Power & Renewables Deals 2017: what lies ahead for M&A?
It was a big year for power deals in 2016 and this year looks set to continue to break records. In our latest Global Power and Renewables Deals report, we provide some analysis on the year that was and provide an outlook for 2017.
In Asia Pacific, 2016 was a record year for buyers with deal values at US$66bn up 8% from US$61bn in 2015. We expect demand to continue this year driven primarily by China and Australia that could potentially drive up the market value of assets as investors compete over asset availability. Yet any supply shortage that increases the market value of assets is likely to draw more sellers into the market.
Chinese investors are likely to remain very active yet will face competition from local infrastructure and superannuation funds so the FIRB recommendations on the upcoming CKI/DUET deal will be interesting to watch. The outcome of the WA election will also determine the possible IPO of Western Power which could be one of the larger global deals for 2017 if it goes ahead.
Globally, M&A value in 2016 was US$293bn, up $47bn from $199bn in 2015. In the US, growth through regulated assets was strong, particularly gas network transactions, although there has been some recent decline in momentum potentially due to upward pressure on interest rates creating some uncertainty. In Europe, companies have been resetting their strategy and an increase in deals is likely in 2017 through their corporate restructure and divestment programs.
We will also see more deals activity this year with majors acquiring emerging technology players to access new services that will unlock the value being created in and around the transition of our energy market.
View the Report