Avangrid and PPL talk potential $67B merger: Report

Dive Brief:

Avangrid and PPL Corporation are discussing a potential merger of their utility businesses, the Financial Times reported on Friday.
Avangrid, the majority of which is owned by Spanish utility and wind power producer Iberdrola, serves about 3.1 million New York and New England customers and is the third-largest wind power provider in the country. PPL serves about 1.4 million Pennsylvania customers.
The merger would create one of the largest utilities in the U.S., with a deal valued at more than $67 billion if completed, according to unnamed sources close to the discussion.

Dive Insight:

Poised to become the largest utility business deal in the U.S. this year, talks have floated several potential structures for the transaction, sources told the Financial Times. But overall there has been a slight downturn in electric utility consolidation, with smaller deals in play this year.

South Carolina has received competing bids for its state-owned utility Santee Cooper from Duke Energy, NextEra Energy and other interested parties.

That sale could help pay off debt related to the failed effort to expand the VC Summer nuclear plant. Santee Cooper and South Carolina Electric & Gas, whose parent company was acquired by Dominion Energy last year, spent $9 billion on the project.

At the start of 2019, two utility acquisitions wrapped up: Dominion's aforementioned acquisition of Scana for $14.6 billion, and NextEra Energy's acquisition of Florida-based Gulf Power from Southern Company, valued at $6.475 billion.

Vistra Energy announced the purchase of its Texas-competitor, Ambit Energy, for $475 million plus working capital in an all-cash transaction in August. The consolidation has led Texas consumer advocacy groups to raise concerns of high prices as Vistra and NRG Energy will serve nearly two-thirds of the state's customers.

Iberdrola would be the largest outstanding shareholder of a potential Avangrid-PPL merger, owning 81.5% of Avangrid. Both PPL and Avangrid have a presence in the United Kingdom, which could create further regulatory hurdles for the deal, according to Financial Times.

Avangrid did not immediately respond to a request for comment. "PPL does not respond to market rumors or speculation," a spokesperson told Utility Dive.