Wind Power

Iberdrola Completes Acquisition of Energy East

Iberdrola S.A. has closed the friendly acquisition of U.S. utility Energy East Corporation, a transaction finally valued at EUR 3.22 billion [US $4.66 billion] in cash plus another EUR 2.87 [US $4.16 billion] billion in debt, a total of EUR 6.09 billion [US $8.82 billion].

The company had already arranged financing for the acquisition through a €3.4 billion [US $4.9 billion] capital increase, raised via an Accelerated Bookbuilding Offer (ABO) in June last year. As announced when the acquisition was announced on June 25, 2007, the transaction is being effected through a merger by absorption of Green Acquisition Capital Inc. into Energy East Corporation, valuing each Energy East share at US $28.50. This represents a premium of 20.2% over the average share price for the 30 days prior to the offer announcement.

The acquisition of Energy East, the largest industrial transaction ever carried out by a Spanish company in the U.S., allows Iberdrola to increase its assets in the U.S. to around US $20 billion. With Energy East, Iberdrola enhances its presence in the U.S. market, where it is already the second largest in wind power through its renewable energy subsidiary with nearly 2,000 MW in operating capacity. Plans are to reach 6,900 MW in operating capacity by 2012.

Last week, reported that the New York Public Service Commision had given the green light to the deal. The commission did however set conditions to allow the merger to go forward including forcing Iberdrola sell off all of Energy East’s fossil fuel generating assets and forcing Iberdrola to invest in wind energy in the state.