Iberdrola has reached an agreement to acquire an 80% equity interest in Caruna, Finland’s largest electricity distribution company. The transaction values 100% of Caruna at approximately €5 billion, including financial debt.
Iberdrola will pay €2 billion for the controlling stake. Nordic pension funds AMF and Elo will retain their existing combined 20% interest in the company.
Caruna distributes electricity to approximately 1.5 million people, representing more than 20% of Finland’s population. Its network spans about 89,000 kilometers, with approximately 67% installed underground.
The company operates through two electricity distribution concessions. Its service areas include the region surrounding central Helsinki, the Joensuu area and parts of western and northeastern Finland.
Demand across Caruna’s network is being supported by industrial development, residential construction, renewable energy growth and new data centers. Finland has also allowed electricity distribution companies to develop certain transmission infrastructure since the beginning of 2026, creating another potential investment opportunity.
Caruna is expected to invest between €200 million and €300 million annually to strengthen, expand and digitalize its electricity network. Iberdrola said the company’s earnings and asset base are projected to grow by approximately 7% annually over the coming years, although actual performance may differ.
The acquisition advances Iberdrola’s strategy of concentrating investment on regulated electricity networks in stable markets. The company recently divested thermal power plants in Mexico as it redirected capital toward transmission and distribution infrastructure.
Iberdrola highlighted Finland’s AA+ credit rating and electricity network regulatory framework, which is established through 2031. The framework currently provides an estimated return on equity of approximately 8%.
Electricity networks are becoming increasingly important as economies add renewable generation, electrify transportation and industrial processes, and build energy-intensive computing infrastructure. Distribution companies must expand and modernize their systems to connect these new sources of supply and demand.
The acquisition is expected to close during the first quarter of 2027. Completion remains subject to customary regulatory approvals, and there is no assurance that the transaction will close according to the anticipated timetable.
KEY QUOTE:
“This transaction reinforces our strategic commitment to electricity networks as essential infrastructure for promoting energy security, self-sufficiency and competitiveness.”
“Finland offers high credit quality and a predictable and attractive regulatory framework, while Caruna has strong growth prospects due to the need for networks linked to new renewable generation, rising demand from the industrial and residential sectors and the electrification of the economy.”
Ignacio Galán, Executive Chairman of Iberdrola
