Clean energy momentum expected to shape M&A landscape in the UK and Europe into 2024

Powering change: A 2024 surge in Energy, Utilities & Resources deals across the UK and Europe is anticipated, despite a slow third quarter in 2023.

By AnsaradaThu Dec 14 2023Mergers and acquisitions, Due diligence and dealmaking, Advisors, Industry news and trends, CEO-CFO, Environmental Social and Governance

New Energy M&A deals commencing in Q3 were down 29% QoQ in the UK and Ireland, and down 75% in Europe. According to GlobalData Power Intelligence, Q3 2023 saw 32 M&A deals completed in the British power industry worth $3.3 billion, compared to 46 in the previous quarter. In Europe, the number of closed Energy M&A deals dropped from 186 to 148 for a total value of $5.6 billion. The largest deal across both regions was the $1.5 billion acquisition of Breesea, Sonningmay Wind, and Soundmark Wind by Diamond Transmission Partners Hornsea Two.
Despite the quarterly downfall, a surge is still anticipated. Achieving the energy transition will require substantial investments from both public and private sectors in sustainable energy generation, transmission, and storage, which will drive M&A activity in the sector.
Currently, infrastructure fundraising has reached unprecedented levels, with the amount of available capital for funds in this domain more than tripling over the past decade. Despite some recent adjustments in renewables-focused funds, substantial opportunities lie ahead as diverse stakeholders prioritise energy sustainability and resilience.
This shift is already being seen in the Utilities sector, with new Utilities M&A deals commencing in Q3 up 10% QoQ in Europe and 73% QoQ in the UK&I. As the energy transition gains momentum, ensuring energy security and reliability becomes paramount. Utilities and infrastructure will undergo substantial transformations in the upcoming years, particularly as ESG considerations and sustainability goals become more prominent.
While new Materials M&A deals commencing were down 25% QoQ in Europe and down 38% QoQ in the UK, significant activity is expected into 2024 as the clean energy transition motivates further industry consolidation.
Shifting demand for specific resources that support clean technologies – such as lithium, nickel and copper – and favourable commodity prices in the sectors of metals, mining, and agricultural products will continue to drive high-value M&A transactions. One notable example is the $31.4 billion bid by Switzerland's Glencore to acquire Teck Resources’ metallurgical coal assets.
PwC’s Global M&A Industry Trends report reveals that the collective EU&R sectors secured the third-highest deal value in the UK in H1 2023, with £9.9 billion of M&A activity, indicating that dealmaking in this space remains robust.

See what else is driving M&A in the UK, Ireland & Europe

Get a sneak peek into the anticipated trends of 2024 as we deep-dive into the M&A landscape across the UK&I and Europe in our latest Deal Indicators report.
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