Energy: Security, Transition And Powering Infrastructure

The energy sector finds itself at the centre of several topical debates as jurisdictions look to make progress on energy security, the energy transition and powering the infrastructure underpinning emerging technologies.

To understand how these forces are shaping the energy sector around the world, read our regional insights below.

Africa

Energy M&A activity in Africa is predicted to grow in 2026, driven by strategic shifts in the oil and gas sector and increased investment in renewables

M&A activity in Africa's energy sector remained a primary driver of deal value in 2025, ranking second only to the consumer sector. Inbound M&A deals rose by 40% over 2024 despite a decline in intra-Africa regional deals due to geopolitical uncertainty and rising interest rates. Activity was driven largely by international oil companies divesting mature assets to indigenous and national firms and by a transition towards mature commercial scale renewable energy platforms.

South Africa, Nigeria and the rest of West Africa led the continent in terms of transaction volumes.

Major 2025 transactions

Oil and gas dominated the bigger ticket transactions, with major transactions closed in 2025 in the energy sector including:

• Vitol's acquisition of a 30% interest in Eni's Baleine project in Cote d'Ivoire (US$1.65 billion);
• Shell's sale of Shell Petroleum Development Company of Nigeria (SPDC) to the Renaissance consortium of 5 local Nigerian companies (US$2.4 billion); and
• Gabon's National Oil Company's acquisition of the assets of Tullow Oil in Gabon (US$300 million).

2026 outlook

The outlook for M&A activity in Africa in 2026 is positive across the various sub-sectors. With energy demand projected to grow by 30% by 2030, there is a strong investment case for the continent.

Renewable energy

Renewable energy M&A in Africa is anticipated to increase in 2026, driven by:

• strong demand for sustainable and resilient energy solutions;
• investment shifting towards proven operating assets rather than greenfield projects;
• private equity players such as Actis, Denham Capital and Helios Investment Partners actively targeting African renewable projects;
• a focus on green hydrogen and battery storage; and
• policy reforms and private investment in transmission, which are helping to overcome challenges associated with grid capacity and municipal debt.

South Africa is expected to anchor the continent's renewable‑energy M&A activity in 2026. Structural reforms, including market liberalisation and the opening of competitive electricity markets through the Electricity Regulation Amendment Act (ERAA), are enabling increased private sector participation. Investment is concentrated in battery energy storage systems (BESS), private wheeling arrangements and acquisitions of established renewable portfolios.

Complementing the ERAA, the South African government introduced the Electricity Transmission Regulations in October 2025 to formalise private investment in grid infrastructure. The formation of consortia and acquisition of stakes in transmission SPVs will likely contribute to a new class of infrastructure‑focused M&A activity in South Africa.

Oil and gas

Oil and gas M&A in Africa is similarly anticipated to increase in 2026 driven by:

• continued portfolio rationalisation by international oil companies shedding non-core assets to balance profitability and sustainability;
• a willingness of local participants and independents to acquire divestment assets, combined with a push from governments to increase public ownership in the sector;
• increased licensing activity providing a pipeline of investment opportunities; and
• increased investment in gas and LNG in response to the need for global security of supply and growing local energy demand.

Key markets are likely to include:

• Nigeria, which will continue to be a central hub with major divestments;
• North Africa, with Algeria and Libya attracting investment through new licensing rounds and updated fiscal terms; and
• Namibia, which is attracting high impact exploration interest with major offshore drilling projects planned for 2026.

Deal structuring

While cash remains king, investors are increasingly giving consideration to stock-for-stock transactions and other alternative deal structures to facilitate African acquisitions.

On the oil and gas side, commodity traders continue to play an important role in financing transactions, particularly as national oil companies become more acquisitive.

Navigating risk in a growing market

Looking ahead to the rest of this year, the challenges for Energy M&A in Africa will continue to be:

• diverse legal systems across the continent and varied, and often unpredictable, regulation;
• concerns about political risk and instability, with stable regulatory regimes continuing to attract greater attention; and
• grid congestion and under-developed infrastructure disincentivising investment.

For investors able to navigate the region's complexity, Africa's growing energy demand continue to make it a compelling energy investment destination.

Authors: Ross Lomax, Paul Morton

Asia

Energy security, data centre demand and uneven decarbonisation are reshaping dealmaking across Asia's energy sector

After a period of more selective dealmaking, driven by financing conditions and valuation discipline, M&A activity in Asia's energy sector is increasingly being shaped by consistent, overlapping themes. Rather than a simple rotation from one asset class to another, current transaction activity reflects a repricing of what investors value most: reliability of supply, security of access and the ability to position portfolios for a transition that is proving uneven across markets.

