Energy – What you need to know from around the world

The Middle East, particularly the GCC region, has been pushing towards overall diversification of its economies and this has tracked through even within individual sectors including energy. The region's energy sector is still dominated by traditional oil and gas but has seen a rise in deal activity in clean(er) parts of the sector. For instance, Saudi Aramco's acquisition of 50% of a blue hydrogen subsidiary of Air Products Qudra and the UAE's Masdar acquiring a 49.9% stake in 48 solar plants controlled by the Spanish company Endesa for approximately $856 million.

MENA countries continue to capitalise on their geopolitical position to trade with the West, the East and the Global South. Recently, the UAE, Italy and Albania agreed a clean energy sharing partnership underpinned by construction of a subsea cable for the export of clean energy from Albania across the Adriatic Sea into Italy. M&A deal activity has also involved assets further afield, such as ADNOC acquiring 10% of a natural gas project in Mozambique's Rovuma basin and 11.7% of a Texas-based liquified natural gas project.

We anticipate that there will be continued investment across non-renewable and renewable energy, with the latter slowly starting to constitute an increasing share of total energy investments in efforts by sovereign wealth funds to meet 2030 carbon emission targets and various commitments off the back of COP28 and COP29 summits. Saudi Arabia and the UAE are once again expected to dominate the M&A market in 2025. However, the relevance of other GCC member states should not be underestimated. Qatar has continued to make strides in gas production and Oman's largest ever IPO occurred within the energy sector in 2024 with over $2 billion raised by oil & gas company OQ Exploration and Production SAOG.

Key contacts: Chris Walters

The energy sector in Asia remains as dynamic as ever, with competing priorities and strategic considerations creating a challenging environment for investors tasked with deploying capital. The well-known 'energy trilemma' of sustainability, security and affordability remains highly relevant as decision-makers seek to balance the demands of climate change, shifting geopolitical tensions and a cost-of-living crisis.

In Asia, decarbonisation objectives continue to drive investor interest in energy transition, net-zero efforts and renewable technologies. Private capital and strategic investors continue to pursue growth opportunities in the renewables sector with many financial sponsors raising ESG/decarbonisation focused funds to invest in this sector given investor appetite. Interested investors often also include the new and renewable energy subsidiaries of the large national oil companies, including PETRONAS (Gentari), PTT (GPSC), RATCH and Pertamina (PNRE). We are seeing active sales processes in India, the Philippines, Indonesia, Vietnam and Korea. We are also seeing a new wave of interest in offshore wind projects in Japan, Taiwan, Korea, and potentially the Philippines due to regulatory changes.

There is also significant government support for development of new decarbonisation pathways, including hydrogen and CO₂ capture and storage (CCS). This is reflected in the recently issued 7th Energy Plan in Japan, which calls out the need for implementation of CCS and the development of the hydrogen supply chain to meet net zero objectives. However, given the challenges faced by early projects, we expect these sectors to develop at a more gradual pace over the next decade.

Given that the pace of decarbonisation is not as fast as initially hoped, there is renewed interest in LNG and gas as a transitional fuel. We are seeing multiple downstream opportunities coming to market, including LNG-to-power projects in Vietnam, increased activity in gas markets in South Asia, and significant investment opportunities in the upstream sector, particularly in Indonesia. The level of interest in these opportunities shows how investors are balancing efforts with energy security and affordability considerations. The Trump administration's focus on trade is also driving interest in LNG imports from the United States to address existing trade deficits.

Key contacts:

Singapore: Anthony Patten, Glynn Cooper, Peiwen Chen, Ee Lynn Tan

Hong Kong / China: Hilary Lau, Anthony Vasey, Calvin Ho

Indonesia: Matthew Goerke, Dhani Maulana Pattinggi

Japan: Andy Blacoe, Lachlan Clancy

Activity

M&A activity in the European energy sector remained strong in 2024, with total deal value reaching approximately €68.6 billion, marking a 24.6% increase compared to 2023. Despite ongoing macroeconomic challenges, inflationary pressures and geopolitical uncertainty, investor appetite for energy transition assets and energy security-driven acquisitions remained robust. Meanwhile, conventional energy assets also continued to see strategic transactions, largely driven by portfolio rebalancing and targeted divestments.

