PNM Resources to be acquired by Avangrid for $50.30 per share
PNM Resources (PNM) announced with Avangrid (AGR) that they have entered into a definitive agreement under which Avangrid will acquire all the outstanding shares of PNM Resources.
The agreement, which has been unanimously approved by both companies’ boards, creates a U.S. regulated utility and renewable energy platform.
Under the terms of the agreement, PNM Resources shareholders will receive $50.30 in cash for each share of PNM Resources common stock held at closing, representing an equity value of approximately $4.3B.
The proposed transaction implies a 19.3% premium to PNM Resources 30-day volume weighted average price, or VWAP, as of October 20.
The combination creates a larger, more diversified regulated utility and renewable energy company with electric and gas utilities.
Regulated utility operations expand under the transaction and provide increased operational and regulatory diversification, serving more than 4M electric and natural gas customers of 10 regulated utilities across New York, Connecticut, Maine, Massachusetts, New Mexico, and Texas.
These combined operations are supported by $14B of rate base, including more than 104,000 miles of electric transmission and distribution lines.
PNM Resources operations will continue to be overseen locally and the current headquarters of the utilities in New Mexico and Texas will remain.
Pat Vincent-Collawn will step down as chairman, president and CEO upon closing of the transaction. Don Tarry, current CFO of PNM Resources, will oversee the continuing operations of PNM and TNMP.
Two directors from the current PNM Resources board will serve as independent directors of Avangrid. One director from the current PNM Resources board will also serve on the board of the Avangrid Networks business.
PNM remains committed to exiting coal through the approved abandonment of San Juan Generating Station in 2022 and the continued efforts to exit its 200-megawatt ownership interest in the Four Corners Power Plant earlier than originally planned.
PNM sees the potential for additional customer savings by exiting the plant sooner than the expiration of the ownership and coal supply agreements in 2031.
An earlier exit from Four Corners also opens the door for the combined company to bring additional renewable resources onto the grid in support of New Mexico’s increasing renewable energy standards and 2045 carbon-free mandate.
The transaction is subject to PNM Resources shareholder approval, regulatory approvals from the New Mexico Public Regulation Commission, Public Utility Commission of Texas, Federal Energy Regulatory Commission, Department of Justice, Nuclear Regulatory Commission, Federal Communications Commission and Committee on Foreign Investment in the United States, and other customary closing conditions.
The transaction is expected to close between October and December 2021.
PNM closed at $45.74. AGR closed at $54.06.
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