Spain, July 21, 2026 – Spain-based electric utility company Iberdrola (Baa1 stable) announced that it has entered an agreement with KKR and Ontario Teachers’ Pension Plan Board (Aa1 stable) to acquire an 80% stake in Finland’s largest electricity distributor, Caruna, for a cash consideration of about €2 billion. Iberdrola expects to fund the acquisition with existing cash and new debt. 50% of the purchase price will be paid upon closing of the transaction, which is expected in the first quarter of 2027, whereas the remaining 50% will be paid 30 months after the closing date. Caruna serves 1.5 million people and its regulated asset base (RAB) is expected to reach €2.536 million in 2027. The acquisition remains subject to regulatory approval.
The acquisition will strengthen Iberdrola’s risk profile. Iberdrola will raise its exposure to regulated activities and the stability of its cash generation because of Caruna’s perpetual concession and Finland’s well-established and transparent regulatory framework, although it is less predictable than that of some of its Western European peers. Iberdrola will also increase its geographic diversification as Finland (Aa1 stable) is a new European market for the group, helping to offset recent market exits, in particular its exit from Mexico. The acquisition also aligns with the group’s longstanding strategic focus on network development, which accounted for €9 billion or 62% of the group’s capital spending in 2025.
The benefits are somewhat moderated by Caruna’s relatively small scale within the wider Iberdrola group. We expect the company- adjusted EBITDA contribution of regulated activities to increase to about 51% post-acquisition from 49% in 2025, and company- adjusted EBITDA generated outside Spain to grow to 63% post-acquisition from 62% in 2025.
While we view the acquisition as relatively expensive at around 2.0x enterprise value/regulated asset value, we expect it to modestly weaken Iberdrola’s financial profile, driving a 70-90 basis point decline in its Moody’s-adjusted funds from operation (FFO)/net debt given that 50% of the purchase price will be paid 30 months after closing. As a result of the group’s strong operating performance and substantial headroom relative to our ratio guidance, we anticipate that Iberdrola will remain comfortably positioned in its rating category.
However, the transaction will temporarily increase the already elevated structural subordination, given Caruna’s relatively high leverage. Gross debt at Iberdrola’s subsidiaries will account for about 38% of consolidated debt upon closing, up from 35% (including 50% of Iberdrola hybrids) as of year-end 2025. Iberdrola confirmed its intention to use intercompany loans to replace Caruna’s existing external debt at maturity or when financially attractive to do so. This approach mirrors the financial policy the group applies to its North American operations, and plans to apply to the external debt of recently acquired Electricity North West (Baa1 stable).
Caruna is the largest electric distribution operator in Finland, serving 21% of the country’s electricity supply points, under a well- established and transparent regulatory framework. The company operates 89,300 kilometers of distribution lines, most of which are underground. In 2025, Caruna reported EBITDA of €343 million and net debt of €3.1 billion, including a €770 million shareholder loan to be 80% repaid as part of the transaction.
Credit Outlook: July 27, 2026. Pg. 20
Moody’s Investors Service
Atlantic Investors Service 