Germany emerged as the most valuable market, with close to €17 billion in deal value, representing nearly 25% of total European energy M&A. Italy followed, with over €12 billion in deals, while France and Spain recorded €10.7 billion and €4.5 billion respectively. Germany, Italy and France saw a notable surge in large-scale deal volume, reflecting strong momentum in renewable energy projects, power infrastructure and strategic acquisitions in the gas sector, while Spain saw a decline in large-scale transactions compared to the previous year.

Sectors

Among the different energy market segments, the renewables sector was the primary driver of M&A, accounting for over €22.5 billion in deal value, a significant increase from €5.88 billion in 2023, and comprising one third of total energy M&A activity. Investor appetite for onshore and offshore wind, solar and battery energy storage systems (BESS) continued to accelerate, as regulatory incentives, corporate decarbonisation strategies and the EU's energy transition policies continued to fuel demand. Notable transactions included Brookfield Renewable Holdings’ €3.22 billion acquisition of Neoen SA, KKR’s €2.82 billion tender offer for Encavis AG, Masdar’s €1.65 billion acquisition of Terna Energy SA and TotalEnergies’ €1.57 billion acquisition of VSB Holding GmbH, reflecting strong institutional and international interest in European renewables assets.

The power distribution and services sectors generally also played a central role in M&A activity. Investments in grid infrastructure and electrification were key themes – one example being A2A SpA’s €1.22 billion purchase of Enel’s electricity distribution assets. One of the most substantial energy transactions of 2024 was TPG and GIC’s €6.7 billion acquisition of Techem GmbH, an energy service provider focused on decarbonising and digitising building energy systems – an indicator of growing investor interest in energy efficiency and heating electrification technologies.

The oil and gas sector, by contrast, experienced a decline, with €15.31 billion in deal value, representing 22% of total energy M&A – a sharp drop from €21.82 billion in 2023. The decline in transaction volume reflects the ongoing shift away from fossil fuels, as well as strategic divestments among European energy majors. Despite this trend, some significant transactions occurred, including PRIO SA's €1.71 billion acquisition of Sinochem Petroleum Netherlands and Italgas SpA’s €2.06 billion acquisition of 2i Rete Gas SpA, strengthening its position in Italy's natural gas distribution system.

The liquefied natural gas (LNG) sector continued to attract investment as European governments and industrials sought to diversify energy supply and reduce reliance on Russian gas imports. This was evident in Enagás SA’s acquisition of an increased stake in Hanseatic Energy Hub GmbH, a project central to Germany’s expanding LNG infrastructure.

Legal Trends

Regulatory trends shaped energy M&A activity in 2024 and are expected to drive deal trends in 2025. The ongoing shift toward decarbonisation, supported by regulatory incentives such as the EU’s Fit-for-55 package, continues to make renewable energy platforms and assets attractive targets for both corporate buyers and institutional investors. However, the regulatory landscape is evolving with a growing emphasis on industrial competitiveness, energy security and supply chain resilience, which is likely to impact investment strategies and transaction structures in the coming years.

Central to this transition will be the upcoming Clean Industrial Deal (expected in Q1 2025), which aims to further facilitate industrial decarbonisation while maintaining European energy-intensive industries’ competitiveness. Amongst the measures that are expected to be introduced by the policy package are targeted state aid and risk mitigation mechanisms to encourage investment in renewables, energy storage, and low-carbon energy projects. In its Competitiveness Compass published earlier this year, the EU Commission placed particular emphasis on reducing external dependencies in critical energy technologies. The European Grids Package and upcoming Electrification Action Plan (2026) are expected to drive further investment into grid resilience and cross-border energy interconnections, positioning the sector for continued deal activity.

Additionally, EU financing mechanisms can play an important role in facilitating M&A activity in the energy sector. The Connecting Europe Facility (CEF), which provides targeted funding for cross-border energy infrastructure projects, recently allocated €1.25 billion for cross-border electricity grid expansion (including offshore wind integration projects), hydrogen corridors and CCS infrastructure across Europe.

Outlook for 2025

Looking ahead, the European energy sector is expected to maintain strong M&A activity, as the trends observed in 2024 – targeting renewable platforms, energy storage and grid infrastructure assets, alongside strategic acquisitions in conventional energy – continue to shape the market. While financing conditions and geopolitical risks remain key factors to watch, investor interest is expected to remain high, driven by regulatory incentives aimed at facilitating industrial decarbonisation and enhancing energy security and infrastructure.

