Spanish utility Iberdrola’s US unit, Avangrid, has terminated its $8.3bn (€7.58bn) merger with rival company PNM Resources after regulatory approval fell through.

Iberdrola said in a statement on Tuesday that the deal, initially agreed upon more than three years ago in October 2020, had been terminated because “the conditions precedent provided in the agreement for the closing of the transaction have not been met” in the agreed upon time frame.

The two companies failed to get one of the necessary regulatory approvals in time for close by 31 December 2023, Avangrid said in a separate statement. All that was left was approval from the New Mexico Public Regulation Commission, which had originally rejected a proposed acquisition by Avangrid of PNM Resources in 2021 on the basis that the deal’s risks outweighed its benefits.

Both companies had contractual rights to terminate the merger agreement if a deal had not been finalised by the end of 2023.

No clear timeline has been given for a court review of the New Mexico regulator’s blocking of the deal or subsequent regulatory actions, Avangrid added.

“While our merger agreement with PNM has been terminated, we remain more than ever steadfast in our commitment to New Mexico in the development of wind and solar renewables, helping explore options in the new hydrogen economy,” the statement said.

PNM Resources chairman and CEO Pat Vincent-Collawn said in the company’s own statement: “We are greatly disappointed with Avangrid’s decision to terminate the merger agreement and its proposed benefits to our customers, communities and shareholders.

“As we move forward, our strategic plans remain focused on the infrastructure investments necessary to meet the future energy needs of our customers and communities,” she added.

Avangrid also reaffirmed its 2023 guidance for earnings per share (EPS) and adjusted EPS. PNM Resources said it would provide a financial update on 6 February.

The deal was worth $4.3bn excluding debt, or $8.3bn including debt. Once completed, the merger was expected to create a new renewable energy operator worth more than $20bn in combined market value.