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October 21, 2020

CT’s Avangrid to expand into Texas, New Mexico through $8.3B acquisition

Photo | Contributed United Illuminating crews conduct storm cleanup in 2018.
By Matt Pilon

Orange-based utility parent and renewable energy developer Avangrid is set to significantly increase its U.S. footprint through an $8.3 billion acquisition of a New Mexico utilities operator.

Avangrid, which is owned by Spanish energy giant Iberdrola and provides natural gas to nearly 176,000 customers in the Greater Hartford region, announced Wednesday that it has agreed to pay $50.30 per share for PNM Resources, a publicly traded company that operates regulated utilities in its home state and neighboring Texas.

The value of the deal, which expands Avangrid’s utility territory from four states (all in New England and New York) to six, includes $4.3 billion in cash, plus debt. The purchase price represents a 19.3% premium over PNM’s average closing share price over the last 30 days.
“This merger…is a strategic fit and helps us further our growth in both clean energy distribution and transmission, as well as helping to expand our growing leadership position in renewables,” said Avangrid CEO Dennis V. Arriola.

PNM CEO Pat Vincent-Collawn said the combination would “provide greater opportunities to invest in the infrastructure and new technologies that will help us navigate our transition to clean energy while maintaining our commitments to our local teams and communities.”

The transaction is expected to close within the next year, assuming the companies secure needed approvals from various state and federal regulators.

PNM’s utilities provide electricity to approximately 790,000 customers in New Mexico and Texas, which would add to Avangrid’s existing count of 3.3 million customers in the Northeast.

PNM also owns a number of power plants in New Mexico, as well as a portfolio of wind turbines. Meanwhile, Avangrid is one of the largest renewable energy operators in the country, with wind and solar assets in 22 states.

The company has also moved into the offshore wind business in recent years, and co-owns the pending 804-megawatt Park City Wind project, which is expected to provide 14% of Connecticut’s energy needs once completed.

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