Big energy deals will continue to drive transactions into the 2030s

There has been a significant rise in the number of energy, utilities mining and infrastructure transactions, with 2,073 rumoured or announced transactions worth $510.9 billion in energy deals so far this year. For the same period last year (January to September), there had only been 1,272 energy deals worth $202.9 billion.

In the year’s mega deal so far, diversified energy business Chevron Corporation acquired independent energy business Hess Corporation in a massive $52.3 billion transaction, creating a premier integrated oil and gas company with a strong portfolio in key energy markets.

The transaction enhances Chevron's growth profile and is expected to drive significant free cash flow and shareholder returns. The merger is anticipated to achieve $1 billion in annual run-rate cost synergies by the end of 2025, positioning the merged entity for robust growth into the 2030s.

Private equity plays in energy markets

It’s been a busy year in energy deals for the Brookfield group. In March, Brookfield Renewable Holdings finalised its $10 billion takeover of Neoen, strengthening Neoen's position in the renewable energy sector.

Then in July, Brookfield Infrastructure Partners bought Colonial Enterprises , which includes the Colonial Pipeline, for an enterprise value of $9 billion. This acquisition positions Brookfield as a leader in the midstream sector, with Colonial being the largest refined products system in the US, spanning about 5,500 miles.

Brookfield's equity investment is estimated at $500 million, funded through capital recycling initiatives. The acquisition is expected to enhance Brookfield's portfolio and drive significant cash flow growth.

In January, midstream energy company ONEOK completed its $8.2 billion acquisition of natural gas processor, EnLink Midstream. This deal enhances ONEOK's integrated midstream business and diversifies its platform, with ONEOK no longer publicly traded on the New York Stock Exchange.

Then in a $6.8 billion deal in May, Anglo American plc completed the demerger of approximately 51% of its interest in the platinum group metals business, now named Valterra Platinum. The demerger is a significant step in unlocking value within the company's portfolio, allowing Valterra Platinum to pursue independent growth in the global platinum group metals industry.

Privatisations will continue

In July, La Caisse de Depot et Placement du Quebec finalised the privatisation of Innergex Renewable Energy, marking a significant milestone for the Québec-based renewable energy leader. The transaction, which retains the majority of shareholding within Québec, is supported by a syndicate of institutional investors, including local entities like Investissement Québec and Desjardins Global Asset Management, as well as 14 Swiss institutional investors.

This move aims to enhance Innergex's financial agility and accelerate the development of large-scale renewable energy projects, aligning with the company's long-term growth ambitions and broader energy transition goals.

While transaction markets have largely been dominated by takeovers, there has been movement in new listings. In August, METLEN Energy & Metals Plc started trading on the London Stock Exchange (LSE), marking a significant milestone in its strategic growth plan.

METLEN's primary listing will be on the LSE, with a secondary listing on the Athens Exchange, making it the first company to list on the LSE with its primary listing denominated in euros.

The company aims to enhance its visibility to international investors as it continues to expand its energy and metals businesses globally. Morgan Stanley and Citigroup acted as joint financial advisers for the LSE listing, while various legal and financial firms provided additional support throughout the process.

Looking ahead, big energy deals will continue to drive transactions into the 2030s, with challenging times ahead for coal assets and better conditions for diversified energy businesses or those with a maturing renewable profile.