Description
Deal activity in the energy and infrastructure sectors for the first half of 2023 has fallen short of expectations, both in the number and cumulative value of transactions. This slowdown isn't surprising considering the challenges in deal valuation brought about by rising interest rates, heightened inflation, geopolitical turmoil, and commodity price fluctuations. However, despite these uncertainties, we anticipate a resurgence in M&A activity within the energy and infrastructure domains by year-end due to:
- A significant reserve of funds in private equity;
- The ongoing rapid pace of the energy transition;
- A heightened emphasis on supply chain security; and
- Value opportunities emerging from the present macroeconomic conditions.
We are closely tracking ESG conversations concerning the management of carbon-intensive assets and their potential influence on M&A activities going forward. While many companies have started divesting away from their carbon-intensive assets, there is increasing concern that these actions might have an adverse impact on carbon emissions which has sparked negative responses from investors. Sellers and buyers of these assets should engage deeply with their stakeholders and adapt their M&A strategies to avoid allegations of greenwashing and prevent transactional interruptions.
THIS EVENT IS AT THE WELLS FARGO BUILDING ON THE 1ST FLOOR.