M&A activity in the hydro energy market witnessed an increasing trend in deal making activity in 2010. Overall, 63 deals worth $39.1B were recorded in YTD 2010. On a quarter-on-quarter basis, the number of deals in the hydro energy market increased from 17 M&A deals in Q1 2010 to 22 deals in Q2 2010 to 23 deals in Q3 2010. Deal value also increased substantially from $1.1B in Q2 2010 to $28.3B in Q3 2010. The deal value in 2010 was mainly bolstered by two merger deals worth $30B.

The key deals were GDF Suez’s $21.5B merger agreement with International Power; and FirstEnergy’s agreement to merge with Allegheny Energy, an integrated energy company, valued at $8.5B.

Asia Pacific and North America, primarily China and the US, led the M&A activity in terms of the number of deals in the hydro energy market in 2010. China and the US took the top spot globally for the overall hydro M&A activity, with nine deals each in 2010, followed by Canada and India with five deals each. However, Europe registered the highest deal value for M&A activity with $25.8B, pushing North America to second place with $9.1B in 2010.

GlobalData expects that there will be an increase in the M&A activity in the hydro energy market, driven by supportive government policies and the increased appeal for investments in the hydro energy sector. In light of the continued government support to the renewable sector, the investment activity in the hydro sector is expected to remain robust, primarily in the Asia-Pacific region. Companies’ announcement of new budgets towards renewable energy projects and the clouds of economic crisis withering out, there will be an increase in M&A deal activity going forward. Improving market conditions coupled with growing investor confidence on the longevity of the hydro energy sector, the market will foresee more consolidation activity in the coming years.

All deals are shown in the table to the right.

For further information, and for details on a wide range of reports on the hydro industry prepared by GlobalData, please visit www.globaldata.com.


M&A Hydro Deals