Iberdrola Sells 100% of UK Smart Meter Business to Macquarie for €1.06 Billion
Iberdrola, the global energy leader, has entered into a significant agreement with Macquarie, an international financial services group headquartered in Australia, to sell 100% of SP Smart Meter Assets Limited (SPSMAL). This deal marks a substantial shift for Iberdrola in its ongoing asset rotation strategy, designed to streamline its portfolio and focus on its core business areas.
Transaction Overview
The transaction, valued at approximately £900 million (equivalent to €1.06 billion at current exchange rates), is poised to be a pivotal move for Iberdrola, aligning with its broader strategy of focusing on growth through strategic alliances and divestments. The sale is subject to approval by the UK competition authority, with completion expected by the third quarter of 2025. SPSMAL, a UK-based company, currently manages around 2.7 million meters, primarily focusing on smart metering technology.
Macquarie, known for being one of the UK’s largest independent electricity meter operators, is a well-established player in the sector. Founded in 2003, Macquarie’s meter business currently manages more than 10 million meters across Great Britain, of which 7.5 million are smart meters and the remaining 2.5 million are traditional meters. Over the years, Macquarie has provided over £1.5 billion in funding to facilitate the UK’s ambitious smart meter rollout, an essential step in the country’s transition to a more sustainable energy system.
By the end of 2024, the UK aims to have 38 million smart meters installed in homes and small businesses across the country. This is part of the government’s Smart Meter Rollout Programme, managed by the energy regulator Ofgem. The sale of SPSMAL to Macquarie positions the company to continue its growth within the UK’s smart meter market, further advancing the country’s efforts to meet its sustainability and energy efficiency goals.
Iberdrola’s Strategic Divestments and Asset Rotation
The sale of SPSMAL forms part of Iberdrola’s ongoing strategy of rotating non-strategic assets to focus on core growth areas, primarily within renewable energy, grid infrastructure, and other strategic initiatives. According to Iberdrola’s Strategic Plan for 2024-2026, the company has already surpassed €10 billion in divestment and alliance operations. This makes the sale of SPSMAL the second-largest divestment in Iberdrola’s history, following the sale of combined-cycle power plants in Mexico earlier in 2024.
Iberdrola’s asset rotation strategy is central to its efforts to maintain a robust financial position while driving the electrification of the global economy. The company’s strategy emphasizes building alliances with key players in the energy sector to fuel long-term growth and financial stability. Over the past several months, Iberdrola has been actively involved in numerous strategic transactions and partnerships.
Recent Alliances and Transactions
Iberdrola’s portfolio of recent deals reflects its commitment to diversifying its business while also driving sustainable development. A few notable transactions and partnerships include:
- Offshore Wind Alliance with Kansai: Iberdrola has recently closed an offshore wind alliance with Kansai, a leading Japanese energy company. The deal includes an investment of €1.28 billion in offshore wind projects in the Baltic region, further bolstering Iberdrola’s global renewable energy portfolio.
- Partnership with GIC in Brazil: Iberdrola extended its collaboration with GIC, a Singaporean sovereign wealth fund, by selling 50% of its stake in Itabapoana, a Brazilian energy company. This is part of Iberdrola’s strategy to optimize its international holdings and increase its focus on high-growth areas.
- Sale of Maine Natural Gas: Iberdrola completed the sale of its natural gas distribution company in Maine to U.S. energy firm Unitil for approximately $90 million. This divestment aligns with Iberdrola’s push to focus on more sustainable, electrified assets.
- Hydroelectric Power Plant Sale: Iberdrola sold its Baixo Iguaçu hydroelectric power plant, a transaction in line with the company’s broader asset management strategy.
- Acquisition of ENW (England and Wales): Iberdrola strengthened its presence in the UK by acquiring ENW, a British electricity distribution company, for a deal valued at €5 billion. This acquisition enhances Iberdrola’s distribution and grid infrastructure capabilities in the UK.
- Merger with Avangrid: Iberdrola completed its merger with Avangrid, a U.S.-based utility company, after acquiring the 18.4% stake it did not already control. The merger is expected to reinforce Iberdrola’s position in the U.S. energy market, particularly in the electricity grid business.
- Sale of Combined Cycle Gas Plants in Mexico: In February 2024, Iberdrola divested more than 8,400 MW of combined cycle gas plants in Mexico for $6.2 billion. This move aligns with Iberdrola’s transition to cleaner energy sources and greater focus on renewables.
- Strategic Agreement with Masdar: Iberdrola entered into a strategic partnership with Masdar, a UAE-based renewable energy company, to co-invest up to €15 billion in offshore wind and green hydrogen projects in Germany, the UK, and the U.S. The first major milestone of this partnership was the agreement for the Baltic Eagle offshore wind farm in Germany.
- Expansion in Brazil’s Transport Networks: In April 2023, Iberdrola closed an alliance with GIC for the expansion of transport networks in Brazil for €430 million. This move reflects Iberdrola’s ongoing commitment to enhancing energy infrastructure in key international markets.
- Joint Venture with BP for Fast-Charging Points: Iberdrola and BP have launched a joint venture to deploy 11,700 fast-charging points across Spain and Portugal, marking a significant investment in the electric vehicle charging infrastructure.
- Hydrogen Projects with BP: In March 2023, Iberdrola and BP established a 50/50 joint venture to develop a 25 MW green hydrogen project, the largest such facility in Spain. This marks a significant step toward Iberdrola’s goal of becoming a global leader in green hydrogen production.
- Co-Investment with Norges Bank: Iberdrola signed an alliance with Norges Bank to co-invest in renewable energy projects. After expansion, this partnership aims to reach 2,500 MW of clean energy capacity.
- Alliance with MAPFRE: Iberdrola and MAPFRE, a Spanish multinational insurance company, have expanded their joint venture, incorporating 150 new MW, bringing their combined total to 450 MW.
- Energy Infrastructure Partners: Iberdrola formed a strategic alliance with Energy Infrastructure Partners to co-invest in the Wikinger offshore wind farm, which will further boost its offshore wind capacity.
The Future of Iberdrola’s Strategy
Iberdrola’s ongoing strategy of alliances and divestments has proven to be a significant driver of its success in recent years. The company continues to focus on its core mission of driving the electrification of the global economy, with particular emphasis on renewable energy, energy storage, and smart infrastructure. By rotating non-strategic assets and focusing on high-growth, high-return projects, Iberdrola aims to continue its leadership position in the global energy transition.
With the sale of SPSMAL to Macquarie, Iberdrola reaffirms its commitment to accelerating the transformation of the energy sector while maintaining a strong financial foundation. The company’s diverse and strategic partnerships will play a critical role in expanding its presence in key markets, from offshore wind in Europe to renewable energy and grid infrastructure in the U.S. and Latin America.
As Iberdrola progresses with its 2024-2026 strategic plan, the company is well-positioned to continue making significant strides toward achieving its sustainability and growth goals. The divestment of non-core assets like SPSMAL not only helps to streamline Iberdrola’s portfolio but also strengthens its capacity to invest in the technologies and projects that will power the future of energy.
