Iberdrola S.A is all set to acquire Energy East Corp; a Maine based regulated utility company that has about three million electric and gas customers in New York, Maine, New Hampshire and Connecticut. The Spanish energy giant will buy Energy East Corp for 4.5 billion dollars or 3.4 billion euros, and thereby establish a strong foothold in the North American renewable energy market.

The friendly merger will give Energy East stockholders $28.50 per share. Iberdrola is still reviewing its financing options and will select the one that suits them the best to finance the deal by 2008 after the approval of the shareholders of Energy East Corp.

"The combination with Energy East fits with the philosophy of our Strategic Plan, will serve to enhance the international expansion we initiated several years ago in markets with stable growth, and consolidates our position as one of the world's leading electricity companies," Ignacio Galan, Chairman and Chief Executive Officer of Iberdrola, said in a statement.

He continued “the acquisition of Energy East will allow IBERDROLA to strengthen its commitment to shareholders, improving Group results, dividends and profitability. It will also enhance our commitment to customers, through improved quality of supply, and to society, contributing to sustainable development thanks to our world leadership in renewable energy and to increased investments devoted to reducing emissions.”

“This new step in the United States will allow IBERDROLA to continue working with national and State governments to make investments in infrastructure that advance clean energy policies; we welcome Energy East's employees and look forward to leveraging our experience to help address some of the most challenging energy and environmental issues in the Northeastern US” concluded Galan.

The deal is Iberdrola`s fifth US acquisition in the last one year. Based in Bilbao, Spain, the company bought Scottish Power for $23 billion in April last year. It was soon followed by Pennsylvania-based Community Energy in May, 2006. Midwest Renewable Energy Projects came next as well as Maryland-based CPV Wind Ventures LLC. Gradually Iberdrola has been emerging as a front runner in the energy sources market.

Iberdrola can generate up to 16,500 MW of energy from renewable sources. With the latest acquisitions, it plans to expand the capacity to approx. 20,000 MW. Following the close of the transaction, subject to approval of Federal and State authorities and Energy East shareholders by 2008, the latter’s utility subsidiaries will continue to operate under their current names (The Berkshire Gas Company, Central Maine Power Company, Connecticut Natural Gas Corporation, New York State Electric & Gas Corporation, Rochester Gas and Electric Corporation, and The Southern Connecticut Gas Company).