Avangrid Inc. and PNM Resources Inc. announced the extension of their merger agreement to April 20, 2023, to buy more time to secure the approval of New Mexico regulators.
The companies also filed a notice of appeal with the New Mexico Supreme Court regarding the New Mexico Public Regulation Commission's rejection of the merger in December 2021.
Avangrid announced plans to acquire PNM Resources in October 2020, agreeing a $4.32 billion cash deal that would include the assumption of about $4 billion in debt for an overall enterprise value Avangrid put at $8.3 billion.
Under the previous agreement, the deal could be terminated by either party under certain circumstances, including failure to consummate by Jan. 20, 2022, subject to a three-month extension.
On Dec. 8, 2021, the New Mexico PRC voted 5-0 to block the proposed acquisition of PNM Resources by Avangrid. In rejecting the deal, Commissioner Cynthia Hall said there were "strong red flags flying in our face" regarding a criminal investigation in Spain, where Avangrid parent company Iberdrola SA is headquartered, "deceitful behavior," bribery and other cases involving Avangrid.
Avangrid subsidiary Central Maine Power Co. has also been embroiled in a number of operational issues in its home state.
The New Mexico PRC will transition to a three-person appointed commission in 2023. By then, the governor's support for the deal might carry more weight, as noted by Wells Fargo Securities in December 2021.