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20 February 20256 minute read

Energy Transition M&A Outlook 2025

The Energy Transition M&A Outlook 2025 offers critical insights on M&A trends, strategic drivers, and emerging technologies that are shaping a cleaner, more sustainable future. Download your copy today to access:

  • Comprehensive analysis of global transactions
  • In-depth commentary from our internal lawyer survey
  • Full explanation of our data set and methodology

In recent years, the energy transition has emerged as a critical focal point in the global economy, driving transformative changes across industries. Recognizing the significant implications of this shift, we have conducted a comprehensive analysis of the energy transition M&A market to better understand the evolving landscape. This report covers M&A transactions that include, among others, the diversification efforts of the oil and gas industry, the transition of the power industry to renewable and low-carbon generation technologies, mining and processing of critical minerals, and investments in the transportation sector, including electric vehicles (EV) and EV charging infrastructure.

Global M&A overview

In 2024, energy transition M&A reached USD497 billion, representing 13.4% of global M&A activity (USD3.7 trillion). This marks a slight decline from 14% in 2023, attributed to broader market recovery and improved economic conditions. Central banks’ interest rate cuts in late 2024 further supported market growth.

From 2022 to 2024, energy transition deal values showed a consistent upward trend. Modest activity in 2022, impacted by geopolitical tensions and post-pandemic uncertainty, gave way to growth in 2023 as investor confidence improved. The strongest rebound came...

In 2024, energy transition M&A reached USD497 billion, representing 13.4% of global M&A activity (USD3.7 trillion). This marks a slight decline from 14% in 2023, attributed to broader market recovery and improved economic conditions. Central banks’ interest rate cuts in late 2024 further supported market growth.

From 2022 to 2024, energy transition deal values showed a consistent upward trend. Modest activity in 2022, impacted by geopolitical tensions and post-pandemic uncertainty, gave way to growth in 2023 as investor confidence improved. The strongest rebound came in 2024, with lower inflation and better capital access driving larger transactions.

The importance of renewable energy M&A as seen in the report's findings show a critical shift in the market as companies recognize the need for sustainable investments and the significant opportunity that the energy transition offers.
Natasha Luther-Jones, Partner, Global Co-Chair of Energy & Natural Resources and International Head of Sustainability & ESG, UK

Key drivers of energy transition M&A

Different patterns across energy transition sub-sectors were observed. Renewable energy generation transactions saw a decline in the overall share of deal volume and value across the time period analyzed. This trend suggests a maturing market, with major players increasingly focusing on strategic, high-value acquisitions, as well as a shift from the acquisition of assets in operation (higher value transactions) to co-development agreements, acquisition of early-stage projects (lower value transactions) or acquisition of development platforms or portfolio businesses.

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The escalating demand for critical minerals is influencing the M&A landscape, as companies strive to secure long-term supply. Government intervention is creating a complex geopolitical overlay which is shaping the redefinition of markets.
Alex Jones, Partner, Global Co-Chair of Energy & Natural Resources, Australia

Increased demand for critical minerals essential to the energy transition also played a key role in natural resources supply chain transactions. Companies pursued acquisitions that would strengthen their supply chains and secure access to these vital resources. In particular, the energy transition value chain sub-sector saw an increase in both deal volume and value, driven by a variety of factors.

These include a growing focus on energy efficiency to reduce operational costs, manage load growth, and save on energy expenses across various types of equipment. Additionally, the...

Increased demand for critical minerals essential to the energy transition also played a key role in natural resources supply chain transactions. Companies pursued acquisitions that would strengthen their supply chains and secure access to these vital resources. In particular, the energy transition value chain sub-sector saw an increase in both deal volume and value, driven by a variety of factors.

These include a growing focus on energy efficiency to reduce operational costs, manage load growth, and save on energy expenses across various types of equipment. Additionally, the widespread trend toward electrification is accelerating investments in the energy transition value chain sub-sector. Companies are also benefiting from increased opportunities to sell into high-demand sectors such as data centers and new commercial buildings, where energy-efficient solutions are critical.

Strategic rationales for energy transition M&A

Our data shows several rationales behind energy transition deals in the market, including:

  • Optimizing and diversifying corporate portfolios. This often involves selling non-core assets and acquiring assets that align with energy transition goals.
  • The pursuit of operational scalability. Businesses often use M&A to enter new geographic regions or to strengthen their presence in existing markets.
  • Increasing regulatory and public pressure to move towards cleaner energy sources. Many countries have set ambitious targets to reduce their carbon emissions.
In today’s energy landscape, successful M&A strategies must strike a balance between financial performance and sustainability goals. While financial metrics remain critical in evaluating potential deals, the integration of ESG principles is increasingly important.
Tracey Renshaw, Partner, Corporate, UK

Our internal survey revealed two distinct perspectives on the motivations behind energy transition deals, with financial considerations identified as the primary driver:

  • Businesses are emphasizing favorable deal structures and return on investment as critical factors in pursuing energy transition opportunities.
  • They're also recognizing the role of ESG factors. Corporates are becoming increasingly aware that integrating ESG principles into their core strategies can lead to superior long-term results and a competitive ad...

