Avangrid, which the Financial Times reports is in merger talks with PPL, is one of the few U.S. utilities that may have an appetite for PPL. Citing the potential tax hit, PPL has been reluctant to spin off U.K. utility Western Power Distribution, despite depressed valuations. Avangrid’s parent company, Spain's Iberdrola, already operates in the U.K.
My Thesis
PPL(PPL) is weighed down by unknowns surrounding the regulatory framework for its U.K. electric-distribution utility beginning in April 2023, as well as Brexit and potential re-nationalization risks. This could increase pressure for a strategic review