Iberdrola has offered to take full ownership of its US-based subsidiary Avangrid by acquiring the remaining 18.4% it previously didn’t own in the latter for $2.48bn.

The Spanish electric utility has set a price of $34.25 per share to buy out the remaining shares of Avangrid, which is a renewable energy developer based in Connecticut.

Avangrid is listed on the New York Stock Exchange (NYSE). The proposed deal will take the company private.

The offered price is a premium of nearly 10% compared to its weighted average share price of the last 30 days.

Presently, Iberdrola holds around 81.6% of Avangrid’s capital.

Through the deal, Iberdrola aims to expand its presence in the networks sector within the US. Iberdrola is prioritising growth in markets having robust credit ratings, particularly concentrating its efforts on regulated sectors such as networks.

Currently, Avangrid has $44bn in assets and operates in 24 US states. The company focuses on two primary business areas, which are networks and renewables.

In the networks sector, Avangrid oversees eight electric and natural gas companies, catering to over 3.3 million customers in New York and New England.

Simultaneously, in the renewables sector, the company manages a diverse portfolio of renewable energy generation facilities across the US.

With a workforce of around 8,000 employees, Avangrid reported an adjusted gross operating profit (EBITDA) of $2.43bn in 2023, reflecting an increase from $2.24bn in the previous year.

After receiving the non-binding proposal, Avangrid`s board decided that an independent committee will undertake the review, assessment, negotiation, and endorsement or rejection of the proposal.

The committee will be guided by impartial legal and financial advisers and will also explore any alternative proposals or strategic options available to it, said the company.

The completion of the proposed transaction hinges on the approval of both the independent committee and Avangrid shareholders, holding a majority of outstanding common stock shares not owned by Iberdrola or its affiliates.

Avangrid stated: “No decision has yet been made with respect to Avangrid’s response to the proposal or any alternatives thereto. Avangrid’s Board cautions that it has only received a proposal, which does not constitute an offer or proposal capable of acceptance and may be withdrawn at any time and in any manner.

“There can be no assurance that any definitive offer will be made, that any agreement will be executed or that the transaction proposed in the proposal or any other transaction will be approved or completed.”