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Iberdrola Expands European Grid Business With Caruna Acquisition

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Iberdrola will acquire an 80% stake in Finland's largest electricity distribution company, Caruna, in a deal valuing the business at about 5 billion euros ($5.7 billion), the company said Tuesday.

Iberdrola will pay 2 billion euros for the 80% interest, while Finnish pension funds AMF and Elo will retain their combined 20% stake, the company said.

Caruna supplies electricity to 1.5 million people, or more than 20% of Finland's population, through an 89,000-kilometer network with 67% of its lines installed underground.

The utility operates two distribution concessions covering areas around central Helsinki and Joensuu, alongside western and northeastern Finland, where industrial activity, residential growth and new data centers continue to lift electricity demand, the company said.

Caruna expects to increase earnings and its asset base by about 7% annually while investing 200 million euros to 300 million euros each year to modernize and expand its grid. The companies expect to close the transaction in Q1 2027, subject to regulatory approvals, Iberdrola said.

Finland's AA+ credit rating and regulatory framework through 2031 provide an expected return on equity of about 8%, it said.

"This transaction reinforces our strategic commitment to electricity networks as essential infrastructure for promoting energy security, self-sufficiency and competitiveness," said Ignacio Galan, Iberdrola's executive chairman.

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