Qatar Holding to buy stake in Spanish utility
Doha, March 14, 2011
Qatar Holding has announced plans to acquire a 6.16 per cent stake in Iberdrola, the largest power company in Spain and a leading renewable energy operator in the world, for 2.02 billlion euros ($2.81 billion).
Qatar government's investment vehicle signed a MoU with Iberdrola setting forth the framework for collaboration in developing their respective business activities through establishment of a long-term, mutually beneficial, strategic partnership.
The two parties will co-operate for the purpose of developing new business opportunities in different areas of the global electricity value chain with a focus on high-growth and emerging markets.
As per the deal Iberdrola is set to establish its regional headquarters as well as research and development operations in Qatar.
Additionally, Qatar Holding has also subscribed to a 6.17 per cent capital hike approved by the board of directors of Iberdrola for a total investment of €1.90 billion. The issue price is €5.63 per Iberdrola share.
Qatar Holding said it has also agreed to acquire treasury shares representing 0.37 per cent of the share capital of Iberdrola pre-increase, at the same price per share for a total purchase amount of €115 million.
Consequently, Qatar Holding through its subsidiary will hold 6.16 per cent of the share capital of Iberdrola outstanding after the capital increase, it stated.
Iberdrola said the fresh cash inflow will help the firm to strengthen its financial position and pursue corporate deals such as proposed merger with Iberdrola Renovables, the acquisition of Elektro Electricidade e Servicios in Brazil, and other growth opportunities.
Commenting on the transaction, Ahmad Mohamed Al-Sayed, managing director and CEO of Qatar Holding, said: 'In addition to a strong, stable European franchise, our investment in Iberdrola provides significant exposure to other important global markets including Brazil, Mexico and the US.'
'As such, this investment represents a further step in our strategy of building a diversified portfolio of leading global enterprises,' he noted.
Ignacio S. Galán, chairman and CEO of Iberdrola, said, 'Through this investment, Qatar Holding recognizes the success of Iberdrola’s strategy. The strategic MoU represents the first step of a long-term relationship that will support each other’s future development.”-TradeArabia News Service