New Haven utility parent UIL Holdings Corp. said it has agreed to be acquired by New England utility operator Iberdrola USA for approximately $3 billion.
The private Iberdrola and the public UIL would form a new publicly traded entity, which will be led by UIL CEO James Torgerson, who said in a statement Wednesday evening that the deal creates a company with greater scale and financial resources to invest in system reliability and infrastructure.
“This is a very compelling transaction for our shareholders,” Torgerson said.
Iberdrola’s offer of $52.75 per share — nearly 25 percent higher than UIL’s Feb. 25 closing price — has been approved by the boards of both companies.
Iberdrola, which has no Connecticut holdings, would own 81.5 percent of the new company.
The combined company would have 3.1 million customers across seven geographic markets served by Iberdrola’s utility subsidiaries in New York and Maine, and UIL’s holdings in southern Connecticut and western Massachusetts.
It will also have a portfolio of 6.5 gigawatts of renewable generation, including the second-largest wind portfolio in the country, the companies said.
UIL brings more than 725,000 customers to the deal. UIL shareholders would receive one new share every share they hold, plus $10.50 in cash.
Iberdrola USA is a part of the Spanish Iberdrola Group, which formed its subsidiary when it acquired Maine’s Energy East in 2008.
UIL 2014 profits fall on expenses, acquisition costs
Coinciding with its Iberdrola announcement, UIL also reported fourth-quarter net income of $32.3 million, or 56 cents per diluted share, down from $40.4 million, or 71 cents, in the fourth quarter of 2013.
For the full year, profits fell 5 percent on higher power and maintenance costs, as well as fees related to its failed acquisition attempt of Philadelphia Gas Works.
Net income for 2014 was $109.6 million, or $1.92 per diluted share, down from $115.3 million, or $2.18, in 2013.
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