Entering 2025, the energy transition remains the most significant driver of M&A activity in the global energy, resources and utilities (EU&R) industry. However, the shape and pace of change will vary significantly by both region and sector as factors such as geopolitics, energy security, the surging demand for energy needed to power AI and other market dynamics play out.
As global players navigate these regional dynamics, the race to secure reliable, affordable and sustainable energy sources is intensifying, setting the stage for robust M&A activity across all elements of EU&R in 2025.
In the US, the re-election of Donald Trump as president has ushered in a policy landscape favoring fossil fuels that may also roll back some environmental regulations. This shift is expected to drive investments in natural gas infrastructure and fossil generation assets, while renewable energy is expected to continue to benefit from long-term support despite near-term uncertainties. Nuclear power is once again being considered to help meet soaring demand for emissions-free electricity, with plans to bring certain decommissioned nuclear power reactors back online.
In Europe, energy security remains paramount as the region seeks to reduce dependency on external energy sources. The European Union is intensifying its focus on renewables, grid modernisation and energy storage, although regulatory challenges and high costs could temper deal activity.
Like the US, Japan is reviving its nuclear energy ambitions, while increasing its reliance on critical mineral imports to meet growing domestic energy demands.
In China, with the accelerated growth in electric vehicles, we expect to see an uptick in M&A activity as companies adapt to larger scale economy requirements; this will result in an increase in sector consolidation (particularly in the solar sector) and in supporting sectors such as energy storage and critical minerals.
Latin America is emerging as a hot spot for renewable energy investment, with its abundant solar and wind resources attracting global capital. Rising interest in lithium and other critical minerals will also fuel M&A activity in the region’s mining sector, particularly in Chile and Peru.
Africa offers significant opportunities for investors as nations seek to bridge energy access gaps. Investments in natural gas, hydroelectric projects and decentralised renewable systems are set to accelerate, supported by increasing demand from both domestic markets and global commodity buyers.
India’s ambitious decarbonisation targets are reshaping its energy landscape. The country’s growing appetite for renewable infrastructure, alongside strategic investments in coal and critical minerals, underscores the delicate balancing act between energy security and sustainability facing developed and developing countries alike.
We first discussed a ‘reconfiguration imperative’ in our 2024 mid-year outlook and highlighted how megatrends such as climate, technology and demographic shifts are disrupting business models and driving EU&R M&A activity globally.
At the heart of all of this is a massive move towards cross-sector interdependency with companies acquiring, allying and partnering in novel ways and across industries. Companies are doing so to capture market share, drive value, secure critical supply chains and position themselves technologically. The growing importance of such moves will increasingly shape M&A strategies, with particular significance among energy, utilities and resources players, given the central role they are likely to play in many of the transitions ahead.
Dynamic changes to the business landscape are creating new value pools. These are no longer defined by sectors but instead are driven by thematic domains of activity which are a nexus of different sectors. At PwC, we think of this reconfiguration as playing out across six domains: how we fuel, how we move, how we build, how we make, how we feed ourselves and how we care. In each domain, new ecosystems are emerging that not only inform our thinking but underscore the cross-industry alliances and partnerships that are starting to form all over the world.
‘We see significant cross-sector interdependencies emerging as part of the industrial reconfiguration across the energy, utilities, resources and chemicals sectors. Companies' efforts to strategically reposition themselves will create the catalyst for M&A, partnerships and other alliances—in 2025 and for many years to come.’
Greg Oberti,Energy Transition & Utilities Deals Leader, Partner, PwC CanadaIn an EU&R context, we see examples of this cross-sector interdependency in the ‘how we move’ domain, among others. Companies will engage in M&A as they look to reconfigure to strategically gain access to raw materials, obtain adjacent technologies or expertise, shore up supply chains and secure energy needs. Thus, mining companies will partner with, or even become acquisition targets of, automotive players to secure lithium supplies for electric vehicle battery production, as illustrated by Volkswagen’s December 2024 acquisition of 9.9% of lithium developer Patriot Battery. We expect further deals activity related to critical minerals and focused on other areas such as emergent technology platforms centered on companies aiming to solidify their strategic position in an increasingly multipolar geopolitical context.
