Report says new surge in deals led by the States with the top five deals as consolidation becomes major driver in global power markets
A new report by PricewaterhouseCoopers shows that the total value of global mergers and acquisitions by electricity and gas utilities rose to $123.1 billion last year, the highest level since the late 1990s and almost three times the $43.04 billion seen in 2003. With $57.9 billion in such activity, the US dominated the scene, even overtaking Europe as the biggest market for utility acquisitions. Nonetheless, European deals rose almost 90% to $32.8 billion while the total value of Asia-Pacific purchases more than doubled to $15.1 billion. At $26.1 billion, the biggest single deal last year was the merger between Exelon and Public Service Enterprise Group to create the largest US utility in terms of assets.
The resurgence in both the value and volume of global deals reflected a series of shifts in the utilities sector, including the emergence of infrastructure and private equity buyers, purchases by Asian utilities and investment companies and a more cautious approach to the market with a drive to consolidate the position of electricity and gas suppliers in domestic and regional markets.
Mark Hughes, head of PwC’s European utilities team, said: “Renewed confidence has seen regionalisation replace globalisation as the dominant strategy,” adding that deal activity was likely to remain high in 2005 with the prospect of the mega-privatisations of Electricite de France and Gaz de France.
The full report may be found at: www.pwc.com/powerdeals