AVANGRID Reaches Settlement With Key Stakeholders in Texas for PNM Resources Merger

Rhea-AI Summary

AVANGRID (NYSE: AGR) has achieved a unanimous settlement with the Public Utility Commission of Texas regarding its proposed merger with PNM Resources (NYSE: PNM). The PUCT will review the agreement, which all parties claim is in the public interest. This follows recent approvals from shareholders, the FCC, and CFIUS. The merger, valued at $8.3 billion at $50.30 per share, aims to create a leading clean energy entity with operations across multiple states.

Positive

• Unanimous settlement with PUCT supports merger approval process.
• Recent approvals from shareholder, FCC, and CFIUS enhance merger progress.
• Merger valued at $8.3 billion signifies strong financial commitment.

Negative

• Pending approvals from additional regulatory bodies including FERC and NRC.
• Potential risks involved in merger completion timeline and conditions.

AVANGRID, Inc. (NYSE: AGR), a leading sustainable energy company, announced today that, together with TNMP (Texas-New Mexico Power Company), it has reached a unanimous settlement with the Staff of the Public Utility Commission of Texas (PUCT) and the intervenors. The signed agreement has been filed with the PUCT by AVANGRID, TNMP, Staff and the intervenors in the proceeding for the approval of the proposed merger with PNM Resources (NYSE: PNM). TNMP is the PNM Resources Texas utility subsidiary.

The PUCT is expected to consider the unanimous settlement in the near future. In the settlement, all parties agree the proposed merger, including the regulatory commitments made by the applicants, is in the public interest.

“We are pleased with the Texas settlement milestone and the continued progress of the required regulatory approvals for this important transaction,” said Dennis V. Arriola, CEO of AVANGRID. “We are hopeful the unanimous settlement will result in approval of the combination between PNM Resources and AVANGRID.”

“Combining AVANGRID and TNMP’s parent company, PNM Resources, strengthens our commitment to a clean energy future,” Arriola continued. “The merger will deliver tangible benefits for Texas customers, while maintaining the crucial role of TNMP’s senior management and employees in managing the utility.”

Today’s announcement follows the recent Federal Communications Commission (FCC) approval, the approval of the merger by PNM Resources’ shareholders, the receipt of regulatory clearance from the Committee on Foreign Investment in the United States (CFIUS) and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

In addition to the settlement, AVANGRID continues to pursue state and Federal regulatory approvals for the merger, including from the Nuclear Regulatory Commission and the Federal Energy Regulatory Commission (FERC), as well as the New Mexico Public Regulation Commission.

AVANGRID announced the strategic PNM Resources merger combination in October 2020 in an all cash offer for PNM Resources’ shares at $50.30 per share, an $8.3 billion enterprise value transaction. The resulting entity would be one of the major clean energy companies in the US with ten regulated utilities in six states and the third largest renewables company with operations in 24 states.

About AVANGRID: AVANGRID, Inc. (NYSE: AGR) aspires to be the leading sustainable energy company in the United States. Headquartered in Orange, CT with approximately $38 billion in assets and operations in 24 U.S. states, AVANGRID has two primary lines of business: Avangrid Networks and Avangrid Renewables. Avangrid Networks owns and operates eight electric and natural gas utilities, serving more than 3.3 million customers in New York and New England. Avangrid Renewables owns and operates a portfolio of renewable energy generation facilities across the United States. AVANGRID employs approximately 7,000 people and has been recognized by Forbes and Just Capital as one of the 2021 JUST 100 companies – a list of America’s best corporate citizens – and was ranked number one within the utility sector for its commitment to the environment and the communities it serves. The company supports the U.N.’s Sustainable Development Goals and was named among the World’s Most Ethical Companies in 2021 for the third consecutive year by the Ethisphere Institute. For more information, visit www.avangrid.com.

Forward-Looking Statements

Certain statements made in this press release for AVANGRID that relate to future events or expectations, developments, projections, estimates, intentions, goals, targets, and strategies are made pursuant to the Private Securities Litigation Reform Act of 1995. All statements contained in this Press Release that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as “may,” “will,” “would,” “can,” “expect(s),” “intend(s),” “anticipate(s),” “estimate(s),” “believe(s),” “future,” “could,” “should,” “plan(s),” “aim(s),” “assume(s)”, “project(s)”, “target(s)”), “forecast(s)”, “seek(s)” and or the negative of such terms or other variations on such terms, comparable terminology or similar expressions. These forward-looking statements generally include statements regarding the potential transaction between AVANGRID and PNM Resources, including any statements regarding the expected timetable for completing the potential merger, the ability to complete the potential merger, the expected benefits of the potential merger, projected financial information, future opportunities, and any other statements regarding AVANGRID’s and PNM Resources’ future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows, or future events or performance. Readers are cautioned that all forward-looking statements are based upon current reasonable beliefs, expectations and assumptions. AVANGRID assumes any obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, AVANGRID cautions readers not to place undue reliance on these statements.

AVANGRID’s business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond its control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. For a discussion of risk factors and other important factors affecting forward-looking statements, please see AVANGRID’s Form 10-K and Form 10-Q filings and the information filed on Avangrid’s Forms 8-K with the Securities and Exchange Commission (the “SEC”) as well as its subsequent SEC filings, and the risks and uncertainties related to the proposed merger with PNM Resources, including, but not limited to: the expected timing and likelihood of completion of the pending merger, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the pending merger that could reduce anticipated benefits or cause the parties to abandon the transaction, the failure by AVANGRID to obtain the necessary financing arrangement set forth in commitment letter received in connection with the Merger, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, the risk that the parties may not be able to satisfy the conditions to the proposed Merger in a timely manner or at all, risks related to disruption of management time from ongoing business operations due to the proposed Merger, and the risk that the proposed transaction and its announcement could have an adverse effect on the ability of PNM Resources to retain and hire key personnel and maintain relationships with its customers and suppliers, and on its operating results and businesses generally. Other unpredictable or unknown factors not discussed in this communication could also have material adverse effects on forward looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

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FAQ

What is the status of AVANGRID's merger with PNM Resources?

AVANGRID has reached a unanimous settlement with the Public Utility Commission of Texas, which will review the merger proposal.

What is the value of the merger between AVANGRID and PNM Resources?

The merger is valued at $8.3 billion, with an offer of $50.30 per share for PNM Resources' shares.

Which regulatory approvals are still needed for the AVANGRID merger?

AVANGRID is pursuing approvals from the Nuclear Regulatory Commission, Federal Energy Regulatory Commission, and other state regulatory bodies.

What benefits does the AVANGRID and PNM Resources merger offer?

The merger aims to strengthen clean energy efforts and deliver tangible benefits for Texas customers while enhancing operational capabilities.