Iberdrola (IBE) M&A announcement summary

Deal rationale and strategic fit

• Acquisition of Finland's largest electricity distributor, Caruna, aligns with disciplined capital allocation by redeploying proceeds from a non-core Mexican asset into a high-quality, euro-denominated, fully regulated network in an AA+ rated country.

• Caruna offers perpetual concessions, a stable regulatory framework until 2031, and is positioned at the center of Finland’s electrification and industrial growth.

• The deal increases exposure to predictable, long-duration regulated earnings and strengthens leadership in electricity networks.

• Finland’s electricity demand is set to rise significantly, driven by industrial electrification, data centers, and renewables, with projected demand growth of 22%-45% by 2030.

• The acquisition supports long-term presence and partnership with leading Nordic institutional investors.

Financial terms and conditions

• 80% stake acquired for approximately €2 billion equity consideration; €1 billion deferred for 20–30 months post-close.

• Enterprise value of Caruna is about €5 billion, including €2.47 billion net debt as of December 2025.

• Implied adjusted multiple is ~15–16x expected 2027 earnings; transaction is EPS accretive from year one by ~1%.

• Deferred payment is not contingent on performance; no earn-out or similar conditions.

• Shareholder loan is included in the equity consideration.

Caruna operational and financial highlights

• Caruna’s 2027 estimated RAB is €2,536 million, with 740,000 supply points and 89,300 km of lines (67% undergrounded).

• 2027E EBITDA is projected at €369 million and net income at €148 million.

• The company employs 247 people and holds a perpetual concession.

• Stable cash flows are underpinned by a fully regulated asset base.

• Upside potential exists from renewables expansion, electrification, and data center growth.