Despite the difficult conditions of the last 18 months, renewable energy dealmaking has remained remarkably robust, according to a survey commissioned by professional services firm Rödl & Partner and carried out by mergermarket.
The overview of the global renewable energy M&A market found that in 2009 there were 228 deals announced worth a collective EUR49.7bn – a deal volume mirroring the level of activity witnessed at the height of the M&A boom in 2007 – and that the first two quarters of 2010 have also seen brisk deal flow.
The survey, which was conducted in May 2010, garnered the opinions of 100 senior M&A professionals who are directly involved in the renewable energy sector and asked their opinions on the key challenges and opportunities that exist in the market.
Seventy eight per cent of respondents expect M&A activity to increase over the coming 12 months.
Seventy per cent of survey respondents note that accessing finance has been the most significant obstacle to dealmaking in the space.
Forty one per cent of respondents expect utility companies to be very active acquirers of assets going forward, as renewables drive to meet parity with traditional forms of energy, suggesting that buy-side interest is no longer dominated by niche investors.
Sixty seven per cent of respondents expect private equity investment in the sector to increase in the coming months.
The geographic breakdown of activity shows that North American and European markets continue to dominate, accounting for 74 per cent of overall deal flow since the beginning of 2005. Nevertheless, there is huge potential in emerging markets and countries in South America and Asia Pacific are beginning to attract a degree of investment.
Marcus Felsner, partner of Rödl & Partner, says: “The renewables industry has proven to be a major driver for global economic growth. The increase in dealmaking across the globe is a solid indicator for the continuation of high transaction activity in the coming years. Even in the light of reduced feed-in-tariffs in important markets like France, Germany, Italy and Spain, investments in renewable energy continue to be highly attractive.”