Against this backdrop, the M&A landscape in Asia is expected to continue to be driven by:

• a structural increase in demand for reliable access to energy (in large part driven by the rapid expansion of data centres and digital infrastructure for AI);
• growing energy and resource security imperatives; and
• ongoing decarbonisation objectives.

Data centres and the shift towards system reliability

The surge in data centre development, particularly in Southeast Asia, has been driven by hyperscalers establishing regional hubs in Singapore and neighbouring markets like Johor and Indonesia. This, combined with grid-connection constraints, is shifting the investment thesis from capacity installation (adding raw megawatts) to system reliability (ensuring deliverability).

Increasingly, financial sponsors and infrastructure funds are placing a premium on assets capable of delivering 24/7 reliability, driving heightened interest in battery energy storage systems (BESS) and captive or hybrid power solutions. This is contributing to a pattern of platform consolidation, where larger players acquire developers not only for future project pipelines, but also for access to existing grid capacity, permits and regulatory approvals.

In several markets, these attributes are becoming as significant as the underlying generation assets themselves, and are increasingly central to valuation and deal structuring.

Energy security and resource competition

Energy security has re-emerged as a parallel driver of strategic M&A across Asia. This trend is most visible in Malaysia and Indonesia, where a "return to basin" strategy by majors like Eni and TotalEnergies is being driven by new, more flexible production sharing contracts and major gas discoveries such as Geng North and Layaran.

In the critical minerals supply chain, the strategic push to diversify away from single-source dependencies is sustaining investment interest in downstream processing, despite commodity-price volatility. This is reinforcing Indonesia's position in nickel and elevating Vietnam as an alternative hub. However, investors face a hardening regulatory environment. Resource-nationalist policies, localisation requirements and evolving export controls are heightening regulatory risk, necessitating deeper due diligence and more deliberate structuring to mitigate exposure to policy shifts and value erosion.

Gas regains strategic relevance

Against the growing acceptance that the pace of decarbonisation will not be as fast as initially hoped, a pragmatic recognition of gas as a medium-term necessity has taken firmer hold. This reflects the need for firm, dispatchable capacity to underpin power-constrained markets. Improving financing conditions, as well as the long over-due development of a number of major LNG projects, have supported a rebound in transaction activity across gas-linked infrastructure.

Buyers across Asia continue to secure long-term LNG supply agreements to manage price volatility and enhance supply security. This, in turn, is supporting continued investment and consolidation across midstream and LNG-to-power assets in South and Southeast Asia, including Thailand. It shows the market narrative is broadening from a singular focus on decarbonisation to a wider emphasis on energy security, reliability and diversification.

The outlook for 2026

Looking ahead, these themes point to an M&A environment in which value is increasingly shaped by access, positioning and execution rather than by asset class alone. Platform scale, regulatory footing and the ability to navigate cross-border complexity are becoming key differentiators in competitive processes. For both strategic buyers and financial sponsors, the opportunity is less about making bets on a single segment of the energy value chain, and more about assembling portfolios that can perform across a range of market conditions, where reliability, security and transition dynamics are all part of the same equation.

Authors

Singapore: Anthony Patten, Glynn Cooper, Peiwen Chen, Ee Lynn Tan,

Hong Kong/ China: Hilary Lau, Anthony Vasey, Calvin Ho,

Indonesia: Matthew Goerke, Dhani Maulana Pattinggi

Europe

European energy M&A remains resilient as investors focus on grid infrastructure, renewables platforms and policy-backed transition assets

M&A activity in the European energy sector moderated in 2025 but remained resilient, with total deal value reaching approximately €57.5 billion across 893 transactions. Although this marks a decline from the elevated levels recorded in 2024, the market demonstrated depth and stability, supported by sustained investor interest in grid infrastructure, power platforms and selected conventional energy assets.

Despite a more cautious macroeconomic backdrop – characterised by geopolitical volatility, higher financing costs and evolving regulatory frameworks – deal flow remained healthy, especially in core infrastructure segments. Rather than experiencing a sharp correction or surge, the market consolidated around policy-driven investment themes, with capital gravitating towards system-critical assets and mature platforms offering long-term revenue visibility.

Germany reaffirmed its role as Europe's most active M&A market, accounting for approximately €23.2 billion in deal value – around 40% of total European energy M&A. This reflected continued momentum in grid infrastructure, renewable energy and energy storage assets, alongside platform-scale consolidation in both regulated and merchant energy businesses. Spain followed with €7.5 billion in deal value across 98 transactions, driven largely by solar PV, hybrid and battery storage projects. Italy and France recorded comparable levels of activity, with €5.9 billion and €5.6 billion in deals respectively, while the Netherlands saw €2.6 billion in energy M&A. Combined, these five markets represented more than two-thirds of European deal value, with investors focusing on markets offering size, liquidity and regulatory support.

