North American Energy Market Transactions: Insight into the Factors Influencing Mergers and Acquisitions in 2025
The energy sector in North America is experiencing a unique confluence of forces, with the ongoing global imperative of the energy transition, the AI-powered digital revolution, and a recalibration of energy policy in the US creating a challenging yet opportunity-rich landscape for Mergers and Acquisitions (M&A).
According to the report "Power Moves," which examines where capital is flowing and why, based on interviews with over 100 North American financial sponsors and corporates that have invested in renewable and/or conventional energy infrastructure M&A over the past 24 months, respondents on average give a robust average rating of 8 out of 10 to the current supportiveness of North American policies for M&A in energy transition sectors. Canadian respondents express the most significant optimism for future improvements.
Energy storage technologies are expected to be the most transformative force in energy infrastructure development in the near term, according to 74% of all respondents. Emerging technologies are the primary M&A catalyst for 58% of respondents in the energy transition arena for the coming two years.
The report provides insights into the investment trends in the North American energy sector, focusing on renewable and conventional energy infrastructure M&A. A clear strategic split exists in how different investor groups approach dealmaking: financial sponsors have unanimously pursued and plan to continue pursuing minority stakes, while corporates have focused on and will continue to target majority stakes.
Data centers are placing substantial and increasing pressure on energy demand, and investment will naturally continue to follow. Nearly half of all respondents have invested in data centers recently. However, there is a stark difference in data center investment: 59% of financial sponsors have done so, versus only 10% of corporates.
The AI boom is profoundly impacting the energy sector, with data centers at its core. Understanding the currents and crosscurrents shaping the energy sector is crucial for industry leaders and dealmakers seeking to chart a path forward.
The energy mix in the North American sector is a blend of traditional and transitional energy sources. The ongoing global imperative of the energy transition is a significant factor shaping the North American energy sector.
The recalibration of energy policy, notably within the US, is a notable factor influencing the North American energy sector. 91% of respondents believe carbon capture, utilization, and storage (CCUS) will increasingly be part of North America's decarbonization strategy in the next 24 months.
60% of respondents anticipate an increase in M&A activity within the energy transition space over the next 24 months, with 64% of financial sponsors and 50% of corporates sharing this view. The report offers a comprehensive analysis of the North American energy sector's M&A landscape, based on interviews with key industry players.
The 100+ North American financial sponsors and companies involved in renewable and conventional energy infrastructure M&A in the past 24 months include major firms such as BlackRock, Brookfield Asset Management, NextEra Energy, and General Electric. Geographically, they are primarily distributed across the United States, Canada, and Mexico, with the highest concentration in the U.S. financial hubs like New York, Houston, and Toronto in Canada.
Hydrogen adoption is another area of focus, with 90% of respondents feeling similarly about its necessity in achieving long-term climate goals. This confluence of forces creates a challenging but opportunity-rich M&A environment in the energy sector.
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