Spanish utility Iberdrola has agreed to acquire the remaining 18.4% stake in its US subsidiary Avangrid in a $2.6bn (€2.39bn) all-cash transaction.

The move will increase Iberdrola’s shareholding to 100%. The purchase price of $35.75 per share has been approved by Avangrid’s board of directors.

The offer is at a premium of 11.4% over Avangrid’s closing stock price on 6 March 2024, the last trading day before the announcement of Iberdrola’s initial proposal.

The premium extends to 15.2% over the previous 30-day volume-weighted average price.

Avangrid plans to maintain its regular quarterly cash dividends, capped at $0.440 per share, until the completion of the transaction.

The acquisition will be finalised in the fourth quarter of 2024, pending approval from shareholders and regulatory bodies including the Federal Energy Regulatory Commission and state commissions in New York and Maine.

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Post-acquisition, Iberdrola intends to remove Avangrid’s listing from the NYSE.

The acquisition aligns with Iberdrola’s strategy to bolster its presence in the US networks business at a crucial time, focusing on markets with robust credit ratings and regulated sectors.

Avangrid president and CEO Pedro Azagra stated: “We are excited about Iberdrola’s continued investment in Avangrid and commitment to the United States.

“As a wholly owned member of the Iberdrola Group, we will continue to serve our customers and build our renewable energy assets work to achieve our vision to lead the clean energy transition with a strong commitment to sustainability, community, governance and our employees.”

Avangrid, headquartered in Connecticut, holds $44bn in assets and operates in 24 US states.

Its operations are divided into networks serving 3.3 million customers in New York and New England, and renewable energy, with a portfolio of generation facilities across the US.

The company employs 8,000 staff and reported adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of $2.43bn in 2023.

The deal follows the collapse of Avangrid’s $8.3bn merger with PNM Resources, which was called off after failing to secure regulatory approval.

Iberdrola had previously stated that the conditions for the merger, agreed upon in October 2020, were not met within the specified timeframe.