Global M&A Soared in '07

Light & Medium Truck,  May 2008  

• E-mail
• Print
• Link

Global mergers and acquisitions in the electricity and gas sectors set a record for the number of actions and their value in 2007, despite the worldwide credit crunch, investment firm PricwaterhouseCoopers reported.

Worldwide, mergers and acquisitions in these sectors were valued at $372.5 billion, a 25% increase over 2006 and almost nine times the $43 billion recorded in 2003, according to PricewaterhouseCoopers.

Activity in Canada and the United States soared to $95.2 billion in 2007, a 34% jump from 2006. Leading this activity was the $43.8 billion buyout of TXU Corp. by a private equity consortium led by Kohlberg Kravis Roberts & Co., Texas Pacific Group and Goldman Sachs Capital Partners. This transaction contributed 46% to the year's total deal value for the region and roughly 12% of global, the report said.

The volume of global deals jumped from 623 deals in 2006 to 768 in 2007, an increase of more than 23%, the company said.

There was no clear evidence of a fall-off in deal activity in the latter half of the year when the credit crisis broke. Fifty-seven percent of the deal volume, 441 of the total 768 deals in 2007, occurred in the second half of the year. In the fourth quarter of 2007, the deal value rose 73% above the same period in 2006, the company said in a release.

Despite the credit crunch and uncertainty surrounding the pending U.S. elections, John McConomy, U.S. power and utilities transaction services leader for PricewaterhouseCoopers, said interest in investing in U.S. entities should remain strong.

"Looking ahead, the election year creates more uncertainty, as it is likely to prompt potential regulatory and legislative actions, particularly impacting carbon emissions. Global interest (particularly from Europe) hi U.S. power assets is expected to remain high with the current relative weakness of the U.S. dollar, despite credit market conditions and continued regulatory uncertainty," he said.

Copyright Transport Topics Publishing Group (TTPG) May 2008
Provided by ProQuest Information and Learning Company. All rights Reserved