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Iberdrola Offer: Final US Regulatory Approval now received

12/03/2007

The final regulatory hurdle in Iberdrola’s offer for ScottishPower has been cleared with the approval from the State of New York Public Service Commission. This ruling, together with approvals from The European Commission and FERC in the US, ensures Iberdrola has met all necessary regulatory requirements.

The Board of ScottishPower has unanimously recommended the Iberdrola Offer to Shareholders and we are now in the key phase of the transaction process - that of shareholder approval. All the necessary scheme documentation is now with shareholders. The Board believes the Iberdrola offer enables ScottishPower to compete on a global scale in an increasingly competitive environment without the adverse social consequences for ScottishPower employees that may have been associated with any other takeover. Iberdrola have given assurances to honour the contractual benefits, terms and conditions of ScottishPower employees for a minimum of two years.

For every ScottishPower Share, shareholders will receive £4.00 in cash and 0.1646 of a New Iberdrola Share. A special dividend of 12p per ScottishPower Share will also be paid after the Offer is completed. The Iberdrola offer will be carried out through a “Scheme of Arrangement”. This is a legal arrangement between a company and its shareholders and is a common process for dealing with acquisitions of listed companies in the UK. The Scheme has to be approved by ScottishPower shareholders at a Court Meeting and a separate Extraordinary General Meeting to be held on 30th March 2007. All ScottishPower Shareholders are strongly urged to vote.

It is particularly important that as many votes as possible are cast at the Court Meeting so that the Court may be satisfied that that there is fair representation of ScottishPower Shareholders’ opinion. Once approved by ScottishPower Shareholders, the Scheme will become effective only if approved by the Court of Session in Edinburgh, expected to take place on 23 April. Accompanying the Scheme Documents are all the necessary voting forms with an explanation on how to vote. ScottishPower Shareholders are strongly urged to return their Forms of Proxy as soon as possible.

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