Global power & utilities transactions reached $256.3 billion in 2018

According to Ernst &Young, global power and utilities (P&U) transactions reached a new record deal value of US$256.
3 billion (€226.
6 billion) in 2018, 19% of which came from renewable energy
.

The global total includes 546 transactions, of which 253 involve renewable energy
.
Total global transaction value increased by 28% year-on-year, mainly due to a 2.
5x increase
in Europe.

According to Miles Huq, EY's global head of power and utilities transaction advisory, European P&U deals reached $126.
5 billion in 2018, "a prominent year for European M&A deals.
"
The most important of these transactions was E.
ON's acquisition of Innogy
for $46.
6 billion.

"While businesses account for 70 percent of all transactions and 80 percent of the total value of transactions, financial institutions are also generating great interest
.
We are also seeing the new energy market continue to grow in size and importance, largely driven
by consumer demand and regulations.
As we move into 2019, we expect continued growth in investment in renewable energy, energy storage and electric vehicle (EV) infrastructure," Huq added
.

Regionally, P&U deals in Europe reached US$126.
5 billion in 2018, compared to US$50.
3 billion in the same period last year.
$98.
9 billion in the Americas, compared to $102.
2 billion in the same period last year; Asia-Pacific reached $29.
7 billion, compared to $46.
7 billion in the same period last year; The Middle East and Africa region also received $1.
2 billion in deals in
2018.

In the Americas, the U.
S.
saw a 7% year-over-year decline in deal value, but it remains the most attractive target country, with capital investments of $81.
4 billion in 2018, including $55.
1 billion in domestic transactions and $26.
3 billion in inbound activity
.

China was the largest foreign investor last year, with $34 billion in outbound investment, of which $32.
6 billion went to Europe
.

Huq expects increased investment in grid-side battery technology in the U.
S.
, with European utilities focusing more on renewable generation and more investment
in electric vehicles and grid-connected energy storage in the EU.

"In 2019, we expect M&A challenges to become more complex
as interest rates rise, the macroeconomic situation remains unresolved, and political tensions weigh heavily on investors.
The market may shift to favor lenders rather than borrowers and will require increasing sophistication to identify and secure strategic investment opportunities," Huq concluded
.