Avangrid Agrees to Acquire Remaining Shares

Avangrid, Inc. (NYSE: AGR) has announced that it has entered into a definitive agreement with Iberdrola, S.A. ("Iberdrola") for the acquisition of the remaining 18.4% of the issued and outstanding shares of common stock of Avangrid that it does not currently own. This agreement will see Avangrid shareholders receive $35.75 per share in an all-cash transaction.

The $35.75 per share price represents a 11.4% premium over the closing price of Avangrid common stock on March 6, 2024, the last unaffected trading day prior to Avangrid’s announcement of receipt of Iberdrola’s unsolicited offer. It also represents a 15.2% premium over the volume-weighted average price of Avangrid common stock over the 30 trading days leading up to the unaffected trading day.

Avangrid expects to continue paying regular quarterly cash dividends not to exceed $0.440 per share through the closing of the transaction, including a pro-rated dividend for any partial quarter prior to the closing.

The transaction is expected to close in the fourth quarter of 2024, subject to the satisfaction of customary closing conditions, including receipt of shareholder approvals and the approval of the Federal Energy Regulatory Commission, the Maine Public Utilities Commission, and the New York Public Service Commission. The transaction is not subject to a financing condition.

Avangrid's President and CEO, Pedro Azagra, expressed excitement about Iberdrola’s continued investment in Avangrid and its commitment to the United States. Azagra stated that as a wholly-owned member of the Iberdrola group, Avangrid will continue to serve its customers, build renewable energy assets, and work towards leading the clean energy transition with a strong commitment to sustainability, community, governance, and employees.

Moelis & Company LLC is serving as financial advisor to the special committee, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to the special committee. Latham & Watkins LLP is serving as legal advisor to Avangrid. Meanwhile, Morgan Stanley & Co. LLC is serving as financial advisor to Iberdrola, and White & Case LLP and Clifford Chance are serving as legal advisors to Iberdrola.

Avangrid, with approximately $45 billion in assets and operations in 24 U.S. states, aspires to be the leading sustainable energy company in the United States. It operates in two primary lines of business: networks and renewables. Through its networks business, Avangrid owns and operates eight electric and natural gas utilities, serving more than 3.3 million customers in New York and New England. Through its renewables business, Avangrid owns and operates a portfolio of renewable energy generation facilities across the United States. The company employs approximately 8,000 people.

The acquisition by Iberdrola marks a significant development for Avangrid as it continues to make strides in the sustainable energy sector and solidify its position as a leading player in the U.S. market. Following these announcements, the company's shares moved -4.7%, and are now trading at a price of $35.76. Check out the company's full 8-K submission here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.