Energy transition and infrastructure M&A

September 2026  |  BRIEFING ROOM | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

September 2026 Issue

FW discusses the energy transition and infrastructure M&A with Jonathan See at McCarthy Tétrault LLP, Frank Aquila at Sullivan & Cromwell and Thyl Hassler at White & Case LLP.

FW: How is the energy transition reshaping global M&A strategies across infrastructure and energy assets today?
See: Decarbonisation strategies remain important, and renewable energy investment continues to attract attention, but strategics and financial sponsors are increasingly focused on the infrastructure needed to support a more electrified and digital economy. M&A has broadened beyond decarbonisation to include grid expansion and reliability, energy security and the power generation and transmission requirements associated with artificial intelligence (AI) infrastructure, data centres and industrial reshoring, alongside the critical minerals needed to support broader electrification. Electrification of transportation, buildings and industry combined with growth in data centres is accelerating electricity demand, which is now growing by nearly 4 percent annually in North America after two decades of largely flat electricity consumption. This trend is playing out globally and fundamentally shifting the economy. Market participants are favouring opportunities that offer more durable and rateable cash flows, scale, long-term relevance and greater execution certainty, with development and other risks increasingly important to how opportunities are evaluated and underwritten.

Hassler: Global M&A is being fundamentally shifted by the energy transition. In the infrastructure and energy sector, capital is reallocated from fossil energy classes toward other core infrastructure asset classes such as renewables, grids, battery energy storage systems (BESS) and green hydrogen, but also toward so-called ‘hybrid’ asset classes – asset classes that do not entirely fit into traditional infrastructure asset classes but have many qualities attractive to infrastructure investors. Renewable energy assets have become core infrastructure investments, commanding premium valuations due to stable, contracted cash flows, while high-carbon assets face structural devaluation and complex liability negotiations. Buyers, including strategics, energy majors, infrastructure funds and utilities, are aggressively acquiring clean energy platforms and divesting carbon-intensive portfolios. New asset classes such as electric vehicle (EV) charging, carbon, capture, utilisation and storage (CCUS), grid infrastructure and critical minerals – including lithium and cobalt – are generating significant deal activity. Likewise, the aforementioned ‘hybrid’ asset classes are increasingly targeted by investors. From a legal point of view, transactions now require deeper diligence on permitting risk, regulatory changes and environmental, social and governance topics. Regulatory topics, such as foreign investment, add certain execution risks to cross-border deals if not assessed diligently. Overall, there is a transition from pure single-asset acquisitions to scalable, accretive platform strategies. Additionally, a resurgence of larger cap transactions as well as a robust mid-market in the energy and infrastructure space can be observed.

Aquila: The defining change is that the energy transition is no longer primarily a decarbonisation story. It is an electricity supply story. Global energy transition M&A volumes fell roughly 15 percent in 2025, while aggregate deal value rose more than 20 percent to around $599bn. That divergence tells us most of what we need to know: fewer transactions, materially larger ones and far greater selectivity. Buyers are paying for operating assets, grid connection and contracted cash flow rather than development pipelines, because interconnection queues and permitting timelines have made M&A the fastest route to deliverable capacity. In practice, that has pushed strategy in two directions at once: utilities and majors consolidating for scale, and infrastructure capital moving down the value chain into transmission, storage and services. The mandates I see now begin with reliability and deliverability. Carbon is a constraint to be managed, not the organising thesis.

FW: How are investors thinking about capital deployment across the energy transition value chain, particularly when balancing immediate yield against long-term growth opportunities?

Hassler: Investors are naturally operating in the tension between yield and long-term growth across the value chain. Operational assets – such as contracted solar, wind and storage facilities – generally offer stable, inflation-linked returns which are attractive to infrastructure investors prioritising near-term yield. Development-stage assets, including greenfield hydrogen, CCUS and offshore wind pipelines, offer higher long-term upside but carry significant permitting, technology and merchant price risk. Most sophisticated investors are adopting a barbell strategy – generally anchoring portfolios in yielding operational assets while selectively allocating growth capital to earlier-stage platforms with scalable pipelines. Generally, infrastructure funds are also increasingly building vertically integrated platforms – spanning generation, storage and grid services – to capture value across the chain and reduce single-point exposure.

