings, such as the UK's AA credit rating. Since the purchase of Scottish Power, the UK has been one of Iberdrola's investment destinations with close to 36 billion euros. Iberdrola is also the only utility in the country that generates 100% emission-free energy.
With this operation, the United Kingdom becomes the company's leading country in terms of network asset base, with around 14,000 million euros, followed by the United States with 13,300 million euros.
Iberdrola's Chairman, Ignacio Galán, said: "With this transaction we continue our commitment to investments in electricity grids, a fundamental factor for the electrification and decarbonisation of the economy, and to countries with ambitious investment plans that have stable and predictable regulations. As a result of this transaction, our regulated network assets in the UK reach 14 billion euros, which, together with a similar amount in the United States, represent two-thirds of all the group's network assets".
ENW is a unique opportunity for Iberdrola as the company that sits between Scottish Power's two distribution companies in Scotland.
ENW distributes electricity to almost five million customers in the northwest of England, in cities such as Manchester, Lancaster and Barrow, and has 60,000 km of electricity distribution networks.
The acquisition accelerates Iberdrola's commitment and growth in the networks business, making it the second largest regulated electricity transmission and distribution company in the UK. Iberdrola will now distribute electricity to around 12 million people and will have more than 170,000 kilometres of networks. It will also employ more than 8,500 people across the country.
Iberdrola and a consortium of Japanese investors led by Kansai, which will hold a 12% stake in ENW, have signed a shareholders' agreement for long-term cooperation.
The deal is subject to the usual approvals for such transactions.
A history of growth in the UK
Iberdrola acquired its UK subsidiary Scottish Power in 2007, in line with its long-term strategy to be a world leader in the global energy market. Since then, the company has enjoyed high growth and is the only vertically integrated energy company in the country.
Scottish Power is one of the largest investors in renewable energy in the country, and owns and operates the South of Scotland transmission network and distribution networks in South Central Scotland and Merseyside, North Wales and Cheshire.
Iberdrola currently has more than 111,400 km of installed power lines in the country and 40 onshore and 2 offshore wind farms in operation, with a total renewable capacity of more than 3,000 MW, supplying the equivalent of more than two million homes. This allows it to generate 100% emission-free energy.
As part of its growth plans, the company is building the East Anglia Three offshore wind farm, the second largest in the world, with a total capacity of 1,400 MW.
