Ignacio Sánchez Galán, the man behind Iberdrola’s £11.6 billion bid for ScottishPower, was partly motivated by a desire to keep control of Spain’s second-biggest energy company.
Actividades de Construcción y Servicios SA (ACS) — the energy company’s largest shareholder, is awaiting regulatory approval that could enable it to more than double its stake in Iberdrola.
The deal with ScottishPower could enable ACS to achieve its plans for a merger between Iberdrola and Union Fenosa. Mr Galán said yesterday that the acquisition of ScottishPower, if successful, would make it easier for Iberdrola to merge with a rival Spanish utility. Iberdrola’s core businesses are wind-power generation and gas. The company is a leading proponent of creating a single European energy market.
In the first nine months of the year, Iberdrola’s net profit increased 26 per cent to £834 million, but the company’s revenue in its core Spanish electricity business fell 11 per cent in the first nine months as the company lost £351 million, mostly due to regulatory changes in the Spanish wholesale market.
Advertisement
Iberdrola expanded recently into the Middle East, announcing this month that it had won an £839.5 million contract to build a wind plant in Qatar. It also has a large profile in the United States and Mexico, buying the American companies MREC Partners and Midwest Energy Projects for €30 million (£20 million). It also invested £349 million in the biggest wind energy plant in Mexico, Altamira V.
Mr Galán, 56, became the company’s chief executive officer in April last year, after joining in 2001. Born in Salamanca, he previously held executive posts at Industria de Turbo Propulsores, Grupo Tudor and the mobile phone company Airtel.
Mr Galán was ranked the 48th most influential Spaniard by El Mundo, the Spanish newspaper, but in Britain many will see Iberdrola as another member of the “new Spanish Armada” of companies launching raids on British groups.