US-based TerraForm Power has launched a voluntary tender offer to acquire 100% shares of Spain’s Saeta Yeild for about $1.2bn.

As per the offer, TerraForm will pay €12.20 ($15.10) in cash per share to Saeta’s shareholders.

The US firm claims that the tender offer is supported by Saeta’s shareholders who together own more than a 50% interest (approximately $600m) and have committed to sell into the offer.

In Spain, Saeta owns and operates 1,028MW of rate-regulated and contracted solar and wind assets.

The acquisition would increase TerraForm’s overall portfolio and establishes a scale presence in its target Western European market.

The Spanish firm’s portfolio of recently built renewable energy assets are mainly located in Western Europe, including 778MW of onshore wind and 250MW of concentrated solar.

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These assets are claimed to have an average age of six years and a remaining useful life of more than 25 years.

The acquisition, which is subject to closing conditions and regulatory approvals, is expected to be completed in the second quarter of this year.

The deal will see TerraForm able to acquire 100% of the shares of Saeta provided that at least 90% of the shares are tendered in the offer.

TerraForm Power CEO John Stinebaugh said: “With the Saeta acquisition, we are excited to significantly grow our portfolio of high-quality wind and solar assets and expand our geographic footprint with a scale position in Western Europe.

“With Brookfield as our sponsor, we believe this transaction demonstrates our ability to originate acquisitions of high-quality assets on a value basis that are highly accretive to our shareholders.”

TerraForm Power plans to finance the transaction with a $400m equity offering, fully backstopped by Brookfield, and the remaining from available liquidity.