Exclusive: Iberdrola hires JPMorgan for asset sales to fund U.S. buy

Mon Oct 6, 2014 8:08am EDT
 
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By Andrés González and Arno Schuetze

MADRID/FRANKFURT (Reuters) - Spanish power firm Iberdrola (IBE.MC: Quote) has hired JPMorgan Chase & Co (JPM.N: Quote) to sell some foreign renewable assets which could raise up to 2 billion euros to help fund an acquisition in the fast-growing U.S. market, three sources with knowledge of the matter said.

Iberdrola, a world leader in wind turbines, joins other European companies, including Germany's Siemens (SIEGn.DE: Quote) which has agreed to buy U.S. turbine maker Dresser-Rand DRC.N, hoping to grow through purchases outside sluggish home markets.

Iberdrola's earnings suffered in Europe's economic crisis and from energy reforms in Spain, where new power generation taxes and renewable cuts dented profits.

It has already mandated Morgan Stanley to explore the sale of a minority stake in its Spanish distribution business as part of its boldest move to boost earnings since 2011, a strategy aimed at cutting exposure to Spain and investing abroad.

"Iberdrola is looking for a purchase in the United States. They're not going to sell anything unless they have an adequate acquisition target," said one financial source who asked to remain anonymous.

Iberdrola, which has been mentioned as a possible suitor of both Louisiana's electricity supplier Cleco Corp's CNL.N and Oncor, the power distribution unit of Texas's biggest power company, declined to comment.

The JPMorgan mandate is for a sale of minority stakes in several renewable energy assets such as mature wind farms or solar plants that could be worth about 2 billion euros, two sources with knowledge of the matter said. JPMorgan declined to comment.

Iberdrola has assets capable of producing 14,400 megawatts (MW)of renewable energy across the world, with 5,700 MW in Spain and 5,457 MW in the United States.   Continued...

 
A sign outside the headquarters of JP Morgan Chase & Co in New York, September 19, 2013. REUTERS/Mike Segar