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Iberdrola has emerged victorious in the bid to acquire UK power grid operator Electricity North West (ENW) for approximately €5 billion, including debt, significantly enhancing the Spanish multinational's footprint in Britain.
On Friday, Madrid-based Iberdrola announced its acquisition of an 88 per cent stake in ENW from three shareholders: Equitix, KDM Power, and the Chinese state-backed CNIC, for an equity value of £2.1 billion.
This strategic deal positions the UK as Iberdrola's largest market by regulated assets. Already the owner of Scottish Power, Iberdrola outmanoeuvred French utility giant Engie to secure this acquisition.
ENW distributes electricity to nearly 5 million people in the northwest of England, including the city of Manchester. In contrast, Scottish Power, which Iberdrola purchased for £11 billion in 2007, serves customers in Merseyside, North Wales, and central and southern Scotland.
This acquisition aligns with Iberdrola's long-term strategy to expand its grid management business while continuing to lead the generation of wind and solar power.
Iberdrola executive chair Ignacio Galán said: "This transaction reinforces our commitment to investing significantly in electricity networks, which are a critical component for supporting the electrification and decarbonisation of the economy."
He added that it was "also consistent with our strategy to invest in countries that have ambitious investment plans and stable and predictable regulations".
Iberdrola has emerged victorious in the bid to acquire UK power grid operator Electricity North West (ENW) for approximately €5 billion, including debt, significantly enhancing the Spanish multinational's footprint in Britain.
Once the ENW deal is completed, Iberdrola's regulated asset base in the UK will rise to approximately €14 billion, surpassing the €13.3 billion it holds in the US. The combined value of its regulated assets in the UK and US will constitute two-thirds of the company's total, underscoring its extensive expansion beyond its Spanish origins.
After the deal is completed, KDM Power, a consortium led by Japan's Kansai Electric Power, will retain a 12 per cent stake in ENW.
Iberdrola is a global leader in wind and solar power development and network ownership, with around 43.4 GW of renewable projects operational worldwide. In March, the company outlined plans to allocate approximately 60 per cent of its global investment over the next three years to electricity grids, driven by the increasing demand for network capacity alongside wind and solar power growth.
This deal represents further consolidation in the UK networks sector, following National Grid's £7.8 billion acquisition of Western Power Distribution from the US's PPL in 2021. Other network owners, including Berkshire Hathaway's Northern Powergrid and CK Group's UK Power Networks, will need to invest heavily in the coming years to ensure the networks can support the rise in electric vehicles, heat pumps, and renewable electricity as the UK transitions to a lower-carbon energy system.
BNP Paribas and Barclays advised Iberdrola, while Jefferies advised the sellers.
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