Sectors with strong performance

Power and grid infrastructure led the market in 2025, accounting for nearly 60% of total energy deal value. Investor appetite remained concentrated in electricity transmission and energy services, reflecting the structural shift toward electrification and system flexibility. Standout transactions included the €9.5 billion acquisition of a 46% stake in German TSO TenneT by a consortium of state-backed investors (APG, GIC and Norges Bank), Apollo's €3.2 billion investment in Amprion, and the €6.7 billion full acquisition of Techem GmbH by a Swiss-led investor group.

These deals reflect increasing institutional interest in regulated and semi-regulated grid assets that benefit from long-term earnings visibility. Momentum in the renewables sector, particularly solar and wind, was also evident. Ares Management's €2 billion minority acquisition in Eni Plenitude and Velto's €1.1 billion acquisition of two solar portfolios in Spain underscore continued investor confidence in integrated clean energy platforms. Another notable transaction in this space was Ardian's €2.1 billion leveraged buyout of French renewables firm Akuo Energy, signalling ongoing appetite for large-scale energy transition assets.

The oil and gas sector saw continued portfolio optimisation and capital recycling, with €13 billion in total deal value across 128 transactions. Activity was shaped by strategic divestments, midstream consolidation and a selective focus on downstream assets with stable cash flows. Notable transactions included Stonepeak and Energy Equation Partners' €1.5 billion acquisition of a controlling stake in JET Tankstellen Deutschland and Mitsui OSK Line's €1.58 billion acquisition of Rotterdam-based LBC Terminals. Both reflect sustained investor interest in established infrastructure with long-term demand visibility.

The legal trends shaping energy M&A in Europe

The European energy M&A landscape is being driven not only by market fundamentals, but by a shift in legal and regulatory trends. As governments move from crisis-era interventions towards long-term industrial planning, a new legal-political consensus is emerging – one that prioritises system resilience, energy security and competitiveness.

The Clean Industrial Deal, launched in the beginning of 2025, crystallises the EU's strategy to position grid infrastructure, renewables, low-carbon fuels, storage and carbon capture as industrial priorities. It also provides an overarching framework for public co-financing, permitting acceleration and policy-driven de-risking. The EU Grids Package, presented in December 2025, introduced a range of legislative measures aimed at accelerating grid modernisation and cross-border interconnection. These reforms reinforce the attractiveness of transmission and distribution assets for institutional investors, particularly in core markets, where public funding and regulatory clarity are increasingly seen as bankability catalysts.

These EU-level trends are reinforced by national initiatives, notably in Germany, where a €500 billion sovereign infrastructure fund was launched in March 2025. At least €100 billion is earmarked for energy transition priorities, including grid modernisation, energy storage, and industrial decarbonisation. The fund's design is explicitly aimed at attracting co-investment from infrastructure funds and institutional capital. This regulatory-financial shift is transforming Germany into one of the most dynamic markets for energy infrastructure M&A.

Outlook for 2026

We expect M&A activity in the European energy sector to remain resilient in 2026. While macroeconomic uncertainty, further commodity price volatility and equipment cost inflation may weigh on some financing structures, the policy environment continues to support capital deployment in energy transition infrastructure.

Renewables, grid expansion and battery storage are expected to dominate transaction pipelines, particularly where projects are mature, cash-generative and aligned with regulatory frameworks offering stability or public co-investment. Portfolio rebalancing will also be a key driver, as some international players reassess their exposure to US renewables markets and look to deploy capital in more stable European jurisdictions. Developers are increasingly shifting from early-stage development risk to acquiring or scaling operational platforms. Private equity sponsors that entered the market five to seven years ago may also pursue exits, with strong secondary demand expected in renewables and regulated infrastructure.

With the EU targeting 200 GW of energy storage by 2030, battery energy storage and grid services will also see heightened activity, with legal structuring playing a key role in unlocking project finance and navigating grid connection and curtailment regimes.

Against this backdrop, M&A activity in 2026 is likely to coalesce around policy-aligned, system-relevant assets that offer scale, resilience and long-term revenue certainty. As industrial strategy and energy policy become increasingly intertwined, legal and regulatory positioning will remain pivotal – shaping both asset valuation and the evolving contours of deal origination across the European energy landscape.

