Global Utilities: The EU will re-emerge as the world's utility M&A hotspot

Table of Contents

• DATAMONITOR VIEW
  • PREDICTION
  • Global market liberalization in gas and power continues apace, as investment activity is set to peak in the US and EU.
  • SUMMARY
  • Several large markets are set for retail market opening in 2007 while liberalization continues in most developing markets, even if only in the gas and power generation sectors. The nature of M&A activity will shift, as high energy prices are viewed as permanent market features and asset swaps are increasingly relied upon for structural hedging. The EU will re-emerge as the world's utility M&A hotspot.
  • METHODOLOGY
• ANALYSIS
  • Movement towards full retail competition in major power markets will continue to be patchwork, the EU and Japan excepted
  • Utility M&A activity will track market liberalization locations and timetables
  • In certain high-growth countries market reforms will proceed, but will be limited to exploration/production and power generation
  • India and China are two of the fastest growing markets: however only India will present investment opportunities across the energy value chain
  • In 2007 global market consensus on the permanence of high energy prices will ease acquisition finance and positively influence M&A activity
  • Europe will regain center-stage as the global gas and power M&A hotspot
  • M&A Deals in the Global Power Sector
  • Access to networks is driving M&A activity in spite of liberalization, but the role of asset swaps will increase
  • The prevalence of asset swaps will cause deal volumes to plateau
• APPENDIX
  • Ask the analyst
  • List of Figures
    • Figure 1: M&A Deals in the Global Power Sector
    • Figure 2: M&A Deals in the Global Oil and Gas pipeline sector