Spanish utility Iberdrola has completed the sale of three gas distribution companies in Connecticut and Massachusetts to US based UIL Holdings Corporation, in a transaction valued at approximately $1.25bn after price adjustments.

The equity value received is approximately $918m, an increase after adjustments over the $885m announced in May 2010.

The company said that the sale of the three subsidiaries – Connecticut Natural Gas (CNG), Southern Connecticut Gas (SCG) and Berkshire Gas Company (BGC) – was completed having obtained all the required regulatory approvals.

The companies distribute approximately 56.5 billion cubic feet of natural gas per year to nearly 369,000 customers in the states of Connecticut and Massachusetts.

The sale forms part of Iberdrola’s non-core asset divestment program to maintain the financial strength of the company, optimise its capital structure and deliver the rhythm of investment pledged to the markets.

The transaction follows others announced in 2010 by Iberdrola, including the sales of the Seneca Lake gas storage facility in the US, 15.68% of the share capital of Petroceltic International, 2.7% of the share capital of Portugal-based EDP, and all its indirect shareholding interests in a number of Guatemalan companies.

The proceeds will be used to finance the major infrastructure project that Iberdrola USA, through its Central Maine Power subsidiary, is building in Maine, known as the Maine Power Reliability Program.

This project, benefitting electricity distribution in Massachusetts, New Hampshire and Maine, and the interconnection between Maine and Canada, involves an investment of around $1.4bn and will consist of around 500 miles of new and upgraded electricity transmission lines.