Iberdrola has placed a Eur3.40B (US$4.57B) bid to acquire New York-state based Energy East Corp, which operates a number of hydro power and other generation assets.
The proposed acquisition would see the Spain-based international energy group take on Energy East’s Eur3B (US$4B) debts but introduces hydro power into its North American portfolio. Most of its renewables portfolio, which Iberdrola boosted by acquisitions over the past year, is based on wind power.
Energy East is the third largest hydro generator in New York state. Last year the company increased its output of hydroelectric power by 14%.
In addition to hydro power assets, Energy east also owns combined heat and power projects plus wind, combined cycle gas and clean coal plants.
Iberdrola said contact between the companies started in 2006 and has resulted in a non-contested approach to buy Energy East. With necessary shareholder and regulatory approvals, Iberdrola hopes to reach financial closure on the takeover bid next year.
The mechanism for the takeover would involve Energy East being merged into Iberdrola’s US subsidiary Green Acquisition Capital.