Although our current economic and geopolitical pressures have dampened wheeling and dealing of acquisitions and mergers, our electrical industry has seen a resurgence in deal activity in the latter part of 2022, and with passage of the IRA (Inflation Reduction Act) that trend has accelerated into 2023.
The IRA passage seemed to double down on support and emphasis of environmental, social, and governance (ESG) strategies, which in turn has stimulated broad investor interest in our industry’s asset classes, including renewables. In addition, investors flight-to-quality behavior, or desire to move into less risky assets, also contributed to the increased interest. However, the utility industry vows to stay together till debt do us part.
Below are the ten top utility deals of 2022 into 2023.
- South Jersey Industries, Inc.
Acquired by J.P. Morgan, $7.8 billion
- Con Edison Clean Energy Businesses, Inc.
Acquired by RWE Renewables Americas, LLC, $6.8 billion
- Archaea Energy Inc.
Acquired by BP p.l.c., $4.8 billion
- Great River Hydro, LLC
Acquired by Hydro-Quebec International, Inc., $2 billion
- 50% stake in Clearway Energy Group
Acquired by TotalEnergies SE, $1.6 billion
- Portfolio of landfill gas-to-electric facilities
Acquired by NextEra Energy Resources, LLC, $1.1 billion
- Scout Clean Energy, LLC
Acquired by Brookfield Asset Management Inc., $1 billion
- NEP Renewables, LLC
Acquired by NextEra Energy Partners, LP, $9 million
- Midland Cogeneration
Acquired by Capital Power Corp and Manulife, $9 million
- 50% interest in 2.5 GW Renewable Portfolio
Acquired by Ontario Teachers’ Pension Plan Board, $8 million
For the near future, it seems the focus is still on ESG efforts, as indicated by recent deal activity related to climate change, social justice equality, and diversity. Today, investors and stakeholders see social good, and profitability as intertwined and the companies they perceive doing this, is what they pursue. Therefore, more companies will continue to evolve ways in which they can pursue ESG initiatives, optimize and refine their ESG reporting, and embrace purpose-led strategies.