Spanish electric utility Iberdrola has announced an agreement to acquire Caruna, a leading Finnish electricity distribution company, in a transaction valuing the company and its debt at roughly $5.7 billion.

According to a release, the transaction involves a $2.3 billion investment for 80% of Caruna’s equity. Swedish AMF Pension Insurance and Finnish Elo Mutual Pension Insurance Company will remain as local co-investors, retaining minority stakes of 12.5% and 7.5%, respectively.

Caruna, Finland's largest electricity distribution operator, serves more than 20% of the Finnish population (over 1.5 million people). The company operates a network of roughly 89,000 kilometers across two distribution regulatory concessions (regional licenses), 67% of which is constructed underground primarily in the area surrounding central Helsinki and the Joensuu region.

Iberdrola notes that strong industrial activity and growing demand linked to new data centers and residential developments in western and north-eastern Finland heavily influenced the acquisition.

“This transaction reinforces our strategic commitment to electricity networks as essential infrastructure for promoting energy security, self-sufficiency and competitiveness,” said Ignacio Galán, executive chairman of Iberdrola, in a statement.

The acquisition marks a shift in Iberdrola’s previous investment strategy of thermal power plants in Mexico, as an independent power producer. Now, the company is redirecting its capital into energy networks (such as distribution power lines), which they claim have “attractive regulatory regimes.”

“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,” Galán added.

According to S&P Global, Finland holds an AA+ credit rating and a regulatory framework through 2031 that offers a regulated return on equity of around 8%. Iberdrola anticipates increasing its earnings and asset base by roughly 7% annually, backed by projected electricity network investments of $231 million to $347 million over the coming years. Completion of the acquisition is expected in the first quarter of 2027.