By Adria Calatayud
Iberdrola’s U.S. renewables subsidiary Avangrid has ended a merger agreement with power company PNM Resources after rejecting a bid to extend the deadline of the $4.3 billion deal reached in October 2020.
The Spanish energy company said Tuesday that Avangrid–which is 81.5%-owned by Iberdrola and houses its U.S. renewable-energy assets as well as electric and natural-gas utilities–terminated the deal after conditions for closing it weren’t met in the timeframe the parties agreed to.
PNM Resources separately said that its board of directors approved an extension that wasn’t accepted by Avangrid. PNM Resources Chairman and Chief Executive Pat Vincent-Collawn said the company was disappointed with Avangrid’s decision to terminate the agreement.
Avangrid’s move to call off the deal caps a yearslong process that was complicated by regulatory opposition to the companies’ attempt to join forces to invest in the infrastructure and new technologies amid the transition toward clean energy.
Avangrid in October 2020 agreed to buy Albuquerque, N.M.-based PNM Resources for about $4.3 billion in cash in a deal that was originally expected to be closed by the end of 2021. At the time, the companies said the combination would have created a business with more than 4 million electric and natural-gas utility customers and more than 7.4 gigawatts of renewable assets.
However, the proposed transaction hit a roadblock in 2021, when New Mexico regulators rejected it.
The deal had been extended through Dec. 31, 2023, while awaiting a decision from the New Mexico Supreme Court on a January 2022 appeal of the New Mexico Public Regulation Commission decision denying the transaction, PNM Resources said.
Iberdrola executives said during an earnings call in October that they were looking at several opportunities in the U.S. in case the PNM Resources deal didn’t go through. A sale of a minority stake in Avangrid was among the options being considered, Iberdrola Chief Financial Officer Jose Sainz Armada said.
PNM Resources said it remains focused on the infrastructure investments necessary to meet customers’ future energy needs.
Write to Adria Calatayud at [email protected]
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