Source Credit : Reuters
Blackstone Infrastructure has announced its acquisition of TXNM Energy, a utility company, in a significant $11.5 billion transaction, which includes the assumption of debt. This strategic investment reflects Blackstone's confidence in the increasing demand for electricity in the United States and its commitment to supporting the transition toward cleaner energy sources.
Shares of TXNM surged by as much as 8.3%, reaching an all-time high of $57.29, following an all-cash acquisition proposal from Blackstone. This offer values the New Mexico-based utility at $61.25 per share, reflecting a premium of approximately 15% over the stock's previous closing price, according to data from LSEG.
As U.S. power demand is anticipated to reach unprecedented levels by 2025, fueled by the escalating energy requirements of artificial intelligence and cryptocurrency data centers, alongside a rise in residential and commercial consumption, an increasing number of companies are strategically investing in utility sectors.
Last week, NRG Energy, a leading utility provider, announced its intention to acquire select power generation assets from LS Power, an esteemed energy infrastructure investment firm. This strategic transaction is valued at approximately $12 billion, underscoring NRG Energy's commitment to expanding its portfolio and enhancing its operational capabilities in the energy sector.
Blackstone, which oversees $60 billion in infrastructure assets, is strategically positioning itself to capitalize on the stable, regulated returns and significant capital requirements associated with grid modernization, viewing TXNM as a promising long-term investment opportunity. Analysts at Jefferies noted in a recent report that while the proposed offer price exceeds earlier expectations, it does not reflect the premium typically associated with a high-growth company such as TXNM.
The Blackstone-TXNM transaction, anticipated to finalize in the latter half of 2026, is subject to approval from six regulatory bodies, including the New Mexico Public Regulation Commission (NMPRC).
The analysts observed that investor attention will be primarily focused on the successful completion of the current deal, particularly in light of the Avangrid-PNM Resources transaction, which was rejected by the New Mexico Public Regulation Commission (NMPRC) in 2021. However, they expressed confidence in a clear pathway for approval of the present agreement.
Last year, Avangrid, the U.S. subsidiary of Iberdrola, decided to terminate its acquisition of PNM Resources due to its inability to secure the requisite regulatory approvals necessary to finalize the transaction. The New Mexico Public Regulation Commission (NMPRC) determined that the potential risks associated with the deal outweighed the anticipated benefits for state ratepayers.
According to its official website, TXNM Energy supplies electricity to approximately 800,000 residential and commercial customers across New Mexico and Texas.
