The overall market for power deal activity remained relatively buoyant, with the number of electricity and gas deals only 10 percent down in the main non-renewables power deal sector despite the more constrained financial and uncertain economic climate. According to a PricewaterhouseCoopers (PwC) annual power deals review, the power transaction spotlight in 2009 continued to shift away from the very large deals of previous years as companies focused their attention on smaller acquisitions.
For the second year running, Europe dominated the top 10 deal list. Seven out of the 10 largest transactions had European companies on both sides of the deal, accounting for three fifths of the value of all deals both by bidder and by target. European bidders featured in three out of every 10 non-renewable electricity and gas deals.
In the UK, Centrica paid USD 3.5 billion for a 20 percent stake in nuclear power company British Energy. As part of the 2008 EDF purchase of the UK firm, the two companies had announced a non-binding agreement for Centrica to purchase a stake of up to 25 percent at the same price as that paid by EDF.
However, specialists see troubled waters ahead. “The coming year will be one of obstacles and opportunities. The constrained availability of finance will inhibit deal activity and, until that situation is eased, there is unlikely to be a revival in deal values. But with some businesses running short of cash for needed expansion or facing refinancing challenges, businesses and assets may become available for corporate with strong balance sheets and cash flows,” said Manfred Wiegand, global utilities leader at PwC.