Spain’s Iberdrola is to buy Scottish Power for an agreed 11.6 billion pounds or $22.5 billion in cash and shares to create Europe’s third-largest utility and a world leader in renewable energy, Reuters reports.
Iberdrola, Spain’s largest utility, said on Tuesday it would pay 400 pence in cash and 0.1646 new shares for each Scottish Power share, worth a total of 777p a share at Monday’s close. The price includes Scottish Power’s 12p special dividend.
The price is slightly below that expected by some analysts, and at 1015 GMT Scottish Power shares were down 0.3% at 774p. Iberdrola shares were down 2.3% at EUR32.00 while DJ Stoxx European utilities index was little changed.
Europe’s utilities are consolidating as governments ease takeover rules and firms are bolstered by high energy prices and cost cuts. Scottish Power, Britain’s fifth largest energy supplier has long been viewed as a bid target for larger rivals. Last year it rejected a 570 pence a share offer from E.ON.
After buying Scottish Power, Iderdrola would trail only France’s EDF and E.ON among Europe’s utilities.
‘The new group will be well positioned for the future European energy market and will enjoy a strong growth platform in Spain, the United Kingdom, Continental Europe, North America and the global market, particularly in renewable energy, a sector in which it will be a world leader,” Iberdrola Chairman and Chief Executive Ignacio Galen said in a statement.