We also see EU&R applicable examples in other domains, including, “how we build” and “how we make”. For example, we expect EU&R companies to connect with construction firms or manufacturing companies. These types of connections could play out in a number of ways and act as a conduit for companies to collaborate across industries to achieve scale, grow revenue streams and secure supply chains. In 2024, we saw the continuation and acceleration of this trend; for example, in the “how we build” domain, BP signed notable global alliances in June 2024 with Worley, an Australian engineering services company, and in August 2024 with Wood, a global engineering consulting company, to drive efficiency, continuous improvement and enhanced site development. In the “how we make” domain, Canadian company Bruce Power's March 2024 alliance with GE Vernova's steam power business is intended to better secure its critical supply chain and drive efficiency across its operations.
Source: PwC’s 28th Annual Global CEO Survey, January 2025
The EU&R sectors are at the heart of efforts to balance sustainability, reliability and growth. We see four key themes shaping M&A in this dynamic environment in 2025.
Energy security remains a key driver of M&A as countries prioritise reliable and diversified energy supplies amid geopolitical tensions and shifting alliances. Under the new US administration, US policy will likely favour fossil fuel investments to strengthen domestic energy independence. Europe will continue pushing to reduce reliance on imports, particularly from Russia. These dynamics are fostering cross-border deals in natural gas, nuclear and critical infrastructure assets.
The global shift toward decarbonisation will spur M&A in areas including battery storage and critical minerals. The rising demand for lithium, cobalt and nickel—which are essential for energy storage and electric vehicle production—is driving mining deals, particularly in Latin America, Australia and Africa. M&A in renewable energy is also expected to remain active, with companies acquiring renewable assets and investing in infrastructure to support green hydrogen, electric vehicles and grid modernisation. Examples include KKR’s takeover of Encavis, a German renewable energy platform and independent power producer, and Iberdrola’s acquisition of Electricity North West, a UK energy network operator.
The rapid adoption of AI, cloud computing and digital transformation is creating unprecedented demand for energy-intensive data centers. This is leading to novel partnerships and acquisitions to secure power supply for these facilities, such as the AI partnership announced in September 2024 among BlackRock, Global Infrastructure Partners, Microsoft and a leading AI investor from the Middle East to invest in data centres and supporting power infrastructure. Investments in smart grids and energy management systems are also rising to enhance efficiency and resilience.
The lines between energy, utilities and resources will continue to blur as companies seek synergies to address evolving energy needs. We see this with technology firms investing in renewables and energy storage for data centers, while traditional energy companies are acquiring digital solutions to enhance operations. Likewise, industrial players are teaming up with energy firms to secure reliable power to decarbonise manufacturing. This convergence will fuel innovative partnerships, such as the formation in October 2024 of an industrial association by a group of German companies to accelerate the commercialisation of fusion energy technology. M&A activity will continue to cut across traditional industry boundaries.
Source: PwC’s 28th Annual Global CEO Survey, January 2025
Although global EU&R deal volumes decreased by 8% between 2023 and 2024, the industry performed better than the overall global M&A markets, which saw an 18% decline in deal volumes over the same period. Deal values decreased by 23% between 2023 and 2024. This was primarily due to fewer megadeals (deals greater than $5bn): ten such megadeals were announced in 2024, compared with 16 in the prior year. Furthermore, in 2023, two deals worth more than $50bn each were announced: Exxon’s acquisition of Pioneer Natural Resources and Chevron’s proposed acquisition of Hess. The largest EU&R deal announced in 2024 was the $26bn merger between Diamondback Energy and Endeavor Energy Resources.
Global M&A activity in the energy, utilities, mining and chemicals sectors is expected to gain momentum in 2025, driven by the energy transition, geopolitical stabilisation and technological advancements. Investments in renewable energy, grid modernisation and critical minerals for clean energy technologies will dominate. Fossil fuel assets may see consolidation as traditional energy players rebalance portfolios. Emerging markets will attract interest because of resource availability and supportive policies. Private equity and sovereign funds will remain active, while strategic buyers focus on climate-related acquisitions.
Going forward, we also see cross-sector interdependencies growing in importance. With the energy, utilities and resources sectors being central to how these interdependencies will play out, this is an area that savvy executives and dealmakers will need to consider as they develop their M&A strategies in response to the reconfiguration imperative facing their companies.
Matthew Alabaster
Strategy&, UK Energy, Utilities & Resources Deals Leader, Partner, PwC United Kingdom