Iberdrola has agreed to acquire Finland-based power distribution company Caruna in a deal that values the business at approximately €5bn, including financial debt.
As part of the agreement, Iberdrola will purchase 80% of Caruna’s equity for €2bn, while Nordic pension funds AMF and Elo will continue to hold the remaining 20% stake.
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Caruna operates as Finland’s largest electricity distribution network, covering around 89,000km, with roughly two-thirds of the infrastructure laid underground.
The company supplies electricity to 1.5 million people, more than a fifth of Finland’s population.
The acquisition is expected to close in the first quarter of 2027, subject to customary regulatory approvals.
Caruna manages its network under two distribution concessions, supplying electricity to the central Helsinki area and the Joensuu region, where there is significant industrial activity and increasing demand driven by new data centres and residential projects.
The company also serves customers in various parts of western and north-eastern Finland.
The acquisition supports Iberdrola’s strategy of focusing investment on electricity networks in stable markets with established regulatory regimes.
In Finland, the current framework for regulation is set to remain in effect until 2031 and includes a regulated return on equity of approximately 8%.
Iberdrola executive chairman Ignacio Galán said: “This transaction reinforces our strategic commitment to electricity networks as essential infrastructure for promoting energy security, self-sufficiency and competitiveness.
“Finland offers high credit quality and a predictable and attractive regulatory framework, while Caruna has strong growth prospects due to the need for networks linked to new renewable generation, rising demand from the industrial and residential sectors and the electrification of the economy.”
Following its acquisition of Caruna and the recent sale of its thermal power plants in Mexico, Iberdrola said the moves strengthen its strategy of focusing on electricity networks.
Iberdrola has projected annual growth in its earnings and asset base of around 7% related to this deal, with planned yearly network investment of between €200m and €300m.
In April this year, Iberdrola completed the €3.41bn sale of its Mexican business after securing all required regulatory approvals. The deal transferred 2.6GW of operational assets to Cox, a global water and energy utility.
