Qatar to buy 6.16% of Spain's Iberdrola

14th March 2011, Comments 0 comments

Spanish power giant Iberdrola said Monday that Qatari investment fund Qatar Holding will buy a 6.16 percent stake in the group for 2.2 billion euros ($3.1 billion).

Qatar Holding subscribed to a capital increase and then bought additional shares, said Iberdrola, which is raising extra funds to cover recent acquisitions.

"Consequently, Qatar Holding through its subsidiary will hold 6.16 percent of the share capital of Iberdrola outstanding after the capital increase."

The two companies "will cooperate for the purpose of developing new business opportunities in different areas of the global electricity value chain with a focus on high-growth and emerging markets," the group said.

Iberdrola also intends to establish a regional headquarters as well as research and development operations in Qatar.

The capital increase will reinforce Iberdrola's balance sheet and avoid any large increase in debt following the January acquisition of the Brazilian company Elektro in a deal worth $2.4 billion, the company said.

Trading in Iberdrola and its renewable energy subsidiary Iberdrola Renovables was suspended on the Madrid stock market ahead of the announcement.

© 2011 AFP

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