Power deal levels to grow
Global M&A value in the power and renewables sector has reached the highest level seen in the current decade – up 70% year-on-year – and any further upward movement would begin to move sector deal value back towards the heady levels last seen before the credit crunch, according to PwC and Strategy’s latest annual Power and Renewables Deals report.
The report states there is plenty of potential in the global power and renewables M&A pipeline but the latest surge may not be indicative of the long-term trend. A more globally-balanced spread of deals is expected in 2015 with fewer of the US mega-deals that buoyed 2014 totals. But the flow of divestment- and privatisation-driven deals looks strong and so there are plenty of reasons to think any dip in US deal value will be taken up, in part at least, by activity elsewhere.
The report found total worldwide power and renewables deal value rose from $143.3 billion (€126 billion) in 2013 to $243.1 billion (€215 billion) in 2014. It’s the first time the total has broken out of the $100-200 billion (€88-176 billion) range established since the pre-credit crisis year of 2007.
A series of big but one-off restructuring deals in the US gas sector, involving Kinder Morgan and Williams, contributed $92.2 billion (€81.4 billion) to the worldwide M&A total.