Throughout 2010, global renewable energy M&A deals surged to an increase of over 70 percent on the 260 deals completed in 2009. This trend has continued in 2011, with a record 141 renewable M&A deals totalling US$11.2bn being announced in Q1 2011.
Andy Cox, energy partner at KPMG’s UK firm, commented:
“The renewable M&A market has really picked up in 2011, with a substantial jump in global activity which looks set to continue. In particular, our survey has shown that deals in the US$50m - US$0.5bn bracket are likely to see the greatest increase whilst, overall, higher competition for targets is expected to push up global valuations driven by better financing conditions, a post-Fukushima reinvigoration of sentiment and soaring oil prices as well as some new acquirers, including Asian manufacturers and potentially pension funds.”
The research revealed that the majority of respondents expected the global renewable energy market to be driven by new investors from China and North America. Interestingly, a heavy bias towards local investment was also revealed, with more than double the number of Asian respondents intending to invest in China and India than those intending to invest in European countries.
The research also highlighted the continued importance of Government incentives and stimuli, which continue to be a big draw for investors, particularly in Western Europe where recent changes have resulted in some uncertainty in the market.
This report, written in collaboration with VB/Research, is based on a survey of 500 senior executives from across the global energy industry and in-depth interviews with key organisations involved with the renewables energy sector.