Global

Details

  • Service: Advisory
  • Industry: Energy & Natural Resources, Power & Utilities
  • Type: Business and industry issue
  • Date: 5/14/2012

Green Power 2012: The KPMG renewable energy M&A report 

This report is KPMG’s annual review of M&A activity within the renewable energy sector; it takes a look at the changes and trends in the sector to provide insight on where the market is heading.

2011 represented an exciting year in the ongoing development of the renewable energy sector. Globally, a total of 591 renewable energy M&A deals valued at US$51.2bn were announced during 2011, a significant increase on the 431 deals announced in 2010. In Q1 2012, 150 M&A transactions totaling US$9bn were announced in Q1 2012, a slight increase from the US$8.75bn value of 150 transactions in Q4 2011. Despite great uncertainty across key renewable energy markets, respondents remain optimistic that renewable energy deal flow will remain robust in the next 5 years.


2011 yet again represented an exciting year in the ongoing development of the renewable energy industry. The two dominant sectors continue to be wind and solar PV, which both experienced record levels of installations. With 42GW of new wind and 25GW of solar PV, more than US$100bn of capital was deployed in these technologies alone, across an ever growing number of countries, each with their own individual market characteristics.


Overall, renewable energy M&A activity shifted up a number of gears in 2011. A total of 591 deals valued at US$51.2bn were announced during the year, a significant increase on the 431 transactions totalling US$24.2bn recorded in 2010. A surge in wind and solar PV M&A activity, which increased 132% and 37% respectively, was the principal driver. As predicted in our 2011 report, last year was also notable for a substantial rise (300%) in the total value of M&A transactions in the biomass sector. Alongside increased transaction activity, the average deal size expanded by over 50% to US$86.6m in 2011, underlining the growing maturity of the sector, although the total number of super-size billion dollar plus deals declined.


By the end of 2011 the market was beginning to show signs of cooling. In the final quarter, the value of announced M&A deals declined 44% to US$8.75bn by reference to 3Q 2011 and the number of deals slipped from 164 to 150. In parallel, the renewable energy project finance environment deteriorated significantly as a direct result of the Eurozone sovereign debt crisis. In 4Q 2011 only US$33.4bn was allocated to renewable energy projects globally, a 39% decrease on the previous quarter and 13% below the quarterly average during the last three years.


Activity has not picked up in the beginning of 2012. Some 150 M&A transactions totalling US$9bn were announced in 1Q 2012, only a slight increase on the previous quarter. That being said, the table of the largest transactions below (with announced values) highlights the sector’s appeal to a broad range of acquirers, including utilities, financial investors and corporates around the world.

 

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