US power sector M&A deal number, values decline in Q3

The number and total value of merger and acquisition deals in the US power sector declined in the third quarter of 2023, compared with the prior-year period.

The aggregate value of corporate-level M&A deals in the US electric, multi-utility and independent power producer sector shrank almost 77% year over year to $770 million from $3.34 billion, with the number of such deals dropping to eight from 21 in the third quarter of 2022, according to an analysis of S&P Global Market Intelligence data.

For the first three quarters of 2023, the combined value of corporate-level M&A deals came in at $6.8 billion through 28 transactions, a decrease from the $7.33 billion total through 42 transactions in the first three quarters of 2022.

Asset-level M&A deals announced in the quarter shrank to 20, from 33 in the previous quarter, also representing a decrease from the 41 asset deals announced in the third quarter of 2022. The combined value of those deals plunged by over 50% to $890 million in the most recent quarter, from $1.80 billion a year earlier.

For the first three quarters, the aggregate value of individual asset deals surged by almost 130% year over year to $8.83 billion from $3.84 billion. The number of deals dropped to 91, compared with 129 in the first three quarters of 2022.

Market Intelligence calculates the deal's transaction value from the amount paid for equity and in cash plus the value of assumed current liabilities, net of current assets.

Whole company, minority deals

The largest corporate-level M&A deal of the quarter was by Spanish energy company Repsol SA, which agreed to acquire US renewable energy platform ConnectGen LLC from Quantum Capital Group LLC for $768 million.

ConnectGen is a Houston-based renewables developer with a development pipeline that includes 20,000 MW of onshore wind, solar and energy storage projects at different levels of maturity across the US.

The transaction would mark Repsol's entry into the US onshore wind industry, which the company described as "one of the largest and highest growth potential markets in the world." In the US, Repsol is looking to have an installed capacity of 2,000 MW by 2025 and more than 8,000 MW by 2030.

Asset deals

The largest asset-level transaction during the quarter was Thailand-based Banpu Public Co. Ltd.'s $460 million acquisition of the 755-MW Temple II Plant from CXA Temple 2 LLC. Temple II is an operating combined-cycle facility in Texas.

Other notable asset deals included Duke Energy Corp.'s sale of its commercial distributed generation business to an affiliate of ArcLight Capital Partners LLC in a deal with an enterprise value of about $364 million, including a noncontrolling tax equity interest.

Duke planned to use the sale proceeds to strengthen its balance sheet and avoid additional holding company debt issuances, allowing focus on the growth of its regulated businesses. The sale is expected to close by the end of 2023.

– Use our M&A Replay page to view more data on other M&A deals. – Use our Transactions Statistics page to run a custom screen of M&A transactions.

S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.