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Appetite for quality assets, investment challenges and repositioning are driving sales
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The future gas transmission market moving towards smaller number of larger operators, backed by pension and insurance investment
Despite a background of continuing economic and financial market uncertainty, significant deal activity is taking place in the power and utilities sector, proving the deal lull in the first three months of 2012 was only temporary, according to a new quarterly analysis by PwC of merger and acquisition activity in the European power and renewables sector.
Although deal numbers declined to a relatively low level in Q2 2012, total deal value was buoyed by three multi-billion dollar deals which accounted for US$18.1bn of the US$19.6bn European power deals Q2 total.
Andrew McCrosson, partner, UK power and utilities, PwC, said:
“Much of the power deals total came from two transactions for gas network assets – Open Grid Europe (OGE) in Germany and Snam in Italy.
“This is a significant milestone in the unbundling of Europe’s power utilities and also a major step towards a very changed grid ownership landscape. Companies will be eyeing up opportunities to gain a greater share of the European gas transmission market.”
A flow of US$100m+transactions boosted total renewables deal value to US$1.6bn. Heading the transactions was Belgian company Electrawind’s US$538m reverse takeover of European Cleantech.
Ronan O’Regan, director, energy and renewables, PwC, said:
“A couple of themes emerge from the Q2 2012 Renewables deal data. Firstly an increase in transaction activity in the Turkish market where a number of sizeable deals linked to wind developers highlights the emerging opportunities there.
“In more developed markets, like Spain, while some deals are on there is still significant interest in the market where the economic crisis has reduced government support for renewable.”
Overseas interest in the European power sector during Q2 was centred primarily on the OGE sale and one big pipeline talking point will be the extent of reported Chinese nuclear companies’ interest in the sale of Horizon nuclear power project in the UK by E.ON and RWE.
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