Monster merger a done deal

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An unrivalled wind giant is born. Spanish utility Iberdrola has finalised the takeover of Britain's ScottishPower after five months clearing the friendly deal with US and European regulators. The combined might of the world's first utility merger to be propelled mainly by wind power (Windpower Monthly, January 2007) brings nearly 40 GW of installed generation capacity under Iberdrola control, compared to 30.5 GW previously. Of that, a little over 6.2 GW is from wind power, with ScottishPower's mainly US holdings contributing a little more than 2000 MW to the combined wind total.

Iberdrola says synergies will strengthen combined portfolio of prospective wind projects weighing in at 13,000 MW, mainly in the US, Spain, the rest of Europe and China. The merger, "Gives birth to one of the world's largest electricity sector companies and a leader in renewables, with a corporate value of over EUR 65 billion," says Iberdrola president Ignacio Galán.

The final hurdle to the deal, which the boards of both companies approved in November, was cleared on April 23 when the Edinburgh Court of Session approved the EUR 17.1 billion purchase.

Large and growing American assets by both companies presented the most complex tangle for US regulators, which gave their final approval at the end of March. Through its US subsidiary, PPM Energy, ScottishPower owns nearly 1800 MW of operational wind assets. Last year, Iberdrola acquired two US developers with combined rights to 3800 MW of prospective wind projects. Those assets do not include Iberdrola's announcement of its intention to acquire a third US developer, CPV Wind Ventures, together with its 3500 MW development portfolio (page 31).

To finalise its takeover of ScottishPower, Iberdrola has bought 52.3% of the company's shares, at £4 each plus a £0.12/share dividend. The remaining 47.7% was acquired in exchange for shares in Iberdrola. Immediately after the deal was done, Iberdrola approved a EUR 8031 million capital increase.

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