The combined value of company- and asset-level mergers and acquisitions in the U.S. electric, multi-utility and independent power producer sector gained momentum in the fourth quarter of 2022, although the number and the total value of full-year 2022 transactions declined year over year.
The number of company-level M&A deals shrank to 14 in the fourth quarter, from 21 in the third quarter of 2022 and the fourth quarter of 2021. The aggregate value of the 14 deals, however, jumped to $8.81 billion, from $3.26 billion in the previous quarter and $8.70 billion in the prior-year quarter.
The aggregate value of corporate-level deals in full year 2022 was $14.46 billion through 55 transactions, far below the $22.50 billion in corporate-level deals from 69 transactions in full year 2021, S&P Global Market Intelligence data show.
S&P Global Market Intelligence calculates the deal's transaction value from the amount paid for equity and in cash plus the value of assumed current liabilities, net of current assets.
The number of individual asset deals in the fourth quarter of 2022 totaled 41, compared to 40 in the previous quarter and 53 in the fourth quarter of 2021. The overall value of the asset deals rose quarter over quarter to $3.65 billion but declined year over year.
For the full year 2022, asset-level deals in the sector totaled $6.60 billion through 162 individual transactions, shrinking from an aggregate value of $13.55 billion from 228 deals in 2021.
Whole company, minority deals
German power company RWE AG's proposed $6.8 billion purchase of Consolidated Edison Inc.'s competitive renewable energy generation portfolio topped the list of corporate M&A deals in the fourth quarter and full year of 2022. The deal, announced Oct. 1, 2022, will see RWE Renewables Americas LLC acquire Con Edison Clean Energy Businesses Inc., which operates about 3 GW of capacity and has a development pipeline of more than 7 GW.
October 2022 also saw the second-largest transaction with the announcement that Hydro-Québec subsidiary HQI US Holding LLC will acquire Great River Hydro LLC from affiliates of ArcLight Capital Partners LLC for approximately $2 billion. Great River Hydro owns 13 hydroelectric generating stations along the Connecticut and Deerfield rivers in Vermont, New Hampshire and Massachusetts with a total installed capacity of 589 MW.
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Asset deals
Two power asset transactions by NextEra Energy Resources LLC were among the highlights in deal activity for the quarter.
In one of the deals, the NextEra Energy Inc. subsidiary will acquire a portfolio of operating landfill gas-to-electric facilities from an investor group comprising Energy Power Partners Fund I LP and North American Sustainable Energy Fund LP, managed by Energy Power Partners LLC. The deal, announced Oct. 28, 2022, is expected to close in early 2023.
In the second deal, NextEra Energy Resources on Nov. 18, 2022, agreed to sell a 49% interest in an approximately 1.5-GW renewables portfolio and 100% of the indirect interests in a 345-MW wind portfolio to corporate affiliate NextEra Energy Partners. Under the deal, NextEra Energy Partners will pay about $805 million, plus its share of the portfolio's estimated $1.5 billion in tax equity financing, to buy the stakes.
Other notable asset transactions announced in the fourth quarter of 2022 included Energy Capital Partners LLC's acquisition of a 50% stake in the 230-MW Plum Creek, 302-MW Lincoln Land and 105-MW Willow Creek wind farms, and the 227-MW Muscle Shoals solar farm in the U.S. from Ørsted A/S for $410 million; and WEC Energy Group Inc.'s $360 million purchase of an 80% stake in the planned 250-MW Maple Flats Solar Energy Center in Illinois from Invenergy LLC.
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