M&A: Renewable deals up 25%, while global energy deal market drops 10% in 2013-PwC

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A recent study by PricewaterhouseCoopers (PwC) reveals that the global energy mergers and acquisitions (M&A) fell by 10% in 2013, to 141 billion US dollars. An intense activity in the field of mergers and acquisitions was reported by Asia Pacific with 36% of the total, and the only area where there was an increase in volume of 25%, was that of the renewables.

The total number of transactions in energy decreased by 6%, while the largest decrease in volume, of 38 percent, was registered by the natural gas segment.

Mergers and acquisitions in the renewables sector rose to 21.9 billion dollars in 2013, 25% more than the previous year figure of 17.5 billion dollars.
At the same time, transactions in domestic markets dominated the electricity and gas segments, with 66 % of the total, while international transactions volume rose from 25% to 34%.

After a year in which M&A activity in the power sector moved down a gear, deal activity is set for a return to an upward trend during 2014, according to PwC’s annual Power and Renewables Deals report.

Norbert Schwieters, global power and utilities leader, PwC, said:

“Some encouraging trends lead us, on balance, to anticipate upward deal momentum in the year ahead. After a year in which considerable sector uncertainty has affected deals, we anticipate greater confidence during 2014. Participation in the sector continues to widen with the attractions of contracted or regulated returns pulling in a wide range of buyers.”

Technology, finance and politics are all sources of disruptive change hitting the sector and this has been among the factors weighing on deals in 2013.

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Bogdan Tudorache

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