Energy

What you need to know

• Fewer, larger deals: Global energy M&A deal count fell ~11% from 2022 to 2025 yet aggregate value increased to US$426.7 billion in 2025, with average deal size rising ~27%.
• Decarbonisation driving deal economics: Carbon policies, "repower" strategies and landmark deals like the pending US$ 38.4 billion take-private of AES Corporation reflect strong investor appetite for energy transition assets.
• Energy security tensions: Geopolitical disruptions are pushing Southeast Asian nations toward domestic renewables, nuclear options and upstream exploration.
• Surging electricity demand: Data centres, AI workloads and electrification are straining grids globally, driving utility-scale consolidation exemplified by the pending US$118.9 billion NextEra/Dominion merger.
• UK market momentum: Offshore wind farm-downs, nuclear new-build financing (including the Sizewell C RAB model) and infrastructure-fund appetite for grid and storage (including CCUS) assets are driving UK deal activity. The Clean Power 2030 Action Plan and GB Energy are reshaping the market.
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Energy - the M&A state of play

The global energy M&A landscape is being reshaped. While energy infrastructure is captured in the infrastructure section of this report, this chapter considers the energy landscape as shaped by the accelerating energy transition and surging electricity demand.

Within utilities and energy, deal count has fallen from 2,321 in 2022 to 2,059 in 2025 (declining ~11%), with H1 2026's figure of 959 suggesting a downward trajectory to ~1,918 for the full year. In contrast, after dropping ~40% to US$228.2 billion in 2023, aggregate deal value rebounded to US$426.7 billion in 2025 and H1 2026 alone has reached US$341.1 billion. This divergence indicates an increase in average deal size, rising ~27% from US$163.2 million in 2022 to US$207.2 million in 2025. The market is shifting toward fewer but larger transactions as the importance of scale increases.

Geographically, the United States dominates with US$312.8 billion in aggregate value across 353 deals, far outpacing the United Kingdom (US$35.5 billion, 111 deals) and China (US$29.1 billion, 207 deals). Among other markets, deal size varies: China and Italy show high deal counts against their aggregate values (207 and 129 against US$29.1 billion and US$13.3 billion respectively), while the United Arab Emirates and Canada exhibit lower counts against their aggregate values (14 and 39 against US$8.5 billion and US$15.5 billion respectively).

UK deal activity accelerated in H1 2026, driven by improved policy visibility following the Clean Power 2030 Action Plan and GB Energy co-investments. Infrastructure funds and sovereign wealth funds were prominent buyers, attracted by the long-duration, inflation-linked return profiles of UK energy assets.

The energy transition and decarbonisation

Decarbonisation remains a stated policy goal across many jurisdictions, with carbon taxes and climate change laws increasingly having an impact. However, this is somewhat in opposition to energy security (where fossil fuels may be within a jurisdiction) and the pace of energy transition varies by region.

In the United States, the Inflation Reduction Act’s tax credits for renewables, battery storage and clean hydrogen continue to shape deal economics and asset valuations. “Repower” strategies, where operational assets are paired with significant upgrades, present an opportunity for real returns. The pending US$38.4 billion take-private of AES Corporation by Global Infrastructure Partners, EQT, CalPERS and Qatar Investment Authority reflects investor confidence in US power generation portfolios. Private capital and sovereign wealth funds are increasingly active acquirers of US power assets.

In the UK, European utilities are farming down stakes in operational and development-stage North Sea wind farms to recycle capital, a pattern mirrored across EMEA. The Celtic Sea floating offshore wind leasing round attracted strong developer interest and spurred joint venture and consortium formation. The Sizewell C RAB model, based on Thames Tideway, is unlocking institutional participation, with total investment commitments exceeding £20 billion. SMR developers are progressing through the GDA process, while National Grid’s multi-decade £60 billion-plus electricity transmission programme is generating supply-chain M&A.

In Australia, 18% of Australian public M&A deals in 2025 related to the broader energy industry but traditional energy deals (oil, coal and gas) accounted for only 2% of total deals, with aggregate value falling materially. Regardless, broader energy deal value remained modest at A$1.2 billion (3% of total), down from 18% in 2024, suggesting that while interest in transition-linked assets persists, larger-ticket opportunities are harder to find and execute.

