Europe''s Iberdrola to acquire US-based Energy East

27 June 2007

Iberdrola SA, Europe''s third largest energy company, has agreed to buy US-based power utility Energy East Corp for €6.4 billion including debt. With this acquisition, Iberdrola will be able to extend its operations in the world''s biggest energy market.

The Spanish firm will offer Energy East shareholders $28.50 per share in cash, representing a premium of 20.2 per cent of the past 30 days average price, which values Energy East at €3.4 billion; Iberdrola will also assume €3 billion in debt.

Iberdrola said the deal would increase its own enterprise value to about €83 billion. The merger requires the approval of East Energy shareholders and regulators and the transaction is expected to be completed in 2008.

Ignacio Galán, chairman, Iberdrola, said, "The transaction will serve to enhance the international expansion we initiated several years ago, essentially in deregulated markets with stable growth."

New York Stock Exchange-listed Energy East has long been viewed as a takeover candidate due to its mid sized capitalisation and attractive regional portfolio of businesses. It owns utilities in the Northeast, including New York State Electric & Gas Corp., Rochester Gas & Electric Corp. and Central Maine Power Co.

The group serves 2.9 million customers and can produce as much as 555 megawatts of energy through hydroelectric and gas plants and a coal-based power generator.