Across Europe, renewables represented 76% of M&A deal value (US$8.1b) and underpinned a weaker-than-expected quarter, with an overall 78% decline in deal value in Europe to US$10.1b.
This figure was largely due to the $5.9b sale of 50% of the Hornsea 1 wind farm. US-based Global Infrastructure Partners (GIP) agreed to acquire a 50% stake in the 1.2 GW offshore wind farm from Danish company Ørsted A/S. EY said: “With an eye on long-term stable returns, GIP has previously entered into similar agreements with Ørsted to acquire other under-construction offshore wind farms”.
The Hornsea deal was the largest in Q3 2018 by some margin – the next largest deal with a 1.5b deal by Italian company F21 SGR to buy RTR Rete Rinnovabile.
The majority of deal value and volume in the third quarter were done by financial investors. Oil and gas companies Repsol and Total SA acquired renewable and generation assets this quarter. European utilities conducted only seven deals, totalling $0.84b, with six out of seven deals being domestic.
The report’s authors predicted that the conclusion of talks in Q4 on the future framework of electricity market design across the EU would help create investment certainty for 2019.
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