North American power deals: Mergers & acquisitions report

Q4 2018

Canadian power and utilities (P&U) deal values fell for the second year in a row in 2018—which is in stark contrast to the banner 2016 deals market—but deal volumes stayed strong.

Only one Canadian deal made the North American Top 10 in 2018 (CPPIB’s investment in a portfolio of Enbridge’s renewable assets). This is in contrast to previous years when major Canadian utilities like TC Energy, Enbridge, Emera and Hydro One were doing mega deals in the United States. It’s also worth noting that Hydro One’s planned acquisition of Avista was cancelled in January 2019 after failing to obtain regulatory approval, undoing one of 2017’s larger P&U deals.

Looking forward to 2019, we anticipate that a continued rise in interest rates, regulatory pressures and balance-sheet capacity may impact mega deals. What’s more, we expect that asset and portfolio deals will remain strong in the coming year, which is consistent with what we’re seeing from the completed, announced or rumored asset divestment programs from several major Canadian P&U players.

“In 2018, deal values fell for the second year in a row, and we only saw one Canadian deal make the North American Top 10. Looking to 2019, we anticipate that the continued rise in interest rates, regulatory pressures and balance-sheet capacity may impact mega deals. Consistent with completed, announced or rumored asset divestment programs from players like TC Energy, AltaGas and Enbridge, we expect that asset and portfolio deals will remain strong in 2019 given what’s happening with completed, announced or rumored asset divestment programs from several major Canadian P&U players.”

Ken Goodwin, National Deals Leader, Power & Utilities

Q4 key trends and highlights

Overall deal value fell $72.2 billion in 2018

Strategic deals drove deal value and volume

Limited inbound activity with two deals

Corporate and asset deals nearly split deal value in the quarter, with assets deals driving deal volume

Renewable deals drove 26% of deal value for the quarter, accounting for six deals in the quarter

Power and Utilities quarterly deals insights

Contact us

Helen Bremner

Partner, National Industry Leader, Power and Utilities, PwC Canada

Tel: +1 403 509 7404

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