European Power & Renewables Deals: Quarterly M&A outlook, Spring 2012

The European power and utilities sector is proving a modest source of deal activity despite the overall downturn in mergers and acquisitions in the wider global economy in Q1 2012. There are plenty of headline reasons not to be optimistic about the European power sector deal outlook – eurozone worries, macro-economic uncertainty and stretched company balance sheets among them – but the reality is that there are also a number of specific factors that are providing significant underlying deal momentum. The European power sector is capable of delivering notable deal demand despite the wider deal doldrums.

Spring 2012 key trends:

  • Total deal value was US$5.4bn, down from the US$8.1bn low reached as the sovereign debt crisis intensified in Q3 2011 (and less than a third of the US$18.3bn recorded in the first quarter of 2011).
  • In parallel with European deal value, global deal value in the sector has fallen.
  • European deal value accounted for a fifth of total global sector M&A value in the first three months of 2012.