Authors

Paris: Rebecca Major, Nina Bowyer, Paul Morton, Mathias Dantin, Olga Melo Zanelli, Thomas Herman, Frédéric Bouvet, Cyril Boulignat, Edouard Thomas, Bertrand Montembault

Italy: Francesca Morra

Spain: Alberto Frasquet, Iria Calviño, Miguel Fraga, Guillermo Uriarte Senén

Germany: Christoph Nawroth, Oliver Duys, Julius Brandt, Marius Boewe

UK

UK energy M&A moderated in 2025 but remained resilient as investors focused on power infrastructure, storage platforms and strategic gas assets

2025 was a more selective year for UK energy M&A. Headline deal value fell sharply to £5.24 billion (down from £14.37 billion in 2024) and volumes also softened (136 transactions in 2025 vs 178 in 2024). This reflects a market still digesting higher financing costs, recalibrated valuations and persistent uncertainty around commodity prices and the pace of policy reform.

That said, activity remained strategically important and increasingly shaped by energy transition priorities. Investors continued to rotate into power and enabling infrastructure, while oil and gas proved more resilient than many expected, supported by continued demand for energy security and strategic gas infrastructure.

Power and renewables remain the core investment theme

The power sector remained the most resilient segment of UK energy M&A, accounting for over half of total deal value. Activity was driven less by megadeals and more by portfolio moves and minority stakes, particularly in platforms with credible development pipelines or scarce infrastructure exposure.

Notable transactions included Copenhagen Infrastructure Partners' combined £600 million minority investments in Green Generation Energy Networks Cymru Ltd and Bute Energy Ltd, reinforcing sustained institutional appetite for high-quality renewables and power-infrastructure platforms. Schroders Greencoat continued the trend of institutional investors deepening offshore wind exposure through its £456.1 million acquisition of a 24.5% stake in the West of Duddon Sands offshore wind farm. Nuclear also regained momentum as a strategic investment theme, with Centrica's £376 million acquisition of a 15% stake in Sizewell C, one of the year's most high-profile transactions and a marker of the UK's renewed focus on firm, low-carbon capacity.

Storage and flexibility move into the mainstream

Alongside renewables and generation, storage and flexibility continued their shift from "emerging" to "core" investment themes. The rapid expansion of intermittent renewables has exposed the system's increasing need for flexibility – batteries, demand response and peak shaving – and M&A is correspondingly tilting toward these enabling assets rather than pure generation alone. The commercial model for batteries has also matured. While early projects were often anchored in niche ancillary services, utility-scale battery energy storage systems (BESS) are increasingly valued for energy arbitrage and peak shaving as power-price volatility increases.

This has created a more sophisticated business model built on revenue stacking – combining multiple income streams (trading, balancing services, and, increasingly, contracted structures). That shift has made specialist battery developers and management teams with proven delivery and optimisation capabilities particularly attractive targets for utilities and infrastructure funds seeking both pipeline access and operational expertise. A defining transaction in this segment was the £500 million minority investment in Eelpower by a consortium including National Wealth Fund (HM Treasury), Equitix and Aware Super, underscoring how investor interest has broadened from individual assets to scalable storage platforms.

Oil and gas proves more resilient than expected

Oil and gas, meanwhile, defied expectations of structural decline and recorded a surprisingly strong year, accounting for 46% of total UK energy deal value (approximately £2.43 billion across 28 transactions). This reflected continued appetite for assets aligned with energy security and the UK's transitional reliance on gas infrastructure.

The standout transaction was Garden Bidco's £1.5 billion acquisition of National Grid Grain LNG Ltd and Thamesport Interchange Ltd, highlighting sustained investor interest in strategic midstream and LNG-adjacent infrastructure. Beyond that, selective acquisitions across upstream portfolios and services continued to reflect ongoing consolidation dynamics as market participants reshaped UK Continental Shelf (UKCS) exposure under evolving fiscal, regulatory and decommissioning considerations.

Outlook for 2026

Looking ahead to 2026, the opportunity set remains substantial, but delivery constraints and policy clarity will increasingly determine where capital flows. The UK Government has set out an ambitious infrastructure agenda. This includes the 10-Year Infrastructure Strategy (with £725 billion of funding required over the next decade across transport, energy networks, nuclear, water and social infrastructure). It also encompasses major public commitments, such as Sizewell C, early carbon transport and storage network investment decisions, and the operationalisation of Great British Energy backed by £8.3 billion.

At the same time, investors will be navigating a more complex operating environment, with geopolitical instability affecting commodity markets and supply chains, persistent inflationary pressures on construction and capex, and constrained grid capacity delaying both supply-side renewables and demand-side growth, such as data centres.

Authors: Steven Dalton, Sarah Pollock

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.