Worldwide M&A activity in the power and renewable sector almost doubled last year, according to a new report.
PwC’s annual findings show momentum is expected to continue throughout 2016.
Following a strong performance in 2014, M&A activity has almost doubled since, reaching a record high of $55.3bln.
Momentum is not expected to be confined to emerging markets but to more mature markets also.
Norbert Schwieters, global power and utilities leader, said: “The record highs for Asia Pacific and the strength of renewables activity across other territories from Europe to Central and
South America clearly demonstrate the global and technological shifts taking place across the sector.
“We’re seeing a strong flow of power and renewable deals in countries like India, continuing major outbound moves by Chinese companies and a good flow of attractive grid assets coming to the deal table. If anything, wider economic uncertainty will heighten the attractiveness of such assets.”
Renewables deals have nearly doubled in Europe and more than doubled in Asia Pacific.
Meanwhile it is up between a quarter and a third in North America and up nearly threefold in Central and South America.
PwC said it was not the number of deals that was “notably higher” but the size of the deals has markedly increased.
This has driven the share of the overall power and renewables deals market up from 12% in 2014 to 28% in 2015.
Andrew McCrosson, partner, PwC power and utilities said: “We anticipate a bumper M&A year ahead for power and renewables transactions in Europe and deal dynamics in the US are also strong. A
number of big deals are already underway with good prospects of others to follow.”
The report also predicted more strategic alliances between power companies and outside partners, including sovereign wealth funds and companies from other sectors.
Meanwhile there will also be an increase in US deal dynamics including mid-cap consolidation and the move away from coal to gas-fired and renewable generation.
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