GERMANY Law and Practice Contributed by: Gregor von Bonin, Natascha Doll, Andreas Ruthemeyer, Stefan Schröder and Mirko Masek, Freshfields
1. Market Trends 1.1 Energy and Infrastructure M&A Market Germany’s energy and infrastructure M&A market over the past 12 months has been resilient, albeit more selective. Overall volumes eased slightly versus the prior 12 months, but pricing held for high-qual- ity, income-predictable assets. Buyer focus shifted toward platforms with visible pipelines, grid-adjacent businesses, and assets with contracted or regulated cash flows. Processes took longer, yet completion rates remained high where regulatory paths and bank- ability were clear. Market Headwinds and Tailwinds Higher base rates and equipment cost inflation com- pressed debt capacity and pushed more equity into transactions. Sponsors leaned on hybrid capital, deferred consideration and earn-outs to bridge valu- ation gaps. At the same time, easing supply-chain bottlenecks and stabilising power-price expectations improved underwriting confidence. Russia’s war in Ukraine kept energy security front of mind, sustaining appetite for domestic produc- tion, flexibility, grid, and gas system resilience. The energy transition is now viewed not only as a path- way to achieving net zero but also as an instrument to achieve energy security. Events in the Middle East, coupled with broader trade tensions, have introduced further price volatility in commodities and equipment. Germany’s strategic response – accelerating renew- able energy deployment, storage capacity, and grid expansion – has reinforced the long-term investable landscape. Consequently, capital has increasingly shifted towards assets that strengthen system ade- quacy and reduce reliance on imports. Germany in a Global Context In comparison with global energy and infrastructure M&A activity, Germany mirrored the broader European slowdown in overall transaction volumes but outper- formed in the renewables-plus-flexibility and regulat- ed network segments. In essence, the German market neither experienced a boom nor a downturn; instead, it consolidated around policy-anchored investment themes.
1.2 Energy and Infrastructure Trends Platform Over Project
Buyers prioritised platform acquisitions and carve- outs that bundle development, construction and O&M capabilities. This improves control over capex timing, connection queues, and procurement, while giving sellers partial exits with upside via earn-outs. Hybrid Equity and Structured Capital Hybrid equity continued to gain traction, typically in the form of minority stakes with enhanced governance, regular or preferred equity with downside protections, and JV vehicles that keep incumbents in operational control. These structures reduce FDI friction and pre- serve unbundling compliance while unlocking growth capex and/or allowing issuers to deleverage. They also match asset profiles, such as regulated networks and availability-style revenue models, with investors seeking yield and capital preservation. Hydrogen and CO₂ Midstream Emergence Hydrogen core-network planning and enabling steps for CO₂ transport and offshore storage turned from strategy into concrete network development plans, letters of intent and potential transactions. Investors began considering tariff models, third-party access, repurposing liabilities, and cross-border interfaces. Business Approach and ESG Boards treated decarbonisation as a core value lever rather than a compliance task. Diligence expanded to include curtailment exposure, redispatch costs, biodiversity and water use, alongside traditional con- struction and offtake risk. This heightened rigour was reflected in contingent pricing, stricter conditions precedent, and post-close capex governance that ties ESG commitments to financing margins. 1.3 Access to the Energy and Infrastructure M&A Market Germany’s energy and infrastructure M&A market remains highly attractive to a diverse group of inves- tors, driven by the country’s energy transition goals, regulatory support, and demand for inflation-protect- ed assets. How Investors Enter Investors used four principal routes:
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