Iberdrola agreed to acquire 80% of Caruna, Finland’s largest electricity distribution company, in a transaction that values the entire company at €5 billion, approximately $5.7 billion, including financial debt.
The acquisition will allow the Spanish energy company to enter the Finnish market and expand its regulated networks business. Caruna serves nearly 500,000 customers, representing about 1.5 million people, more than 20% of the country’s population.
Iberdrola enters Finland’s electricity market
Firstly, Iberdrola will disburse approximately €2 billion to acquire 80% of the capital. Pension funds AMF and Elo will jointly retain the remaining 20% of the distributor.
The stake will be acquired from Suomi Power Networks TopCo, a company controlled by Ontario Teachers’ Pension Plan and funds managed by KKR. The structure includes an upfront payment and a deferred portion over the months following closing.
Furthermore, the transaction is expected to be completed during the first quarter of 2027, subject to regulatory approvals and the usual conditions applied to this type of transaction.
Caruna operates an 89,000-kilometer network
Additionally, Caruna manages approximately 89,000 kilometers of electricity distribution networks, with about 67% of the infrastructure underground, a feature that improves the system’s resilience against storms, snow, and other weather events.
The company operates through two distribution concessions; its assets cover areas near central Helsinki, the Joensuu region, and several territories in western and northeastern Finland.
Joensuu concentrates industrial activity and is experiencing an increase in demand associated with residential projects and new data centers. This growth makes the electricity grid an essential infrastructure for the region’s economic development.
Investments to strengthen and digitalize the network
Subsequently, Iberdrola plans to allocate between €200 million and €300 million annually to strengthen and digitalize Caruna’s infrastructure. These investments will be aimed at improving distribution capacity, increasing service reliability, and facilitating the connection of new renewable generation.
The company estimates that Caruna’s profits and asset base could grow by approximately 7% annually over the coming years.
Likewise, investment needs could increase due to the electrification of the economy, data center consumption, and the development of new industrial and residential areas.
Finnish regulation also allows distributors to participate in certain electricity transmission infrastructures starting in early 2026. This possibility opens an additional avenue to expand the network business in the country.
Finland offers a stable regulatory framework
Finland has an AA+ credit rating and maintains a regulatory framework for the electricity sector in force until 2031. According to the data released on the transaction, this system offers a return on capital close to 8%.
This environment provides revenue visibility and facilitates long-term investment planning, also aligning with Iberdrola’s strategy to concentrate resources in countries with institutional stability and predictable rules.
The acquisition of Caruna adds to Iberdrola’s divestment of thermal power plants in Mexico; with both moves, the group accelerates the reallocation of capital towards electricity grids and regulated markets.
Networks gain weight in Iberdrola’s plan
In 2025, Iberdrola increased its investment plan until 2028 to €58 billion, a significant portion of these resources is directed to distribution and transmission networks in the United Kingdom, the United States, Brazil, and other strategic markets.
In the first half of 2026, the company allocated approximately €4.4 billion to networks, 42% more than during the same period of the previous year.
The regulated asset base reached approximately €55 billion after growing 11% year-on-year. This progress was supported by investments executed in the United Kingdom, the United States, and Brazil.
Finally, the acquisition of Caruna allows Iberdrola to incorporate a consolidated operator, an extensive distribution network, and electricity demand with growth prospects. The operation strengthens its image in Europe and expands its exposure to regulated infrastructures linked to electrification.
Source: Rigzone
Photo: Shutterstock
