According to PwC U.S., North American power and utilities
mergers and acquisitions (M&A) declined in the first quarter
of 2012 due to uncertainty over the economy.
Slow economic growth; natural gas prices at a 10-year
low; ongoing changes to environmental proposals; and the
regulatory process of recently announced transactions all
contributed to the downturn. Major deals continue to work
through the approval process today.
In the first three months of 2012, there were a total of
five announced deals compared to 14 deals in the first
quarter of 2011. The average value of announced deals
greater than $50 million decreased to $679 million from $2.2
billion during the same three month period in 2011,
primarily due to one large strategic deal in the first
quarter of 2011.
"While transactions are still top of mind for power and
utilities executives across the country, the industry
continued to watch the regulatory approval progress of
announced deals. Additionally, the slow economic recovery,
lack of load growth, pending carbon legislation and the
price of natural gas added to the hesitancy of companies to
pursue their growth strategies through M&A," said John
McConomy, PwC's US Power and Utilities Transaction Services
Leader. "As the 2010 and 2011 announced corporate
transactions draw to conclusion, the market should expect
renewed corporate merger activity, as well as interest from
infrastructure funds in pure-play regulated utilities."
Wind project development will also see a slowdown as
production tax credits (PTC) expire, according to PwC.
For more:
North American power deals: Q1 2012 mergers &
acquisitions repor
This report presents an analysis of North
American merger and acquisition activity in the power and
utilities industry.
Q1 2012 key trends
- In Q1 2012, the number of announced deals greater
than $50 million remained flat with Q4 2011 at five
deals. However, the total deal value decreased 92
percent from Q4 2011 due to the Kinder Morgan / El Paso
Corp $36 billion deal in the prior quarter.
- Deal volume in the first quarter of 2012 was up
slightly over the previous quarter, putting the
quarter-over-quarter deal volume at 31 announced deals,
an increase of 3 percent.
- Strategic investors dominated investor group with 60
percent while financial buyers posted 40 percent of all
acquisitions greater than $50 million.
http://links.mkt1985.com/ctt?kn=103&ms=NDA0MDQzMQS2&r=MjQ4Njc1MTkzNDMS1&b=0&j=MTI0MTg4NDYzS0&mt=1&rt=0
- see the
report