In the coming months, the introduction of key policy initiatives, such as the Clean Industrial Deal, is likely to provide further momentum for investment in renewables and energy transition technologies. With the EU targeting 42.5% renewable energy consumption by 2030, alongside ambitious capacity goals of 750 GW of solar and 425 GW of wind, significant capital will be required to scale up energy infrastructure and integrate a growing share of renewable energy into the system.

Battery storage and grid resilience will be key areas of focus, as the transition to a decarbonised energy mix requires enhanced flexibility and stability in electricity networks. The EU has already outlined the need for substantial investment in storage solutions, aiming for 200 GW of capacity by 2030 and 600 GW by 2050, to ensure grid reliability. This is expected to drive increased M&A activity in the sector, with investors targeting storage platforms and companies positioned to support grid balancing and flexibility services.

LNG is also likely to remain an important part of the European energy mix in 2025, particularly as geopolitical uncertainties continue to impact energy security considerations. While the long-term outlook for fossil fuels remains uncertain, strategic investments in LNG terminals and biofuels are expected to persist as part of broader efforts to ensure supply diversification.

The hydrogen economy and CCS will also attract growing investor interest, supported by EU funding mechanisms and industrial decarbonisation targets. With the Net-Zero Industry Act setting a goal of at least 50 million tonnes of CO₂ storage capacity by 2030, project financing and M&A activity in the CCS sector are likely to gain further traction.

For more information on energy M&A in Italy, see our more detailed piece here.

Key contacts:

Paris: Rebecca Major, Nina Bowyer, Paul Morton, Mathias Dantin, Olga Melo Zanelli, Thomas Herman, Frédéric Bouvet, Cyril Boulignat, Edouard Thomas, Bertrand Montembault

Italy: Francesca Morra

Spain: Alberto Frasquet, Iria Calviño, Miguel Fraga, Guillermo Uriarte Senén

Germany: Christoph Nawroth, Oliver Duys, Julius Brandt, Marius Boewe

Despite a moderate decline in deal value in 2024 (£15.63 billion, down from £18.34 billion in 2023), the energy sector remained a significant contributor to M&A activity in the UK, representing over 10% of overall deal value. The sector saw a shift in investor focus, with a notable decline in oil & gas transaction volumes and a growing emphasis on power sector investments.

The power sector dominated UK energy M&A, with total deal value soaring to £10.79 billion in 2024 (69% of all energy transactions), nearly tripling from £3.35 billion in 2023. This surge was largely driven by offshore wind investments, large-scale power generation acquisitions, and platform transactions. Notable transactions included Energy Capital Partners acquiring Atlantica Sustainable Infrastructure PLC for £2 billion, marking the largest power deal of the year, Brookfield Infrastructure Fund V acquiring a 12.45% (minority) stake in four UK offshore wind farms from Ørsted for £1.75 billion, and TotalEnergies SE acquiring West Burton Energy, which owns and operates a 1.3 GW gas-fired power plant, for £450 million.

In contrast, oil & gas transactions saw a substantial drop, with total deal value falling from £8.95 billion in 2023 to £2.33 billion in 2024. Despite this downturn, strategic transactions continued as companies rebalanced portfolios and sought to optimise their upstream and midstream assets. Notable deals included Ithaca Energy PLC acquiring almost all of Eni SpA's UK upstream oil & gas assets in a stock-based deal valued at £754 million, and Apollo Global Management acquiring a minority stake in BP Pipelines TAP Ltd for £762 million, reflecting ongoing investment in gas transportation infrastructure.

Beyond traditional energy assets, battery energy storage systems and technologies emerged as an area of increased investor interest in 2024. In a landmark transaction, UK Infrastructure Bank, Centrica, and a consortium of investors invested £300 million in Highview Power to support the development of the UK’s first commercial-scale liquid air energy storage (LAES) plant.

Looking ahead, UK energy M&A is expected to remain active, with focus likely to stay on power and renewable assets, infrastructure investments and strategic moves in oil & gas, while interest in battery storage assets continues to grow.

Key contacts: Steven Dalton, Sarah Pollock