Our internal survey revealed two distinct perspectives on the motivations behind energy transition deals, with financial considerations identified as the primary driver:

  • Businesses are emphasizing favorable deal structures and return on investment as critical factors in pursuing energy transition opportunities.
  • They're also recognizing the role of ESG factors. Corporates are becoming increasingly aware that integrating ESG principles into their core strategies can lead to superior long-term results and a competitive advantage.

 

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Geographical landscape

The Americas led energy transition M&A in 2022–2024, with deal value rising from USD101 billion in 2022 to USD256 billion in 2024. Europe ranked second, contributing 23% of global deal value (USD114 billion) in 2024. While deal volume in Europe surged by 48%, modest value growth reflects a focus on early-stage projects and strategic partnerships.

China’s deal volume dropped 14% in 2024, though deal value remained stable due to large-scale projects in offshore wind, hydrogen, and energy storage. Africa, with the lowest activity, saw a 140% increase in deal value to...

The Americas led energy transition M&A in 2022–2024, with deal value rising from USD101 billion in 2022 to USD256 billion in 2024. Europe ranked second, contributing 23% of global deal value (USD114 billion) in 2024. While deal volume in Europe surged by 48%, modest value growth reflects a focus on early-stage projects and strategic partnerships.

China’s deal volume dropped 14% in 2024, though deal value remained stable due to large-scale projects in offshore wind, hydrogen, and energy storage. Africa, with the lowest activity, saw a 140% increase in deal value to USD12 billion, driven by critical mineral acquisitions.

Each region presents its own unique challenges in the context of the energy transition. The results of our internal survey indicate that grid constraints are the most pressing issue in Europe and in Asia-Pacific, with 87% and 67% of respondents from each respective region identifying it as a significant challenge.

In the US there is a general market expectation that 2025 will be a stronger year for M&A activity across the board, following the elections, and in the renewables sector, notwithstanding electoral comments about the future of the IRA and other government incentives, the impression is that M&A activity will be robust.
Marcello Hallake, Partner, Corporate, US

Energy Transition M&A Outlook 2025

Download your copy today to access:
  • Comprehensive analysis of global transactions
  • In-depth commentary from our internal lawyer survey
  • Full explanation of our data set and methodology
Download the report

Oil and gas companies and other new entrants have been pursuing strategic growth through M&A in the renewable energy generation segment. Many of these companies have set ambitious targets to transform into integrated energy providers, significantly increasing their renewable energy capacities by 2030. This transformation often involves investments in large-scale renewable energy projects, such as offshore wind farms.

Oil and gas companies and other new entrants have been pursuing strategic growth through M&A in the renewable energy generation segment. Many of these companies have set ambitious targets to transform into integrated energy providers, significantly increasing their renewable energy capacities by 2030. This transformation often involves investments in large-scale renewable energy projects, such as offshore wind farms.

The majority of respondents to our internal survey (50%) indicate that new players are entering the energy and natural resources sector through energy transition deals. The primary driver motivating new market entrants seems to be financial metrics (69%), which is understandable given the significant investment required to participate in this sector.

“In the US, a significant uptick is expected for M&A activity in the energy transition space. Private equity and credit opportunities particularly are poised for growth, targeting investments that capitalize on ESG initiatives and federal renewable tax credit monetization strategies.”

Jennifer Wnek, Partner, Finance, US

Looking ahead

Energy transition M&A is poised to continue to grow in 2025 and beyond, driven by several key factors. First and foremost, accelerating decarbonization efforts and ESG imperatives are expected to continue to have a significant impact on M&A activity. In line with an increasing focus on net zero targets by governments and companies, there will likely be growing interest from investors in acquiring and investing in businesses, technologies, projects and asset portfolios embedded in the energy transition and its myriad supply chains.

The overwhelming majority (69%) of...

Energy transition M&A is poised to continue to grow in 2025 and beyond, driven by several key factors. First and foremost, accelerating decarbonization efforts and ESG imperatives are expected to continue to have a significant impact on M&A activity. In line with an increasing focus on net zero targets by governments and companies, there will likely be growing interest from investors in acquiring and investing in businesses, technologies, projects and asset portfolios embedded in the energy transition and its myriad supply chains.

The overwhelming majority (69%) of respondents to our survey believe that there will be more energy transition deal activity compared to other sectors over the next 12 months in 2025.

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“Energy transition M&A is a strategic imperative for an increasingly broad range of market players and is being driven by multiple factors.”

Paul Doris, Partner, Corporate, London

Download the report

If you have questions and comments, or your company is interested in setting up an internal presentation of the report’s results, please contact Nicolas Stofenmacher.