Monday, November 7, 2016

Power And Utility Deals -- Summary -- 3Q16

Staggering. That's all I can say about this graph. Compare the graph below with the labor force participation graph. Wow. Apples and oranges. But it sure speaks volumes.

The graph above is for the past ten quarters, including the most recent quarter. 3Q16 was the strongest quarter by far.

$78 billion in 3Q16 deals simply dwarfs the previous "records" set back in 3Q15 and 1Q16.

But then take another look. 2016 as a whole knocked "it" out of the ballpark:
  • 2016: 78+28+41 = $147 billion in deals (and that does not include the 4th quarter, still to come)
  • 2015: 12+45+3+7 = $67 billion
In fact, the $67 billion in all of 2015 was less than the most recent since quarter (3Q16).

I assume the "deal volume" (grey line) was all deals whereas the red bar graphs included only those deals great that $50 million. One wonders if the larger number of deals in 4Q14 were small wind and solar deals made to take advantage of expiring tax credits.

The story is at PwC Deals: The key announced transactions in 3Q16(some business names were abbreviated):
  • Enbridge agreed to acquire Spectra in an all - stock takeover ; the transaction is valued at $ 47.0 billion
  • NextEra definitively agreed to merge with the bankrupt Energy Future Holdings, a Dallas - based electric power distributor, for $ 18.7 billion
  • Southern Company acquired a 50 percent interest in Southern Natural Gas Company from Kinder Morgan Energy Partners for $2.7 billion
  • A joint venture owned by Blackstone Group  and ArcLight Capital Partners agreed to acquire four power plants of American Electric Power Co., for $2.2 billion. 
  • Columbia Pipeline Group, Inc. planned to acquire a 53.5 percent interest in the Houston - based Columbia Pipeline Partners for $2.1 billion
  • DTE Energy Company agreed to acquire a 55 percent interest in the Stonewall Gas Gathering System from M3 Midstream  ( 40 percent) and Vega Energy Partners ( 15 percent). Concurrently, DTE Energy Company acquired the Appalachia Gathering System of M3 Midstream. The combined transaction was valued at $1.3 billion
It should be noted that the data includes all power sources: fossil, nuclear, hydroelectricity, wind, and solar. One might want to go through the list above and note the nuclear, wind, and solar deals.

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