Spanish electric and gas utility Iberdrola SA announced it will buy Energy East Corp. [EAS] for $4.5 billion in cash. The Spanish company had sought a foothold in the U.S. utility industry for some time. EAS shareholders will receive $28.50 per share, a 26% premium to Monday's closing price of $22.54. Shares jumped 18.68% in after-hours trading to $26.75. EAS currently has 1.8 million electricity customers and 900,000 natural gas customers. According to utility consultant Amin Bishara, "European utilities are expanding overseas because of increasing competition in their home markets." Bishara predicts "the next wave of acquisitions in the utility industry is going to be the big European companies buying assets in the U.S."
Sources: Press Release, Bloomberg, Reuters, TheStreet.com, AP
Commentary: Energy East's Share Increase Plan is the Wrong Medicine • Energy East Corp.: Yankee Reliability
Stocks/ETFs to watch: Energy East Corporation (EAS), Iberdrola SA (OTCPK:IBDRY). Competitors: Consolidated Edison, Inc. (NYSE:ED), KeySpan Corporation (KSE), Endesa S.A. (ELE), E.ON AG (EON). ETFs: Utilities SPDR ETF (NYSEARCA:XLU), HOLDRS Utilities (NYSEARCA:UTH), iShares Dow Jones US Utilities Index (NYSEARCA:IDU)
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