PwC: Deal Value for Utility Sector Slows Down But Still Nearly $29 Billion in 2Q
The news that Great Plains Energy will acquire Westar Energy in a $12.2 billion combination dominated the merger sector of the electric utility industry in 2016’s second quarter, according to accounting and consulting firm PwC’s report on M&A activity for those three months.
All in all, deal value for power and utility companies totaled $28.3 billion, eight times higher than the same period in 2015 but 32 percent lower than the $41.4 billion in M&A activity in the first quarter, according to PwC (formerly PricewaterhouseCoopers).
“For deals over $50 million, Q2 2016, represented another robust quarter for deal activity in the power and utilities sector,” reads the introduction in ‘PwC Deals: North American Power & Utilities Deal Insights.’ “Deal activity in the quarter was driven by large corporate deals for electric utility, renewable and independent power producers, among others. “
Only four mega deals—M&As worth more than $1 billion—were announced in 2016’s second quarter. After Great Plains-Westar, those included Tesla Motors’ nearly $6.6 billion unsolicited bid for PV panel producer SolarCity announced last month; equity fund Riverstone Holdings’ $5.09 billion offer for a 65-percent stake in Talen Energy Corp.; and Singapore-based GIC’s move to acquire a 19.9 percent piece of Michigan-based transmission firm ITC Holdings from Fortis for $1.23 billion.
Down the list was a series of sub-$1 billion deals involving Southern Co., Florida Power & Light and Dynegy, among other buyers. Completed mergers, such as Exelon’s $8 billion acquisition of eastern utility Pepco Holdings, were not included in the PwC report, nor was NextEra Energy’s recently announced $18.4 billion agreement to buy Oncor Electric Delivery from bankrupt parent Energy Future Holdings.