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2023 power, utilities, and renewables M&A outlook

A potential surge of deal-making activity illuminates growth opportunities

Given the backdrop of political uncertainty and high inflation and interest rates, will mergers and acquisitions (M&A) activity in the power, utilities, and renewables sector accelerate or ease up over the next 18 months? And what’s in store for the sector overall? Gain insight into these questions by exploring our annual power and utilities M&A outlook and recharge your deal-making strategy for the year ahead.

Recent trends and current macro environment

M&A activity in the power and utilities sector fell in 2022 coming off of the 2021 COVID rebound, closing 2022 just slightly above 2020 levels. This is primarily due to the rising cost of capital, high valuations, high inflation, and overall risk aversion during an uncertain political environment, with midterm elections allowing for widely different outcomes on configuration and agenda of the US Congress.

The market has seen a considerable decline in both deal volume and deal value in 2022, for both strategic and financial investors. The strategic deal value for 2022 was $32.3 billion over 224 deals compared to the 2021 value of $63.4 billion over 204 deals. This represents a major 49.1% drop in deal value and a 9.8% increase in deal volume from 2021 to 2022. In other words, on the aggregate level, 2022 saw more deals, but they were much smaller in proportion to the deals seen in 2021.

Looking for a deeper dive into deal volume and finance? Download the complete power, utilities, and renewables M&A outlook.

2023 power, utilities, and renewables M&A outlook

Power players could amp up deal-making activity

Despite macroeconomic headwinds with a high interest rate environment and the potential for a recession in the coming months, we expect deal activity in the power and utilities sector to accelerate in 2023 due to the ongoing favorable regulatory environment and protection of US energy interests in the face of ongoing geopolitical instability in Eastern Europe and Russia.

We expect that much of the undeployed capital from 2022 associated with uncertain political perspective will now be invested as the sector encounters a legislative agenda favoring the energy transition. Of the five key trends highlighted in our 2023 power and utilities industry outlook, three are expected to be drivers of M&A activity, and two are expected to drive restructuring activity.

“Deals with clear accretive and strategic value should be sought, with proactive commercial, financial, and environmental, social, and governance (ESG) diligence, to maximize financial returns.”
Download the 2023 power, utilities, and renewables M&A outlook

Five trends, five impacts so you can move forward confidently

Help your company navigate power and utilities M&A with five trends you should know paired with five expected impacts.

Recharge your deal-making strategy for the future of energy

If you’d like to talk about elevating your power and utilities M&A strategy and how your organization can thrive in the pivot toward clean energy, let’s set up a conversation.

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