AES Corp.'s immediate need for equity capital, combined with ongoing challenges to its public structure that included US regulatory, affordability and contracting risks, drove the utility and renewables company to pursue the $10.7 billion take-private acquisition announced in March.
AES issued a preliminary DEF 14A filing with the SEC on May 4 ahead of an upcoming shareholder meeting to vote on the transaction with EQT AB and BlackRock Inc.'s Global Infrastructure Management LLC, with the Qatar Investment Authority and California Public Employees' Retirement System as co-underwriters.
The filing revealed that AES would have needed "approximately $2 billion from 2026 to 2030." A presentation accompanying the deal's announcement on March 2 only cited "substantial" capital requirements "possibly as soon as 2026."
When the deal was announced, AES also identified rising equipment prices and the "future expiration of tax credits" as incentives to go private, in addition to high leverage and a "disparate geographic focus" that industry analysts had repeatedly noted. Along with operations in the US and Central and South America, AES has holdings in places including Bulgaria, Jordan and Vietnam.
The May 4 filing, however, added that the Trump administration's efforts to impede renewables permitting, affordability concerns exacerbating US utility regulatory risk and the "ability to maintain a leading position with big tech customers" were also obstacles to AES remaining a public company.
Initial discussions
AES first began discussions about "potential strategic partnerships and investment opportunities" with entities including a sovereign wealth fund and a publicly traded international energy holding company in February 2024, and it started speaking with Global Infrastructure Management, known as Global Infrastructure Partners, the following month, according to the filing.
AES first approached the infrastructure giant about a potential take-private deal in June 2024 but discontinued all discussions in November 2024 "in light of other priorities and external conditions, including renewable policy uncertainties following the US presidential and congressional elections and a focus on execution of a substantial internal restructuring within the company," the filing said.
After President Donald Trump assumed office in January 2025, the sovereign wealth fund, a publicly traded owner of renewable power and utility assets, and EQT reached out to AES about a potential transaction. AES turned EQT away "since three highly credible bidder groups were already active in the process."
At the end of February 2025, meanwhile, AES outlined a restructuring plan aimed at cutting costs and focusing on fewer but larger renewables projects after its stock price plummeted on investor concerns that federal clean energy tax credits could be on the chopping block.
Price disagreements
Only Global Infrastructure Partners (GIP) submitted a nonbinding initial indication of interest in June 2025, offering $15 for each share of AES common stock, weeks before Trump signed the One Big Beautiful Bill Act (OBBBA), legislation that slashed renewable energy tax credits.
"Not surprising to see relatively limited interest and only one bid in the first round given complexity of the transaction," analysts at Jefferies wrote in a May 7 report.
The following month, AES shares spiked following a report that the company was exploring options with entities including Brookfield Asset Management Ltd. and GIP, after which EQT, a large private equity fund and a non-US pension fund inquired about the potential transaction.
AES permitted EQT, which was interested in a take-private deal, to enter the process, but in the meantime "concluded to move forward with round two of the process with GIP" in late June.
Still, EQT submitted a nonbinding indication of interest in September to buy all AES common stock for $14 to $15 per unit. AES, however, did not agree to allow EQT "to reach out to the certain additional identified potential co-investors," according to the filing.
Later in September, EQT upped its offer to $15 per share, but AES again denied the Swedish private equity firm permission to speak to those potential co-investors. EQT ultimately withdrew from the process Sept. 30, 2025, the same day the Financial Times reported that GIP was in advanced talks to acquire AES for $38 billion.
After the pension fund "unexpectedly" withdrew from the proposed transaction, AES agreed that GIP could approach EQT to address "an equity funding shortfall."
Right number
GIP in late November 2025 verbally offered to buy AES for $14.25 per share, explaining that the price had decreased "in part due to changes in certain tax assumptions and renewables operating performance."
"A buyer attempting to lower the price in a process is typical," Jefferies noted. "Proposed price reduction despite OBBBA final version more concerning and indicative of lower value for renewable assets than what we probably appreciated."
AES responded that the bid was too low, and GIP offered to pay $14.75 per share "as a result of the company's feedback," the filing said.
The consortium submitted a written proposal for the same amount Jan. 20 but revised the purchase price to $15 per share following a Feb. 2 report, which sent AES stock higher again, that a transaction with GIP and EQT could be finalized within weeks. The deal was signed March 1 and announced publicly the next day.
The take-private deal's completion is subject to approvals by the Federal Energy Regulatory Commission and a number of state utility regulators. AES' US holdings include two regulated electric utilities: AES Indiana, in and around Indianapolis, and The Dayton Power and Light Co., which does business as AES Ohio.
If the merger still lacks regulatory approvals by June 1, 2027, either party can terminate the transaction after two successive three-month extension periods, according to a March 2 SEC filing. The consortium would be required to pay AES a termination fee of $100 million or approximately $588 million, depending on specific circumstances, while AES would have to pay the consortium approximately $321 million.
