Baker Botts Energy Industry Review and Trends 2018/2019

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Baker Botts, Global Law Firm, Energy Sector
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Each year a group of more than 20 leading Baker Botts attorneys, across the firm’s CorporateGlobal ProjectsLitigation, and Tax Practice Groups, take the opportunity to review select electric and gas transactions and other significant industry developments over the past year and offer their insights on what they may mean for the year ahead.

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The deal value of mergers and acquisitions in the U.S. electric and gas (excluding upstream oil and gas) industry during 2018 set a new high-water mark. Deal value in the United States was over $359 billion, well above the $213 billion recorded in 2017.

The entire increase, however, was the result of increased activity in the midstream, pipeline and MLP space where transaction value was over $285 billion, more than twice the value recorded in any previous year. As discussed in more detail in the report, two factors were driving this extraordinary transaction value – MLPs being acquired by their sponsors and continued consolidation in the sector. Transactions among regulated electric utilities decreased slightly to $32.7 billion from $36.5 billion in 2017. The two largest transactions involving regulated electric companies were Dominion Energy’s acquisition of SCANA Corporation and the acquisition of Vectren Corporation by CenterPoint Energy. Among LDCs, the value dropped to $4.8 billion from a relatively high $8.6 billion in 2017.

The only major LDC transaction announced in 2018 was the acquisition of Pennsylvania Natural Gas by Aqua America from SteelRiver Infrastructure Partners. Deal value for electric generation assets fell dramatically to $7.3 billion from $32.5 billion in 2017 due to the absence of any major transactions, like Calpine’s going private transaction and the merger of Dynegy and Vistra Energy, both of which were announced in 2017. Deal value for renewable generation assets jumped to $21.4 billion in 2018, up from $13.1 billion in 2017, which in turn was a significant increase from $6.6 billion in 2016. The water sector was unusually active during 2018 with a deal value over $6 billion, most of which was accounted for by the struggle for control of Connecticut Water Service and SJW Group. A number of these transactions are discussed in more detail in the report.

The Report covers:

  • Mergers & Acquisitions
  • Regulated Utilities
  • Independent Power Producers and Generation Assets
  • Master Limited Partnerships and YieldCos
  • Renewables
  • Tax Reform Act’s Impact on Renewables
  • Environmental Regulation and Litigation
  • Liquified Natural Gas
  • Project Finance
  • Latin America and the Caribbean
  • Africa

Click here to view the full report

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