Spanish electricity company buys Hispasat for $1.1 billion

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WASHINGTON — Spanish power company Red Eléctrica Corporación announced an agreement Feb. 12 to buy out Abertis’ 89.7 percent stake in domestic satellite operator Hispasat for 949 million euros ($1.08 billion).

The purchase, to be funded with debt, would make Red Eléctrica the majority shareholder for Hispasat. Spain’s state-owned industrial holding company Sociedad Estatal de Participaciones Industriales’ would have the second largest share of Hispasat at 7.4 percent, with CDTI, Spain’s Centre for the Development of Industrial Technology, holding the remaining 2.9 percent.

Red Eléctrica confirmed local press reports of its interest in Hispasat in 2017, around the same time Abertis, a toll-road operator, was purchasing French satellite operator Eutelsat’s stake in Hispasat.

Like Abertis, Red Eléctrica will require approval from Spain’s Council of Ministers, along with other regulatory bodies, a process the company said will prolong completion of the acquisition until the second quarter of 2019.

María Teresa Quirós Álvarez, Red Eléctrica’s chief financial officer, said in a Feb. 12 statement that the Hispasat transaction would transform the power company into “one of the leading telecoms infrastructure operators in Spain.” She said Red Eléctrica’s telecom subsidiary already generates more than 330 million euros annually, and commercializes Spain’s second largest fiber-optic network.

Hispasat reported 235 million euros in revenue for 2017 and profits of 80.5 million euros. Its satellites mainly cover Europe and the Americas.

Red Eléctrica reported revenue of 1.47 billion euros for the first nine months of 2018, with a profit of 520.7 million euros.

Abertis said its divestment from Hispasat is “in keeping with the company’s strategy to become a pure toll road operator.”