22
| 14TH - 20TH FEBRUARY 2020 | UTILITY WEEK
Finance & Investment
Market view
T
he UK power and utilities sector saw
the number of mergers and acquisitions
(M&A) transactions decline in 2019.
Deal volumes were 12 per cent below 2018
levels and 30 per cent below 2017 levels due
to a drop in renewable sector deal numbers.
The further removal of renewables sub-
sidies and the wider political uncertainty
in the UK dampened investment appetite
in the sector. Apart from a small number of
£1 billion-plus transactions, the majority of
deals were smaller than seen in recent years.
This analysis covers M&A transactions
where the target is based in the UK, across
the generation (coal and gas), renewables
(wind, solar, hydro and biofuel/waste-to-
energy), nuclear, water and waste, energy
networks, energy retail and third-party inter-
mediaries (TPIs), and energy technology
(EnTech) sectors.
The number of UK power and utilities
M&A deals reduced from 64 in 2018 to 55
in 2019. This reduction was mostly due to
a drop in the number of deals in the wind
and solar sectors. Seven water sector deals
were completed during the year, compared
with ten in 2018, and the number of biofuel/
waste-to-energy transactions also reduced
from ten to eight. The three sectors where
deal numbers increased notably were energy
retail/TPIs, energy networks and EnTech.
There were a number of signi' cant deals
during the year – the sale of National Grid's
remaining interest in Cadent Gas, the sale
of Electricity North West and the sale of
Iberdrola's stake in the East Anglia ONE
oš shore wind farm.
Subdued M&A activity in solar and wind
The solar and the wind sectors saw the num-
ber of transactions fall during the year. The
number of solar deals reduced from 13 in
2018 to six in 2019, while the number of wind
transactions dropped from 18 in 2018 to 13 in
2019. This decline was largely due to the clo-
sure of the Renewables Obligation subsidy
Power and utilities
M&As decline in 2019
The further removal of renewables subsidies and the wider UK
political uncertainty dampened investment appetite in the power
and utilities sector in 2019. Dan Gambles charts the deals.
The number of UK
power and utilities M&A
deals reduced from 64
in 2018 to 55 in 2019
