Trends shaping dealmaking
Deals involving integrated assets, particularly in Europe, drove value in 2018, though a large number of smaller renewables transactions made up almost half of all deals globally. Key trends shaping dealmaking included:
Two European deals boost deal value: Europe was the region that contributed most to P&U deal value in 2018, with almost half (49%) of deals taking place here. Most of this investment was attributed to two large integrated deals in Q1 and Q2:
- E.ON’s US$46.7b acquisition of Innogy from RWE was the largest deal of 2018 and a transformative transaction for Europe’s energy sector.
- The second largest deal was China Three Gorges’ proposed takeover bid for Portugal’s EDP, which owns transmission and distribution across Europe.
Americas integrated deals contributed one-third of region’s value: Always attractive to investors, the Americas P&U sector hosted five multibillion-dollar integrated deals in 2018, which together contributed US$32b, or 32%, of the region’s total deal value. The largest integrated deal was announced in Q1: the all-stock merger of SCANA Corporation and Dominion Energy, which was approved and completed at the start of 2019.
Renewables make up almost half of deal volume: Globally, renewables made up 46% of total deal volume – 253 deals – but only 19% of total deal value (US$48.3b). Strong policy support saw Europe attract the largest share of renewables, with more than 40% of deal value and volume.
Largest Q4 deal demonstrates increasing sector convergence: In a landmark transaction that was the largest deal of the Q4, US water utility Aqua America announced plans to acquire Peoples Gas for US$4.3b. This deal, once complete, will create one of the largest publicly traded water utilities and natural gas local distribution companies in the US. Read more about the transaction rationale in our interview with Aqua’s CFO Dan Schuller.