Iberdrola Offers to Take Neoenergia Private for $1.2 Billion
(Bloomberg) -- Iberdrola SA offered to buy the shares it doesn’t already own in Brazilian utility Neoenergia SA, the latest move to strengthen its international power grids business in key markets.
The Spanish energy giant offered 32.5 reais per share in cash, valuing the 16.2% stake at 6.4 billion reais ($1.2 billion), with a view to delisting the unit, according to a regulatory filing Monday. The offer represents a premium of about 8% to Neoenergia’s closing price on Friday and the same price that Iberdrola paid to buy a 30% stake in September.
The full takeover is part of Iberdrola’s strategy to focus on markets where it sees the most future growth, with the bulk of investments aimed at power grids that will need upgrades to cope with fast-growing clean energy output and surging demand from data centers.
Brazil, along with the US and the UK, is one of the key markets identified by Iberdrola, with networks representing about 90% of Neoenergia’s business.
The acquisition would “increase Iberdrola’s exposure to networks in a country with a long-standing and favorable regulatory framework,” RBC Capital Markets LLC analyst Fernando Garcia wrote in a note.
Shares of Neoenergia jumped as much as 7.9% in Sao Paulo, trading close to the offered price, while Iberdrola edged 0.6% higher in Madrid.
Ibedrola said the offer “seeks to simplify Neoenergia’s corporate and organizational structure, allowing for greater flexibility in the financial and operating management of its activities.”
The offer follows Iberdrola’s acquisition of its remaining stake in US unit Avangrid Inc. last year.
Iberdrola is planning to spend about €58 billion through 2028, with 30% earmarked for the US and about 12% for Brazil.
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