By Pietro Lombardi
MADRID (Reuters) -Spanish water and renewable energy company Cox has agreed to buy Iberdrola’s assets in Mexico in a deal valuing the business at $4.2 billion including debt, the companies said on Thursday.
The deal is part of Cox’s strategy to pursue growth through acquisitions, while it strengthens Iberdrola’s financial muscle as it prepares to invest 55 billion euros ($63 billion) in power grids in the next six years, primarily in Britain and the United States.
Iberdrola controls 15 power plants with 2.6 gigawatts (GW) of capacity in Mexico, including six wind parks and three solar parks, as well as gas and cogeneration plants.
It also includes a pipeline of 11.8 GW of renewable projects.
The agreement implies a multiple of $1.6 million per megawatt of operating capacity, Iberdrola said.
Cox shareholders still need to approve the acquisition, and reference shareholders representing 84% of its capital have already granted their support.
In 2023, Iberdrola agreed to sell $6 billion worth of assets in Mexico – mostly gas-fired power plants.
On Wednesday, Cox CEO Nacho Moreno told Reuters that the company was considering buying Iberdrola’s Mexican business, calling it “absolutely amazing” and saying that Cox regarded Mexico as “one of our strategic regions”.
Cox, which has a market capitalisation of around 830 million euros, defined the deal as a “landmark” acquisition, 75% of which will be funded with debt and the rest with equity.
It forecasts the acquisition will more than double expected revenue for the year to around 2.7 billion euros and more than triple earnings before interest, taxes, depreciation and amortisation (EBITDA) to 720 million euros.
Closing is expected by the end of the year or in the first quarter of 2026.
($1 = 0.8754 euros)
(Reporting by Pietro Lombardi; Editing by Andrei Khalip, Kirsten Donovan)
