INTRODUCTION Contributed by: Nicolas Wehrli, Loyens & Loeff
Despite entering 2025 with considerable optimism, the year has presented notable challenges for energy and infrastructure M&A. While the broader global M&A market has shown mixed signals, with some regions and sectors experiencing a rebound in deal value, but overall deal volume remaining subdued, the energy and infrastructure sectors have faced headwinds. Regulatory uncertainty, inflationary pressures, and ongoing supply chain disruptions have weighed on transaction activity, resulting in deal volume and value that have not fully met initial expectations. Nevertheless, there are several reasons to be opti- mistic about the outlook for energy and infrastruc- ture M&A in the coming year. The continued drive for decarbonisation, the imperative of energy security, and the rapid pace of digital transformation are all expected to support renewed deal activity. Portfo- lio realignment, the availability of capital, advances in technology, and the emergence of innovative deal structures are likely to underpin M&A, even as market participants navigate a complex macroeconomic and regulatory environment. As companies and investors adapt to evolving policy frameworks and rising ESG expectations, the sector is well positioned to capital- ise on emerging opportunities and play a pivotal role in shaping the future of global energy and infrastructure. Global Trends in Energy and Infrastructure M&A The global energy and infrastructure sectors are expe- riencing profound transformation, driven by techno- logical innovation, the acceleration of the energy transition, regulatory changes, and shifting investor priorities. M&A remains central to this evolution as companies optimise portfolios, scale up renewable investments, and respond to new challenges. Energy transition and renewables The global push toward decarbonisation and net-zero targets continues to be the primary catalyst for M&A. Governments and corporates are investing heavily in renewables, ie, wind, solar, hydrogen, and energy stor- age. In 2024, renewable energy M&A activity reached new highs, with deal value and volume up 12% to approximately USD3.4 trillion globally, and energy transition M&A accounting for USD497 billion (about 13.4% of global M&A activity). Major oil and gas com- panies are further diversifying into renewables, while
utilities expand their clean energy portfolios to meet regulatory and investor expectations. Notably, AI-driv- en electricity demand (especially from data centres) is accelerating investment in renewables, storage, and grid upgrades, making digitalisation a key trend. Energy storage and grid modernisation The integration of intermittent renewables has inten- sified demand for advanced energy storage and grid modernisation. M&A in battery storage, smart grids, and digital infrastructure surged in 2024, as compa- nies sought technologies to enhance grid stability and support electrification. The rise of AI-driven electricity demand, particularly from data centres, is accelerating investment in these areas. Grid digitalisation, includ- ing smart meters, demand response, and AI-based grid management, is now a top priority for utilities and investors. Oil and gas consolidation Despite the energy transition, consolidation in oil and gas persists, driven by high commodity prices, geo- political uncertainty, and the need for scale. Com- panies are focusing on natural gas, carbon capture, and low-carbon alternatives, with several landmark deals announced in 2024. US oil and LNG production is forecast to rise through 2026, even as renewables gain market share. Oil and gas companies are also investing in adjacent sectors such as hydrogen, bio- fuels, and carbon capture, reflecting a broader energy transition strategy. Private equity and infrastructure Private equity continues to play a vital role in infra- structure, with strong interest in digital infrastructure, energy transition assets, and sustainable transport. Institutional investors are increasing allocations to infrastructure, seeking inflation-hedged, long-term returns. Significant “dry powder” remains available for deployment, supporting robust deal activity. Private equity funds are particularly active in digital infrastruc- ture and are forming partnerships with strategic inves- tors to access large-scale opportunities. Digital infrastructure Digital infrastructure has emerged as a major M&A hotspot, driven by the explosive growth of data, cloud computing, and AI. Investments in data centres, fibre
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