Bilbao-based renewable energy giant Iberdrola said on Wednesday its US business Avangrid Inc. agreed to agreed to buy PNM Resources Inc. of New Mexico for $4.3 billion in cash.

The merger would create one of the largest companies in the US utility industry with 10 regulated electricity companies in six states — New York, Connecticut, Maine, Massachusetts, New Mexico and Texas.

The deal would create the third largest renewable energy operator in the United States with a presence in 24 states.

The combined company would have assets in excess of $40 billion.

“This friendly transaction, recommended by PNM’s board of directors, will be effected via merger,” said Iberdrola.

“PNM’s shareholders will receive $4.3 bn in cash.

“It implies an enterprise value of approximately $8.3 bn considering a net debt plus other adjustments of approximately $4 bn.”

Iberdrola said the $50.3 per share purchase price represents a premium of 10% over PNM’s share price on October 20 and 19.3% over the average PNM share price during the 30 days prior to prior to October 21.

The agreement between Avangrid and PNM is subject to approval by PNM shareholders.

Iberdrola chairman & CEO Ignacio Galán said: “The operation aligns to the strategy we have followed for more than 20 years.

“Friendly transactions, focused on regulated businesses and renewable energy, in countries with good credit ratings and legal and regulatory stability, offering opportunities for future growth”.