Within utilities and energy, deal activity is increasingly concentrated. While total deal count fell ~6% from 1,018 to 959 between H2 2025 and H1 2026, aggregate value surged ~55% to US$341.1 billion. Electric power, which captured 84.1% of aggregate value, up from 42.3%, almost tripled in average deal size (~US$476 million). Conversely, gas and water supply deal aggregate values contracted sharply (US$53.9 billion and US$26.1 billion in H2 2025 to US$4.6 billion and US$7.9 billion in H1 2026 respectively), while other subsectors held broadly steady.

Energy security as a countervailing force, and alternative sources

Energy transition sits in tension with energy security, particularly in Southeast Asia. Geopolitical tensions, including the Iran conflict and Strait of Hormuz disruptions, have underscored energy security concerns with many Southeast Asian economies hit hard by the hydrocarbon disruptions (e.g. Philippines, Thailand). This has spurred domestic renewable efforts (e.g. China) but is dependent on access to renewable resources (high irradiance for solar, and wind and hydropower resources).

Countries without sufficient renewables are exploring nuclear options, specifically small modular reactors. Regional solutions such as the long-discussed ASEAN power grid remain stalled because no country is presently comfortable being dependent on transmission through a neighbour's grid. Countries with upstream oil and gas resources (e.g. Thailand, Malaysia, Indonesia) are increasing upstream exploration and production for both profitability and national energy security.

Japan remains committed to green hydrogen and is a key export market, though most Asian markets are taking a "wait and see" approach. Solar has benefited from global inflation due to its simplicity and cost-effectiveness, with growing interest in solar, geothermal (e.g Philippines, Indonesia) and pumped hydro (e.g Philippines). Offshore wind has fallen out of favour due to high costs and construction challenges, notably in Taiwan.

In the UK North Sea, upstream consolidation is continuing as operators use mergers and strategic JVs to achieve economies of scale and manage the Energy Profits Levy, decommissioning liabilities and regulatory and fiscal uncertainty.

In the United States, upstream oil and gas consolidation continues apace, with operators seeking basin diversification, inventory depth and operating scale to compete in a volatile commodity price market. This is exemplified by the Devon/Coterra all-stock merger (US$28.9 billion). Rising LNG export demand and long-term supply contracting are attracting international buyers to US upstream portfolios, including Mitsubishi's US$7.5 billion acquisition of Aethon United LP targeting Haynesville Shale assets.

Surging electricity demand

The rapidly increasing electricity demand from data centres, AI workloads and electrification is driving utilities to pursue scale. In Southeast Asia, data centre demands are straining national grids and generation capability.

A key example in the United States is the pending US$118.9 billion merger between NextEra Energy and Dominion Energy which, if completed, would create the largest US utility. A diverse mix of generation is being pursued, and renewables are remaining cost-competitive with speed to power.

Regulatory and structural implications

The regulatory environment is increasingly complex. In the United States, energy transactions face concurrent reviews across multiple agencies: HSR/antitrust, FERC Section 203, NRC and state utility commissions, as well as CFIUS scrutiny for cross-border deals involving critical infrastructure. Federal permitting reform remains a legislative priority, with direct implications for infrastructure development and project-level M&A. Heightened regulatory scrutiny will lengthen deal timelines, favouring bidders who engage regulators early and hold favourable queue and supply-chain positions.

In the UK, the CMA can review transactions for a substantial lessening of competition, and the Energy Act 2023 introduced a special Energy Network Mergers regime for certain combinations of same-type energy network enterprises in Great Britain, requiring assessment of whether a transaction would substantially prejudice Ofgem’s ability to make comparisons for its price-control functions. The NSIA mandatory notification regime covers energy among 17 sensitive sectors, with approximately 10% of notifications relating to energy. REMA is progressing toward implementation, with zonal pricing proposals that could affect asset valuations, while GB Energy is creating new co-investment structures across wind, solar, hydrogen and carbon capture.

In Southeast Asia, the post-COVID renewable platforms have undergone consolidation, with smaller projects rolled into larger platforms. Recent platform sales in the market have had limited success, possibly due to a sprawling range of assets and jurisdictions. Interest in the market has been related to targeted, focused platforms with a strong growth story and solid investment thesis.

In Australia, national security concerns remain a focus for transactions in the energy sector with Australia's Foreign Investment Review Board taking considerable time to approve sensitive transactions.

Taken together, the trends identified in this section point to an energy M&A market that is growing in strategic complexity and regulatory intensity, but one in which the fundamental drivers (decarbonisation, energy security and electrification-led demand) will continue to generate transaction activity across regions.