Iberdrola buys ENW distributor for 5 billion euros

Iberdrola signed this Friday the acquisition of 88% of the English electricity company Electricity North West ( ENW ) for a value of 2.1 billion pounds ( 2.5 billion euros ) in equity. The total value of the company for 100%, including debt, amounts to 5 billion euros. 

This acquisition is part of Iberdrola ‘s strategy to boost its network business in countries with solid ratings, such as the United Kingdom’s AA credit rating. Since the purchase of Scottish Power, the United Kingdom has been one of Iberdrola’s investment destinations, with nearly 36 billion euros. Iberdrola is also the only utility in the country that generates 100% of its energy emission-free.

With this transaction, the United Kingdom becomes the company’s largest country in terms of network assets, with around 14 billion euros, followed by the United States with 13.3 billion euros. 

Iberdrola Chairman Ignacio Galán said: “With this transaction we continue our commitment to investments in electricity networks, 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 operation, our regulated network assets in the United Kingdom 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 represents a unique opportunity for Iberdrola, as it is the company that sits between Scottish Power’s two distribution companies in Scotland. ENW distributes electricity to almost five million customers in the north-west 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 grid business , making it the second regulated electricity transmission and distribution company in the United Kingdom. From now on, Iberdrola will distribute electricity to around 12 million people and will have more than 170,000 kilometres of grids. In addition, it will employ more than 8,500 people throughout the country. 

Iberdrola and a consortium of Japanese investors led by Kansai, which will hold 12% of ENW’s capital, have signed a shareholders’ agreement to collaborate on a long-term basis.

The operation is subject to the usual authorizations for this type of transaction. 

A UK GROWTH STORY

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 experienced 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, owning and operating the transmission network in southern Scotland and distribution networks in south-central Scotland and Merseyside, north Wales and Cheshire.  

Iberdrola currently has more than 111,400 km of power lines installed in the country and 40 onshore and 2 offshore wind farms in operation, with a total renewable capacity of more than 3,000 MW that supplies the equivalent of more than two million homes. This allows it to generate 100% of its energy emission-free.

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.