IBERDROLA Completes Friendly Acquisition of Energy East
September 17 2008 - 7:22AM
PR Newswire (US)
- The Company, which last year arranged financing for the
transaction through a euro 3,400 billion capital increase, thus
consolidates its ranking as 4th largest electricity company
worldwide by market capitalisation PORTLAND, Maine, Sept. 17
/PRNewswire-FirstCall/ -- IBERDROLA, S.A. today closed the friendly
acquisition of U.S. company Energy East Corporation, a transaction
finally valued at euro 3,222 billion* in cash plus another euro
2,869 billion* in debt, a total of euro 6,091 billion* which
compares to the euro 6,400 billion initially estimated. The Company
had already arranged financing for the acquisition through a euro
3,400 billion capital increase, raised via an Accelerated
Bookbuilding Offer (ABO) in June last year. As foreseen when the
acquisition was announced on 25 June 2007, the transaction is being
effected through a merger by absorption of Green Acquisition
Capital Inc. into Energy East Corporation, valuing each Energy East
share at $28.50. This represents a premium of 20.2% over the
average share price for the 30 days prior to the offer
announcement. The smaller debt amount to be assumed enhances the
Company's strong financial position, in line with the goal of
consolidating its 'A' category rating and keeping gearing below
50%. IBERDROLA, whose equity funds total euro 30 billion, expects
to close 2008 with liquidity of more than euro 4 billion and lines
of credit for another euro 10 billion. With this transaction, the
second major international operation undertaken by IBERDROLA in the
current strategic plan period, after the euro 17.2 billion
acquisition of ScottishPower in April 2007, the Company fulfills
one of the main objectives of the current Strategic Plan which
identifies the U.S. as a key market for the Group's future
expansion. * Based on an Exchange rate of 1 US $ = 0.7066 euro
(15-9-2008) With the integration of ScottishPower and Energy East,
IBERDROLA expects to exceed euro 3 billion in net profit in 2008,
compared to euro 2,354 million in 2007. With the acquisition of
Energy East, the largest industrial transaction ever carried out by
a Spanish company in the United States, IBERDROLA increases its
assets in the United States to around $20 billion. It expects the
U.S. to contribute 10% to total Group EBITDA within three years,
according to objectives set by the 2008-10 Strategic Plan. With
Energy East, IBERDROLA enhances its presence in the U.S. market,
where it is already the second largest in wind power through its
renewable energy subsidiary with nearly 2,000 MW in operating
capacity. Plans are to reach 6,900 MW in operating capacity by
2012. IBERDROLA today achieves one of the principal goals of the
2008-10 Strategic Plan, which calls for 10% of Group EBITDA to come
from the United States at the end of this period, with around euro
13 billion in investments. Energy East principally distributes and
markets electricity and natural gas to five states in the northeast
of the United States: New York, Maine, New Hampshire, Massachusetts
and Connecticut. The Company has 1.83 million electricity customers
and 919,000 gas customers. Sales last year were 39,000 GWh for
electricity and 5.7 bcm (billion cubic metres) for gas. As a result
of the acquisition, IBERDROLA increases its volume of electricity
distributed by 24.7% to 198.4 TWh and its customers by 8.1% to 24
million, while raising the number of gas customers by 42.9% to 3
million. Overall installed capacity rises 0.2% to 42,650 MW. Energy
East will also contribute to continue diversifying the origin of
IBERDROLA Group results, both geographically and operationally, as
well as representing a stable and predictable source of revenues as
a company whose business is in large part regulated. IBERDROLA has
a presence in more than 40 countries, with a special interest in
more developed and de-regulated markets, such as Spain, the United
Kingdom and the United States, where demand for electricity
continues to grow and prices are increasingly more in line with
costs. The acquisition has received broad support in recent months
in the U.S. from consumer groups, unions and political leaders from
both the Democrat and Republican parties, as well as obtaining a
vote in favour from 93% of Energy East shareholders last November.
IBERDROLA and Energy East also obtained all the administrative
authorisations required for the acquisition, both at the state
level -- the state public service commissions of Maine, New
Hampshire, Connecticut and New York -- as well at the federal level
(the Federal Energy Regulatory Commission, the Federal
Communications Commission, the Committee on Foreign Investment in
the United States, the Department of Justice and the Federal Trade
Commission). The transaction that closes today, announced in June
last year by the Boards of IBERDROLA and Energy East, has taken
just 15 months, comparing favorably to other similar recent
transactions in the United States: Great Plains Energy/Aquila /17
months), National Grid/KeySpan (18 months), Babcock &
Brown/Northwestern Corp (cancelled), Exelon/PSEG (cancelled) and
FPL/Constellation (cancelled). IMPORTANT INFORMATION This
information does not constitute an offer to buy, sell or exchange,
nor does it constitute the solicitation of an offer to buy, sell or
exchange securities. Iberdrola, S.A. shares may not be offered for
sale or sold in the United States except through a statement of
effective notification in conformity with the provisions of the
Securities Act or when a valid exemption from the obligation to
provide such notification has been granted. FORWARD-LOOKING
STATEMENTS This communication contains forward-looking information
and statements about Iberdrola, S.A. and Energy East Corporation
and otherwise, including financial projections and estimates and
their underlying assumptions, statements regarding plans,
objectives and expectations with respect to future operations,
capital expenditures, synergies, products and services, and
statements regarding future performance. Forward-looking statements
are statements that are not historical facts and are generally
identified by the words "expects," "anticipates," "believes,"
"intends," "estimates" and similar expressions. Although Iberdrola,
S.A. believes that the expectations reflected in such
forward-looking statements are reasonable, investors and holders of
Iberdrola, S.A. shares are cautioned that forward-looking
information and statements are subject to various risks and
uncertainties, many of which are difficult to predict and generally
beyond the control of Iberdrola, S.A., that could cause actual
results and developments to differ materially from those expressed
in, or implied or projected by, the forward-looking information and
statements. Forward-looking statements are not guarantees of future
performance. They have not been reviewed by the auditors of
Iberdrola, S.A. or Energy east Corporation. You are cautioned not
to place undue reliance on the forward-looking statements, which
speak only as of the date they were made. All subsequent oral or
written forward-looking statements attributable to Iberdrola, S.A.
or any of its members, directors, officers, employees or any
persons acting on its behalf are expressly qualified in their
entirety by the cautionary statement above. All forward-looking
statements included herein are based on information available to
Iberdrola, S.A. on the date hereof. Except as required by
applicable law, Iberdrola, S.A. does not undertake any obligation
to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
DATASOURCE: Energy East Corporation; IBERDROLA, S.A. CONTACT: Keith
Grant of Iberdrola, +0034639760397; or Clayton Ellis of Energy
East, +1-607-762-7336 Web Site: http://www.energyeast.com/
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