International Finance

Energy, mining and utilities sector leans green as M&A activity dips

energy, utilities, mining, green, M&A, data and intelligence, coal industries, natural gas, oil, US, Europe, Middle East, Africa, Germany, Saudi Arabia, steel, aluminium, solar, wind
According to the report, new research suggests that the Energy, Mining & Utilities (EMU) sector has undergone a structural shift as EMU leans green

Mergermarket, leading provider of M&A data and intelligence, has released their Q1 2018 report. Highlights of the report include:

  • Global EMU activity in Q1 2018 saw $170.3bn worth of deals over 311 transactions. Deal value is down 4.6% compared to the same period last year, but in line with the global trend of less activity – with the US enacting steel and aluminium tariffs and in the early stages of a trade war with China, geopolitical uncertainty has left many dealmakers cautious across the board.
  • The sector’s top transaction was Germany-based E.ONs $46bn acquisition of innogy and its customer retail and network businesses. Such moves have been examples of Germany’s Energiewende – the country’s policies attempting to move past carbon-based energy consumption patterns.
  • On the horizon is UK-based SSE’s proposed acquisition of nPower, a local subsidiary of innogy, currently in review by the Competition and Markets Authority.
  • Though oil and gas continues to drive some activity through consolidation in the near term, on the horizon, renewable energy might be the way consumers choose to power their lives. In March, Japan’s SoftBank Group and the Saudi Arabian government pledged to invest in a 200GW solar farm project in Saudi Arabia worth approximately $200bn.
  • Demand for gold as the usual safe haven during periods of geopolitical instability is likely to go up, particularly in Europe, the Middle East, and Africa. The European renewable space is seeing an uptick in activity as the market matures and moves past government subsidies dependence with technology and market economies helping renewable energy assets find buyers’ interest.

“Energy, Mining & Utilities, like many sectors over the past year, has undergone a bit of a structural shift. Long dominated by oil and gas transactions, EMU now appears to be edging closer toward the power and utilities space. Though countries such as the US have, of late, tended to favour policies that benefit the oil, natural gas, and coal industries, the rest of the world has begun to invest more heavily in renewable sources of energy, such as solar, wind, and geothermal, led, incidentally, by Europe’s oil majors,” said Elizabeth Lim, Senior Analyst & Research Editor–Americas at Mergermarket.

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