The third quarter of 2024 was the busiest of the year so far for European power and gas M&A, even though deal activity continues to be relatively subdued compared to longer-term trends.

The period saw 128 deals, which is an uptick on the year-ago period but still below the third-quarter totals for 2019 through 2022, according to data from S&P Global Market Intelligence.

The aggregate transaction value of just over €13 billion represents year-over-year growth of nearly €4 billion, but is 47% less than the more than €24.5 billion recorded for the second quarter of 2024.

In the largest transaction of the third quarter, Iberdrola SA agreed to buy UK power distribution company Electricity North West Ltd. for an enterprise value of £4.2 billion. In early October, the Spanish utility announced plans to more than double its UK power investments to £24 billion through 2028, with almost two-thirds going toward grid networks.

Elsewhere, Abu Dhabi investor Masdar struck two significant European renewables deals in the third quarter, starting with an agreement to buy a 49.99% stake in a 2-GW portfolio of Spanish solar projects from Endesa SA in late July.

Masdar followed that up toward the end of the quarter with a deal to acquire the Brookfield Renewable Partners LP-owned European renewables platform Saeta Yield SA for an enterprise value of about $1.4 billion.

Sharing the capital load

Offshore wind deals were also in vogue in the third quarter, with two European energy majors combining to develop a new wind farm in the Netherlands.

French oil and gas group TotalEnergies SE joined Germany's RWE AG in the development of the 795-MW OranjeWind project in July, with the companies expanding their partnership in early October to incorporate an additional 4 GW of capacity in the German North Sea.

RWE had earlier in the year sold a 49% stake in its planned 3-GW Dogger Bank South project in the UK to Masdar.

"I think a lot of the large developers and utilities are seeing that it does make sense to actually share the capital load so as to make sure that they've got the best possible chance in that jurisdiction to achieve success at the right cost points," Tracy London, energy and power lawyer at Bracewell LLP, said during an Oct. 16 media briefing.

In a slightly different vein, Norwegian oil and gas giant Equinor ASA in October acquired a 9.8% stake in Ørsted A/S to become the Danish wind developer's second-largest shareholder after the Danish state.

Meanwhile, London said that certain players are also looking to offload "maturing offshore wind assets so as to free up the capital for some more early development."

At least one big transaction may be on the horizon, with Reuters reporting recently that Macquarie Group Ltd. is exploring the potential sale of Corio Generation Ltd., its offshore wind platform that has a development pipeline of 30 GW.

Macquarie plans to gauge interest from a handful of strategic and financial investors later this year to complete a full or minority stake sale, Reuters reported Oct. 1.

"I think a lot of people will be interested in at least segments of Corio's pipeline, and it may be on a jurisdictional basis as opposed to the whole [company] given that [its pipeline] is 30 GW," London said.