Aquila: What I see is a barbell. On one side, core and core-plus capital competing hard for operating, contracted assets, grid-connected generation, transmission, midstream, storage wrapped in 10 to 20-year tolling or capacity agreements. Those clear at full infrastructure multiples because the cash flow is bankable. On the other, growth exposure to storage platforms, advanced nuclear and grid services, but taken through structures rather than outright ownership – staged commitments, milestone-linked consideration, preferred equity, minority positions alongside strategics and private credit. Development-stage risk is being repriced far more aggressively than operating risk, because interconnection, permitting, offtake pricing and construction are all being discounted at once. The discipline is to price the yield honestly and buy the growth optionality cheaply – not to pay a growth multiple for a yield asset.

See: Investors are navigating this dynamic environment with a strategic and diversified approach, balancing growth opportunities with resilience to mitigate risks. On one side, utilities, transmission networks, operating renewables, contracted storage and select natural gas infrastructure assets can offer greater cash-flow visibility and downside protection through regulated or contracted revenues. At the same time, batteries, grid modernisation, critical minerals, electrification technologies, artificial intelligence (AI) infrastructure and emerging low-carbon technologies offer investors greater upside exposure to structural demand growth, which is currently surging. The appropriate portfolio mix will vary by investor, mandate, time horizon and risk appetite. It is less about choosing between yield and growth than constructing a portfolio that delivers the right balance, with risk and return assessed across different stages of the investment cycle.

FW: Which specific subsectors are currently attracting the strongest investor interest? What is driving that demand?

See: The strongest investor interest is currently centred on transmission and distribution networks, energy storage, power generation assets including nuclear and natural gas infrastructure, and the broader infrastructure supporting AI and data centres. Demand is being driven by a combination of rising electricity consumption, supply constraints and the growing need for reliable, dispatchable power. Growth in AI and data centres is intensifying those requirements and increasing the need for both generation capacity and the infrastructure required to deliver it. Roughly half of US electricity demand growth to 2030 is expected to come from data centres, and meeting that demand requires massive capital. Critical minerals central to the energy transition, particularly copper, are also attracting significant attention. The supply chain conversation now extends beyond battery materials to grid infrastructure, defence applications and advanced manufacturing. Together, these fundamentals are creating opportunities for sustained investment and M&A activity across infrastructure and energy. Canadian and provincial government policy supports and, in some cases, encourages this investment, and Canada is increasingly leaning into attracting both domestic and foreign investment in energy and infrastructure as part of its strategy to grow the Canadian economy and help defend against rising global tariff pressures and other geopolitical risks, even as demand is increasingly being driven by commercial fundamentals.

Aquila: Four subsectors stand out. Power and utilities leads on value. The proposed NextEra/Dominion combination alone accounted for more than half of the sector’s deal value in the first five months of 2026. Gas infrastructure is close behind – liquified natural gas (LNG), midstream and gas-fired generation – on the view that the demand is durable and the supply routes are not. Third, transmission and grid services, where scarcity of interconnection capacity has become the binding constraint on every other thesis. And fourth, standalone battery storage, which is now treated as primary infrastructure rather than an adjunct to solar, with premiums accruing to platforms that have wrapped capacity in long-dated tolling agreements rather than merchant arbitrage. Nuclear sits alongside all of it. The common driver is dispatchability. AI-driven load growth has put a price on firm, round the clock capacity and buyers will pay for what already exists.

Hassler: There is specific investor appetite in BESS, grid, digital infrastructure, data centres and offshore wind. BESS is driven by improved project economics and reduced costs, co-location with solar assets, grid-stability needs and revenue-stacking opportunities. Activity around grids is motivated by capital needs for modernisation – including transmission, substations and interconnectors as critical bottlenecks – suitability for regulated-return investors and strong downside protection due to ‘monopoly’ characteristics. Digital infrastructure and data centres are also attracting investors due to the enormous AI-driven compute requirements and clean energy supply needs, power procurement as strategic priority and the location of data centres with dedicated renewables generation strategies. Despite some recent challenges and large project cancellations, offshore wind generally remains attractive globally for large capital pools with governments pursuing build-out targets, particularly in the European Union (EU) and the UK. Other assets in the energy and utilities space are also relevant, such as district heating and heat network, due to their predictable revenue profile and natural monopoly character, with consolidation opportunities for investors seeking to scale. Apart from these core-infrastructure asset classes, there is significant investor interest in ‘hybrid’ infrastructure assets, such as reusable assets and asset pooling.

FW: How are long-term investors such as infrastructure funds and sovereign wealth funds adapting their acquisition strategies in this environment?

