Overall, deal activity in the U.S./Canada power and utilities sector in the fourth quarter of 2016 showed decreases over both the previous quarter and the fourth quarter of 2015. However, generation asset deals – renewable energy, fossil and nuclear – contributed the highest share in both deal volume and deal value, according to a new report from PwC.
In the power and utilities sector during the quarter, 10 deals worth $8.8 billion were announced, the report says.
Generation asset deals contributed 70% and 59% in deal volume and deal value, respectively, for the quarter. This includes the NRG Energy’s purchase of 1.5 GW of SunEdison’s renewable energy portfolio; this transaction was valued at $183 million.
However, of all the power and utilities transactions for the fourth quarter, NextEra Energy’s acquisition of the remaining 20% stake in Oncor Electric Delivery Co. LLC – by acquiring Texas Transmission Holdings Corp. for $2.4 billion – accounted for 27% of total deal values.
Though the quarter was the lowest of the year on a deal volume and deal value basis, the report says, 2016 was still proven to be a “robust deal market” for power and utilities: In total, there were 71 total deals worth $156.6 billion. In addition, year over year, 2016 witnessed an increase in total deals – in both volume and value – by 51% and 134%, respectively.
“As we look forward to 2017, we expect infrastructure and generation asset deals to continue to be a theme, with deal makers keeping a close eye on rising interest rates, potential tax reform and environmental policies,” comments Jeremy Fago, leader of PwC’s U.S. power and utilities deals.
The full report, “North American Power & Utilities Deals Insights Q4 2016,” can be read here.
