Iberdrola, the Spanish multinational electricity utility group, has finalised a deal to acquire 88% of Electricity North West (ENW) for £2.1bn. The acquisition aligns with Iberdrola’s strategy to invest in electricity networks and strengthens its position in the UK market.
This move makes the UK Iberdrola’s leading market by regulated asset base, valued at approximately €14bn, just ahead of the US. ENW, which serves nearly five million people in the North West, will help Iberdrola expand its reach and operations significantly.
Acquisition Details
Iberdrola’s acquisition of ENW includes an 88% stake valued at £2.1bn, with the total valuation of the company, including debt, around €5bn. The deal underscores Iberdrola’s commitment to investing in stable, high-credit countries like the UK.
ENW faced challenges last year with its profits declining due to increased property, plant, and equipment costs. The company’s pre-tax profits dropped to £161.8m for the year ending March 31, 2024, down from £195.5m the previous year, on a slightly increased turnover of £598m.
Iberdrola’s UK Investments
Since merging with ScottishPower in 2007, Iberdrola has invested around £30bn in the UK. This long-term investment strategy has paid off, as the UK now represents Iberdrola’s largest regulated asset base.
ScottishPower, part of the Iberdrola group, is notable for being the only 100% green integrated utility in the UK. It operates both transmission and distribution networks in various parts of the country.
Impact on Electricity Distribution
ENW distributes electricity to almost five million people in the North West, covering areas such as Manchester, Lancaster, and Barrow.
The acquisition brings Iberdrola closer to its goal of supporting the electrification and decarbonisation of the economy. Iberdrola’s network will now span more than 170,000 kilometers in the UK, delivering electricity to around 12 million people.
Strategic Importance
ENW is strategically positioned between two existing ScottishPower networks in central and southern Scotland and Merseyside and North Wales. This geographic advantage helps Iberdrola create a more cohesive and expansive network.
Ignacio Galán, Iberdrola’s executive chairman, emphasised the transaction’s importance for supporting electrification and decarbonisation efforts.
The Role of Renewable Energy
Iberdrola has a significant renewable energy presence in the UK, with over 3,000 MW of installed renewable capacity, enough to power more than two million homes.
The company is also developing the East Anglia Three offshore wind farm, which will be the second largest in the world with a capacity of 1,400 MW.
Job Creation and Economic Impact
The acquisition will enable Iberdrola to employ more than 8,500 people across the UK, contributing to economic growth and job creation.
A consortium of Japanese investors led by Kansai will retain a 12% stake in ENW, maintaining a collaborative shareholders’ agreement for long-term growth.
Future Outlook
With this acquisition, Iberdrola strengthens its position as a leader in the global energy market. The company’s focus on renewable energy and network expansion aligns with global trends toward sustainability and green energy.
Iberdrola’s acquisition of ENW for £2.1bn is a significant move in the UK electricity market. This strategic expansion underscores the company’s commitment to investment in renewable energy and network development.
With its enhanced network capacity and renewable energy projects, Iberdrola is well-positioned to lead the transition towards a more sustainable and electrified economy.