[USA] Avangrid and PNM Resources announce merger

Avangrid Inc. announced on October 21, 2020 that it is planning to acquire Public Service of Company of New Mexico (PNM) Resources, New Mexico’s largest electric utility company, in a $4.3 billion transaction.[1] The transaction represents a combined $8.3 billion enterprise value. The merger would cement Avangrid as the third-largest renewable energy operator in the U.S. with renewable operations in 24 states. The combined entity would also own 10 regulated utilities in six states. Avangrid estimates that the combined company would have nearly 11,000 MW of generation capacity in its portfolio, including more than 7,600 MW of that coming from wind. Both companies plan on transitioning to lower-carbon energy. Avangrid has pledged to be carbon neutral by 2035. PNM has said it plans to provide 100% emissions-free power by the end of 2040 which would be 5 years ahead of New Mexico’s zero-carbon resources deadline.

The boards of each company have approved the merger, and Avangrid and PNM Resources hope to close their deal by the end of 2021, though the proposal must pass federal and state regulatory bodies. The proposal includes an all-cash offer for PNM Resources at $50.30/share which essentially cashes out existing investors in PNM Resources.

[1] https://www.businesswire.com/news/home/20201021005299/en

[USA] Sunrun strikes deal to acquire Vivint Solar for $1.46 billion

Sunrun, the largest residential solar company in the U.S., announced on July 6, 2020 that it has struck a deal to acquire residential energy competitor Vivint Solar, the second largest residential solar company in the U.S., for about $1.46 billion in an all-stock deal, a type acquisition where shareholders of the acquired company receive shares in the acquiring company as payment rather than cash.[1] Sunrun offers energy storage and grid services, working directly with utilities and grid operators. Vivint targets customers through direct-to-home sales which eases customer access to services and drives product purchases. Sunrun shareholders will hold about 64% of the combined company. The deal is expected to deliver about $90 million in annual cost savings between the companies. Based on Sunrun’s stock price on July 6, 2020, the combined entity will be valued at approximately $9.2 billion. In a statement regarding the acquisition, Sunrun said, "We expect to benefit from efficiencies in large scale project finance capital raising activities and are excited about the opportunity to build an even stronger and more recognizable consumer brand in residential energy services.”

[1] https://investors.sunrun.com/news-events/press-releases/detail/207/sunrun-announces-definitive-agreement-to-acquire-vivint

[USA] “Dominion Energy/SCANA Merger Receives FERC Approval”

(Dominion, 13 July 2018)

FERC has approved the proposed merger between Dominion Energy and SCANA Corporation and declared that the merger “is consistent with the public interest.” Though FERC’s approval is a big step in this merger process, Dominion and SCANA still have to receive the consent of SCANA’s shareholders, the South Carolina and North Carolina public service commissions, and an authorization from the Nuclear Regulatory Commission. However, should the merger go through, the new company (Dominion/SCANA) would deliver their energy services to around 6.5 million regulated customer accounts and would “have an electric generating portfolio of about 31,400 megawatts and 93,600 miles of electric transmission and distribution lines.” The new company would also have an expanded natural gas pipeline network – amounting to 106,400 miles- and would oversee one of the country’s largest natural gas storage systems at 1 trillion cubic feet of capacity.