Strong growth in M&A deals in China's energy sector The number and amount of investments reached a record high in the first half of the year

According to a recent report released by PwC, the overall growth momentum of M&A transactions in China's energy sector in the first half of 2022 was strong, with a total of 439 investments and a disclosed transaction value of RMB194.
6 billion, an increase of 48% and 52% respectively over the same period in 2021, both reaching a year-on-year record high
.

Liming Zhai, PwC China Energy, Infrastructure and Mining M&A Deal Leader, said: "In the first half of this year, China's energy industry investment and M&A transactions grew strongly, the 'ballast' value of traditional energy was reflected, the 'engine' role of clean energy was more prominent, and a series of emerging technologies
popular among investors emerged in photovoltaics, energy storage, hydrogen energy and other fields.
”

In the first half of this year, clean energy's leading position in M&A transactions in the energy industry was further consolidated, accounting for more than 90% of the transaction value for the first time, and the continued popularity of the clean energy track drove the overall growth
of the number and scale of transactions in the energy industry.
The number of transactions in the traditional energy sector continued to grow, and the average deal size decreased
.
The number and scale of transactions in the power transmission and distribution sector have declined
significantly.

From the perspective of investment direction, China is still the main battlefield for mergers and acquisitions in the energy industry, and the proportion of domestic transactions has increased slightly, with the proportion of transactions reaching 96%; The number of overseas M&A transactions by Chinese enterprises accounted for about 4% in the first half of this year, unchanged from the whole of 2021
.
From the perspective of the types of leading investors, state-owned enterprises are still one of the main participants in M&A activities, and the activity of private enterprises has increased significantly.
Financial investors are relatively cautious
in their participation in M&A transactions.

According to statistics, in the first half of 2022, the trading activity of the traditional energy market remained active, with a total of 52 disclosed transactions with a transaction value of RMB11.
6 billion, of which M&A transactions in the natural gas sector were the most active; The number of transactions in the clean energy sector totaled 378, with a transaction value of 182.
2 billion yuan, and the M&A transactions in the new energy vehicle power supply and energy storage sector were unprecedentedly hot, and hydrogen energy was sought after by investors as an emerging sector
.

PwC believes that the clean energy transition will continue to drive steady growth in
M&A activity in the energy sector.
In the future, mergers and acquisitions in China's energy industry will show some distinctive characteristics: for example, the value of traditional energy "ballast" such as coal and hydropower will be reflected; The rigid demand for new power systems has brought huge market space, driving the upsurge of M&A transactions in the field of equipment manufacturing; The market in the fields of charging and swapping, energy storage, hydrogen energy and other fields has been further opened, and so on
.
(Reporter Gao Shaohua)