Spanish utility group Iberdrola has reached a merger agreement with the UK’s ScottishPower, the company has said in a statement.
The €17.2 billion deal will see ScottishPower shareholders receive £4 ($8) per share in cash together with £3.65 ($7.3) per share in new Iberdrola shares in a deal to create a company worth some €64 billion. In addition, before the transaction is completed, ScottishPower will approve an extraordinary dividend of 12 pence ($0.24) per share. The offer, which is supported by the ScottishPower board values the company at €17,200 million.
With an installed capacity of 36,600 MW the merged company will own more than 6 GW of renewable capacity and supply more than 21 million consumers.
Ignacio Galán, Iberdrola chairman, commented that “the proposed integration of ScottishPower with Iberdrola, which is consistent with our respective strategic plans, will result in the third largest European utility.
Operating savings deriving from the transaction are expected to reach €130 million a year, coming, among other things, from operating and financial cost savings, improvements in generation and distribution units, and the management of renewable facilities.