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PwC: Institutional M&A Investment Share Doubles
January 29, 2013
By Rob Starr, Content Manager, Big4.com
According to the PwC annual Power and Renewables Deals report released recently, together with infrastructure funds, institutions accounted for a third of all power and renewables deal value in 2012.
The report maps a number of deal hot spots and investment opportunities around the world in the power and renewables sector for the year ahead like Brazil – a government move to reduce energy prices to industry and consumers has hit the market capitalisations of power companies hard. But this is unlikely to deter investor focus on the long-term growth fundamentals. Indeed, it may provide a spur to M&A by reducing target prices and also encouraging long-overdue domestic sector consolidation.
There is potential for an unprecedented flow of deals for onshore wind generation assets in Europe with an estimated potential total sales value of US$4–5bn coming onto the deal table in the last few months. In the Asia Pacific region, the report highlights strong wind project deal flow in Australia in 2013, with interest high from Chinese and Japanese investors as well as Australian pension funds.
Rob McCeney, partner, US power and utilities, PwC , said:
“Increased exports to higher priced markets, a shift to gas-fired base load generation, growing industrial consumption and expanded uses of gas for transportation fuels and derivative products will all start add to upward gas price pressure over the next few years. It’s very possible that we will see moves, particularly from private equity buyers, for currently cheap assets that could gain from a longer term upward gas price trend.”
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