The market capitalization of large electric and multi-utilities companies in Europe increased by about €74.1 billion in the third quarter.
For the quarter ended Sept. 30, the market cap of the top 20 European utilities totaled €500.83 billion, with five companies recording double-digit gains quarter over quarter, according to an S&P Global Market Intelligence analysis.
During the quarter, several major European utilities continued to build out dominance in the burgeoning U.S. offshore wind industry, and the EU dedicated €240 billion of its €750 billion Next Generation EU recovery fund to green projects.
However, six European utilities are still nursing double-digit percentage losses relative to the end of the year-ago third quarter, driven largely by the impacts of the coronavirus pandemic. For example, France's Engie SA saw its market cap rise 3.8% quarter over quarter to €27.56 billion, but year over year, its valuation is down 23.7%, causing its ranking to fall from the third spot to the sixth.
Italy's Enel SpA and Spain's Iberdrola SA remained by far the largest European utilities by market cap, retaining their first and second spots. This comes despite a 3.4% hit to Enel's market cap quarter over quarter to €75.40 billion. Iberdrola saw its valuation slip 1.2% to €65.58 billion as of Sept. 30. Ørsted A/S moved up to the third spot from fourth, with its valuation improving 37.5% year over year to €49.38 billion.
French utility Suez SA recorded the largest quarter-over-quarter percentage increase within the peer group. Its market cap surged 51.5% to €9.88 billion as of Sept. 30. The utility improved its ranking on the list by two spots to 18th. Suez was followed by Austrian utility Verbund AG with a 17.1% increase in its valuation to €16.22 billion at the end of the third quarter. Year over year, Verbund saw its market cap dip 7%, but the company maintained its position at the 12th spot.
During the quarter, Veolia Environnement SA made an unsolicited offer of €2.91 billion to Engie for its 29.9% stake in Suez. Engie Chairman Jean-Pierre Clamadieu deemed the proposal too low, and the Suez board of directors characterized it as a "hostile approach." Veolia improved its proposal shortly after Engie declared the previous offer insufficient. Other notable deal activity on the continent included Verbund's binding offer to acquire a 51% stake in Gas Connect Austria GmbH for €271 million, which was accepted by OMV AG in September.
Germany's EnBW Energie Baden-Württemberg AG recorded the largest increase, of 38.5%, year over year in its valuation, to €14.63 billion, finishing the quarter at 14th, up from 18th a year earlier.
The S&P Europe BMI Utilities index rose 8.2% in the third quarter, compared to the S&P 500 index, which was up 13%, and the STOXX Europe 600 index, which dropped 8.2%.