M&A In The Renewable Energy Sector: Adapting To A Changing Landscape
With increasing stress on achieving carbon neutrality, M&A in the renewable energy sector is quickly emerging as a solution. Some of the biggest investment opportunities worth billions of dollars are now generating investor interest. Larger corporations are keen on acquiring small startups and mid-size companies to leverage tech innovations. That’s how they hope to gain that edge over the competition, scale rapidly, and acquire a foothold in new markets.
With increasing stress on achieving carbon neutrality, M&A in the renewable energy sector is quickly emerging as a solution. Some of the biggest investment opportunities worth billions of dollars are now generating investor interest.
Larger corporations are keen on acquiring small startups and mid-size companies to leverage tech innovations. That’s how they hope to gain that edge over the competition, scale rapidly, and acquire a foothold in new markets.
Companies that are already profitable with well-known brand names consistently look for strategic acquisitions that will help them get new projects. Taking advantage of current favorable market conditions where the trend is leaning toward sustainable energy sources is the key.
Incidentally, the renewable energy sector is a part of a larger energy vertical that includes liquefied natural gas, and nuclear energy. Upstream, midstream, and downstream oil and gas, chemicals and petrochemicals, and utilities are also attracting interest from investors and private equity.
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Let’s Explore Some Statistics
M&A in the renewable energy sector has been ramping up since 2010. Close to 500 deals valued at almost
71B took place in the O&G industry between 2012 and 2022. The objective was to acquire clean energy assets and build a green energy presence.
Accordingly, acquisitions outpaced asset sales by $43 billion. Interestingly, 44% of the M&A deals since 2010 have focused on solar and wind assets.
This trend has been continuing in more recent times, with 26 deals transacted from 2020 to 2022. M&A deals in clean energy were valued at $32B in 2022. This figure makes up 15% of the total deal values in the O&G sector.
In recent times, biofuel-related assets have been gaining traction in investor interest, resulting in
