Iberdrola - History

History

Iberdrola was created on November 1, 1992 as a result of the merge between Hidroeléctrica Española and Iberduero. Hidroeléctrica Española, also known as Hidrola had started activity in 1907, while Iberduero started in 1944 as the result of the merge between Hidroeléctrica Ibérica (1901) and Saltos del Duero.

The origin of Iberdrola lie in the Spanish industrialisation in the early 20th century, when Hidroeléctrica Ibérica was formed. As of 2011 and with the integration of Scottish Power and Energy East, now renamed Iberdrola USA, the company has become a major multinational group.

In 1840, a group of American entrepreneurs created the Hartford City Light Company, setting in motion the incorporation on the eastern seaboard of the US of Energy East, which would much later become Iberdrola USA. Meanwhile, thousands of kilometres away in Spain, a similar process was underway. In 1901 in Bilbao, a group of entrepreneurs headed by engineer Juan de Urrutia established Hidroeléctrica Ibérica. In 1907, Hidroeléctrica Ibérica shareholders created Hidroeléctrica Española to supply Madrid and Valencia. A decade later, Saltos del Duero was founded, opening the country’s first hydroelectric facility in 1935,the Ricobayo power plant.

World War I forced the industry to seek new sources of energy and to install large distribution networks. Amid huge instability, US power companies began to join forces, attempting to become strong enough to withstand the economic and financial uncertainty. However, no one foresaw the magnitude of the stock market crash of 1929, which brought these emerging groups to the verge of ruin. In Spain, which had experienced a period of economic growth at the start of the 20th century, the industry suffered a severe setback in 1936 whose impact would be felt for the following two decades:the Civil War abruptly halted development, destroyed facilities and made maintaining the little equipment that remained extremely difficult.

Spain suffered international isolation in the 1940s and experienced extreme difficulty in acquiring technology and materials, prices of which were soaring. It was against this backdrop that Hidroeléctrica Ibérica and Saltos del Duero joined forces to form Iberduero.

In 1955, the South of Scotland Electricity Board (SSEB) came into being, paving the way for the creation of Scottish Power four decades later, in 1990. Two years after that, Hidroeléctrica Española and Iberduero teamed up, creating Iberdrola. In the latter part of the 20th century, Iberdrola began expanding into Latin America, mainly Mexico and Brazil.

With ScottishPower and Iberdrola formed in Europe, in 1998 Energy East Corporation came into being in the US following New York State Electric & Gas's acquisition of Central Maine Power, Southern Connecticut Gas Company, Connecticut Natural Gas Company, Berkshire Gas Company and RGS Energy Group (the parent of Rochester Gas & Electric). Following the arrival of Jose Ignacio Sanchez Galan in 2001 Iberdrola began focusing on renewable energy. In 2007, the company continued its international expansion, increasing its presence in the UK and the US via the integration of Scottish Power and Energy East. Iberdrola has faced several merger attempts and made additional acquisitions:

• Attempted merger between Iberdrola and Repsol in 1997, which failed due to a lack of agreement between the companies.
• Attempted merger between Iberdrola and Repsol in 1999, which was rejected by La Caixa (Repsol’s main shareholder).
• Attempted merger between Iberdrola and Endesa in 2000, which was stopped due the conditions imposed by Spanish Prime Minister José María Aznar.
• Attempted hostile takeover bid by Gas Natural for Iberdrola in 2003, which was vetoed by Spain’s National Energy Commission (Comisión Nacional de Energía, CNE).
• Acquisition of Scottish Power by Iberdrola in November 2006, which led to the integration of this company in April 2007. This gave rise to Europe’s third largest utility.
• Acquisition of US company Energy East by Iberdrola in 2008.
• Acquisition of Brazilian company Elektro in 2011.