Iberdrola (IBE.MC) is marking its initial foray into Finland with a 2 billion-euro deal with the Ontario Teachers' Pension Plan and KKR for the acquisition of an 80% stake in Caruna, the country's largest electricity distribution operator.
The purchase agreement values Caruna at 5 billion euros, factoring in financial debt, according to a Tuesday release. The company serves 1.5 million people with an electricity distribution network spanning 89,000 kilometers, operating through two concessions that cover the area surrounding central Helsinki and the Joensuu region, as well as other areas of western and northeastern Finland.
Completion is expected in the first quarter of 2027, subject to the approval of relevant regulators. Swedish occupational pensions company AMF and Finnish pension insurance company Elo will retain their current 20% stake in Caruna.
Iberdrola said the acquisition, along with its recent sale of thermal power plants in Mexico, is in line with its strategy of channeling resources to networks businesses in stable markets with "attractive" regulatory regimes.
"Finland offers high credit quality and a predictable and attractive regulatory framework, while Caruna has strong growth prospects due to the need for networks linked to new renewable generation, rising demand from the industrial and residential sectors and the electrification of the economy," said Iberdrola Executive Chairman Ignacio Galán.
Separately, Iberdrola published on Wednesday financial results for the first half, featuring year-over-year growth in both reported net profit and revenue. "Iberdrola's results stood slightly above consensus at EBITDA and net income. Still the company decided to maintain guidance, but it added the word comfortably to the wording," commented RBC Capital Markets.
Iberdrola shares dipped marginally in early morning trading.
