Iberdrola, the Spanish multinational company, has won the competition to acquire the British network operator Electricity North West (ENW) for approximately 5 billion euros, including debt. On Friday, the Madrid-based company announced that it will acquire an 88 percent stake in ENW from the three shareholders Equitix, KDM Power, and the Chinese sovereign wealth fund CNIC for an equity value of 2.1 billion pounds.

Through this deal, the UK becomes Iberdrola's largest market by regulated assets. Iberdrola, which already owns Scottish Power, triumphed over French utility Engie. ENW supplies electricity to almost 5 million people in the Northwest of England, including Manchester. Scottish Power, which Iberdrola acquired in 2007 for 11 billion pounds, serves customers in Merseyside, North Wales, as well as Central and Southern Scotland.

The deal is in line with Iberdrola's long-term plans to expand its network management business while continuing to be a major producer of wind and solar energy. Iberdrola Chairman Ignacio Galán said, "This transaction strengthens our commitment to significantly invest in power grids, which are a crucial component in supporting the electrification and decarbonization of the economy.

He added that this "also aligns with our strategy of investing in countries that have ambitious investment plans and stable and predictable regulations.

Upon completion of the ENW deal, the value of Iberdrola's regulated asset base in the United Kingdom will rise to approximately 14 billion euros, surpassing the 13.3 billion euros in the United States. Together, the two countries will account for two-thirds of the company's regulated assets, highlighting the extent of its expansion beyond its Spanish home market.

KDM Power, a consortium led by Japan's Kansai Electric Power, will retain a 12 percent stake in ENW upon completion of the deal.

Iberdrola is one of the world's largest developers and grid operators of wind and solar energy, with approximately 43.4 GW of ongoing renewable projects worldwide. In March, the company presented plans to invest about 60 percent of its global investments over the next three years in power grids to meet the growing demand for grids alongside the growth of wind and solar energy.

The deal marks another consolidation in the British network sector, following the FTSE 100 company National Grid's payment of £7.8 billion in 2021 to purchase Western Power Distribution from the US company PPL.

These and other network operators, such as Northern Powergrid by Berkshire Hathaway and UK Power Networks by CK Group, must significantly invest in the coming years to ensure that the grids can keep up with the increase in electric cars, heat pumps, and renewable electricity as the country transitions to a lower-carbon energy system.

BNP and Barclays advised Iberdrola, while Jefferies advised the sellers.