Spanish energy giant Iberdrola has agreed to sell its businesses in Mexico for USD 4.2 billion, marking a significant strategic shift as the company focuses resources on electricity transmission and distribution networks in other key markets.

Transaction Details

The deal includes 15 power plants with a total capacity of 2.6 GW, commercial activities, and a portfolio of development projects that the buyer intends to put into operation in the future. The agreement implies a valuation multiple of USD 1.6 million per MW of operating capacity. The 2.6 GW of installed capacity in operation consists of 1,368 MW of combined cycle and cogeneration plants and 1,232 MW of wind and photovoltaic assets.

Beyond the base USD 4.2 billion purchase price, the buyer would make additional payments to Iberdrola as development projects are completed in line with expansion plans and frameworks created by the Government of Mexico to promote new generation.

Strategic Investment Focus

The transaction aligns with Iberdrola's expectations to invest EUR 55 billion in electricity transmission and distribution network subsidiaries, with primary focus on the United States and the United Kingdom. This organic investment strategy targets transmission and distribution electricity networks across subsidiaries in the US (Avangrid Networks), the UK (ScottishPower Energy Networks), Brazil (Neoenergia), and Spain (i-DE).

The investment plan will almost double Iberdrola's regulated asset base to EUR 90 billion in the coming years. This strategy has already been demonstrated through Iberdrola's British subsidiary ScottishPower's acquisition of Electricity North West distribution company, which serves northwest England, for EUR 5 billion just one year ago.

Financial Resources and Regulatory Approval

Combined with a recently executed capital increase, operating cash flow, and current liquidity, the Mexico transaction secures the resources necessary to meet the Group's investment plans in the coming years. The deal assumes the same valuation multiple of USD 1.6 million per operating MW across all assets included in the sale.

The transaction remains subject to obtaining necessary regulatory approvals before completion. The agreement was announced on July 31, 2025.

Asset Portfolio Composition

The Mexican operations being sold represent a diverse energy portfolio spanning conventional and renewable generation technologies. The combined cycle and cogeneration facilities account for the majority of the capacity at 1,368 MW, while renewable assets including wind and photovoltaic installations contribute 1,232 MW to the total portfolio.

The commercial activity component of the sale encompasses the business operations associated with these generation assets. The portfolio of projects under development represents future growth potential that the buyer intends to realize as part of their expansion strategy in Mexico, supported by government frameworks promoting new generation capacity.

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