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A breakdown of key M&A activity in the renewable energy space last year.
Though many predicted that cleantech would meet its demise in 2014, M&A activity in the renewable energy sector suggests otherwise.
In its “Power & Renewables Deals: 2015 Outlook and 2014 Review” report, PwC states that “global megatrends such as technological shifts, policy moves to encourage clean energy and the changing world economic power balance are becoming increasingly reflected in the power sector M&A activity.” That certainly seems to be true, as there were five important renewable energy deals in 2014.
5 top renewable energy deals of 2014
The largest renewable energy deal of 2014 occurred on November 17, when First Wind Holdings was acquired by SunEdison (NYSE:SUNE) and TerraForm Power (NASDAQ:TERP) for $2.372 billion. The second-largest was a $1.587-billion deal between India’s Himachal Baspa Power and JSW Steel (NSE:JSWSTEEL) in September; in that case, the former was acquired by the latter.
The third-largest deal came on November 26, when Wuhan Kaidi Electric Power (SZSE:000939) acquired Power Station, Kaidi Sunshine Bio-energy Investment and Wuhan Kaidi Green Energy Development & Operation for $1.116 billion.
The two deals rounding out the top five occurred between the UK and Canada, and Brazil and Canada. On January 31, Canadian pension fund Caisse de dépôt et placement du Québec acquired a stake in the London Array 1 windfarm for $1,064 million. Finally, on November 20, Canada’s Brookfield Renewable Energy Partners (TSX:BEP.UN,NYSE:BEP) acquired a mulit-technology renewable energy portfolio from Energisa (BVMF:ENGI3), a Brazilian company, for $930 million.
Major deals in regional context
India and China led the Asia Pacific region’s deals in the renewable energy sector in 2014, with both India and China seeing billion-plus deals. These deals, which were for hydropower and biomass-generation assets, illustrate the exciting developments taking place in these growing markets.
Meanwhile, renewable energy deal activity dropped in Europe last year. PwC states that the number of deals for European targets decreased by 7 percent compared to the previous year, while target deal value fell even more, by 13 percent.
View forward for cleantech investors
PwC anticipates that the renewable energy sector will be the site of further deals in 2015. The firm states in its report, “the desire across Europe to recycle capital from operating wind and solar portfolios to new opportunities and the need to find co-investment for the significant sums involved in offshore wind construction means that many of the deals are likely to see both minority and majority equity stakes transacted rather than an outright change in ownership.”
Cleantech investors are no doubt looking forward to seeing how 2015 turns out in terms of renewable energy deals.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.
