The boards of directors of Iberdrola S.A. and Iberdrola USA have approved a combination of Iberdrola USA with UIL Holdings.This friendly transaction, recommended by UIL’s board of directors, which will be effected via merger, will allow UIL shareholders to receive 18.5% of the share capital of the combined company plus $597 million in cash, representing a premium of 19.5% over the average UIL share price during the 30 days prior to February 25. Iberdrola USA intends to maintain a dividend policy consistent with that of Iberdrola with a payout of between 65-75%. Iberdrola USA will be listed on the NYSE.
The combination of Iberdrola USA and UIL Holdings, with over 3.1 million of points of supply, approximately 6.7 GW of installed capacity, and pro-forma Ebitda and net earnings of $2 billion and $570 million in 2014, respectively, will create a leading utility in the US.
The agreement between Iberdrola USA and UIL Holdings, is subject to approval by UIL Holdings shareholders. As UIL Holdings and its subsidiaries operate in a regulated sector, the relevant authorizations at state level (Connecticut Public Utilities Regulatory Authority and Massachusetts Department of Public Utilities) and Federal (Federal Energy Regulatory Commission, Department of Justice and Federal Trade Commission, Committee on Foreign Investment in the United States and Federal Communications Commission) level will be required. This process is expected to be completed during 2015.
Ignacio Galán, chairman of IBERDROLA, said: “the operation that integrates Iberdrola USA and UIL is consistent with our strategy of growth in this country, a key market in which we are taking a major step forward. It also reflects our preference for effecting corporate operations on a friendly basis.”
— Source: Iberdrola USA
