Iberdrola to Acquire Finland’s Largest Electricity Distribution Company Caruna in €5 Billion Deal

Iberdrola has agreed to acquire Caruna, Finland’s largest electricity distribution company, in a transaction valuing the business at approximately €5 billion, including financial debt. The acquisition marks Iberdrola’s entry into the Finnish electricity distribution market and strengthens its strategic focus on regulated electricity network assets.

Under the agreement, Iberdrola will acquire an 80% equity stake in Caruna for €2 billion, while Finnish pension funds AMF and Elo will retain their combined 20% ownership. The transaction is expected to close in the first quarter of 2027, subject to customary regulatory approvals.

Caruna serves approximately 1.5 million customers, representing more than 20% of Finland’s population, and operates around 89,000 kilometres of electricity distribution networks, of which 67% are underground. The company manages two distribution concessions covering the Helsinki metropolitan area, the Joensuu region, and several locations across western and northeastern Finland.

The acquisition aligns with Iberdrola’s strategy of expanding its regulated electricity networks portfolio in stable markets with supportive regulatory frameworks. Finland currently offers an AA+ sovereign credit rating and a regulatory framework extending until 2031, with an estimated return on equity of around 8% for distribution businesses.

Caruna is expected to increase its earnings and regulated asset base by around 7% annually in the coming years. The company plans to invest between €200 million and €300 million annually to modernise and digitalise its electricity distribution network while supporting the country’s growing renewable energy capacity.

Iberdrola said future investment opportunities could expand further due to increasing electricity demand driven by industrial electrification, residential growth, new data centres, and the expansion of transmission infrastructure. Since the beginning of 2026, Finnish regulations have also enabled distribution companies to undertake transmission-related infrastructure projects.

The transaction follows Iberdrola’s recent divestment of its thermal power plants in Mexico, reflecting the company’s continued shift towards regulated electricity networks as a core growth area.

Commenting on the acquisition, Iberdrola Executive Chairman Ignacio Galán said the deal reinforces the company’s commitment to electricity networks as critical infrastructure supporting energy security, competitiveness, and the transition to a more electrified economy. He added that Finland’s stable regulatory environment and Caruna’s growth potential make the investment an attractive long-term opportunity.