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PwC: North American Power & Utilities M&A activity jumps

By Rob Starr, Content Manager,

According to the PwC  quarterly M&A snapshot – North American Power Deals: Q4 2012, North American power and utilities merger & acquisition (M&A) activity continued on a steady growth path, with deal volume more than doubling in the fourth quarter of 2012 compared to the same timeframe in 2011.

PwC furthers alternative energy sources accounted for 40 percent of the transactions in the fourth quarter of 2012, a significant increase compared to seven percent in the third quarter of 2012 and two percent in the fourth quarter of 2011. Wind transactions accounted for nearly 60 percent of alternative deals in the fourth quarter of 2012.

The number of announced power and utilities transactions greater than $50 million has consistently risen since the second quarter of 2012. There were 13 deals totaling $4.9 billion in the final quarter of 2012, an increase in both sequential and year over year activity compared to eight deals in the third quarter of 2012 and six in the fourth quarter of 2011. Smaller asset deals dominated M&A activity through the end of 2012 with fewer large transformative transactions over $1 billion according to PwC.

Jeremy Fago, PwC U.S. power and utilities transaction  services leader comments:

With continued low natural gas prices and lingering uncertainty around load recovery, environmental regulations and tax policies and incentives, we saw an uptick in generation asset and renewable transactions through the end of 2012,” he says.  “Additionally, we saw an increase in wind deal activity as expiration of the Production Tax Credit approached at the end of December. Looking at the deal landscape throughout the year, we anticipate more merchant divestiture activity as companies look to rebalance around core regulated businesses.”


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