Jan 2, 2024 - Business

Avangrid scraps $4.3 billion takeover of PNM Resources

Avangrid wind power project in Texas

Avangrid wind power project in Texas. Photo: Eddie Seal/Bloomberg via Getty Images

Spain's Iberdrola on Tuesday terminated its $4.3 billion agreement to acquire Albuquerque-based utility PNM Resources, which it would have merged with U.S. renewables business Avangrid.

Why it matters: This is a reminder that state regulators can be just as thorny for dealmakers as are federal regulators.

Details: This merger was inked in late 2020 and touted as creating the country's third-largest renewable energy company. But New Mexico utility authorities rejected the deal in 2021, leading to a protracted court battle that Iberdrola opted to end.

  • PNM had offered to again extend the closing deadline, and says it's "greatly disappointed" by Iberdrola's decision.
  • With assumed debt included, the merger would have been worth more than $8.5 billion.

What to watch: Iberdrola may seek reduce its 81.6% stake in Avangrid, which trades on the New York Stock Exchange with around a $12.5 billion market cap.

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