Aquila: Long-term investors have moved from buying assets to building platforms, and from fund exposure to direct and co-investment. Sovereign investors are the clearest example. Roughly 80 percent now identify energy security and transition infrastructure as the most credible way to make a portfolio resilient, and infrastructure has reached around 9 percent of sovereign wealth fund (SWF) assets. What has changed is how the exposure is taken – large minority stakes with negotiated governance rights rather than control, consortia that dilute single-asset concentration, with the joint sovereign positions in European grid infrastructure as the template, and longer holds, with capital reserved for follow-on buildout rather than an exit-driven horizon. Several Gulf funds are also deliberately absorbing first-mover risk in less mature technologies. For sellers, that means a different negotiation, in which governance, reserved matters and funding obligations do more work than headline price.

Hassler: Infrastructure funds and SWFs are increasingly acquiring scalable development platforms rather than single assets. Likewise, rather than relying on passive, core-asset acquisitions, infrastructure funds and SWFs are also moving toward core-plus and value-add strategies, with returns increasingly underwritten through active capital expenditure programmes and operational improvement. Some investors are increasingly committing capital at an earlier stage – before an asset is fully developed – and at structural intersections to benefit from compounding tailwinds. To deploy larger cheques while managing concentration risk, investors are syndicating large deals through consortia and co-investments. SWFs are simultaneously scaling co-investments and selective direct buyouts to increase control. Deal terms have tightened in response to the higher cost of capital, with lower leverage ratios and greater use of hedging instruments. Secondaries, continuation vehicles, net asset value facilities and hybrid equity structures are being deployed to manage longer holding periods and address liquidity pressure across maturing portfolios. Investors are also diversifying their investments geographically to mitigate regulatory risks and to access greater transition opportunities.

See: Investors are placing greater emphasis on execution certainty and scalable platforms. Acquisition strategies are becoming more selective, with greater use of joint ventures, platform strategies, consortium arrangements and minority investments, particularly for larger, capital-intensive infrastructure opportunities. These structures allow investors to pursue substantial transactions while sharing risk and capital requirements and managing their exposure over a long-term investment horizon. Capital recycling is also prominent, with mature assets sold and proceeds redeployed into areas with stronger growth potential. For infrastructure funds and sovereign wealth investors, this reflects a broader range of approaches to deploying capital and managing portfolios, while continuing to pursue major infrastructure transactions.

FW: To what extent are geopolitical developments and energy security concerns influencing transaction structuring and asset selection?

Hassler: Geopolitical tensions and energy security concerns are the primary drivers of both asset selection and deal structuring. For example, the Russia-Ukraine conflict accelerated European LNG terminal investment and grid diversification programmes, while the US Inflation Reduction Act’s incentives have redirected capital toward onshore supply chains. Buyers are prioritising assets in stable jurisdictions where supply reliability carries strategic as well as financial value. As regards structuring, closing certainty has become a dominant concern – driving broader antitrust, foreign direct investment and national security conditions, including heightened Committee on Foreign Investment in the United States (CFIUS) scrutiny in the US and expanded foreign investment screening under EU and UK frameworks, extended long-stop dates, tighter ‘hell or high water’ mechanics, and reverse break fees where regulatory approval is uncertain.

See: Energy security has become a major value driver rather than simply a risk consideration. Assets that deliver dispatchable power, domestic supply or critical system capacity are increasingly attracting strategic value beyond their more immediate financial returns. That is supporting interest in natural gas and LNG infrastructure, generation, transmission and other critical energy infrastructure. Geopolitical uncertainty is also influencing how transactions are evaluated and executed. Commodity volatility, supply chain exposure and evolving regulatory requirements can affect valuation, diligence and deal certainty, particularly in cross-border transactions. These factors are not necessarily constraining M&A, but they are changing the assessment of risk and strategic value. Assets that provide secure supply or critical capacity are strategically important in an uncertain environment.

Aquila: Geopolitical developments and energy security concerns are heavily, and increasingly, at the structuring stage rather than as a closing condition. Escalating tension in the Middle East, concern over the Strait of Hormuz and fractures within OPEC+ have reinforced a preference for domestically anchored supply and for assets not exposed to a single chokepoint. On the regulatory side, the Fiscal Year 2026 National Defense Authorization Act effectively reclassified grid modernisation, storage and critical minerals as strategic rather than purely commercial assets, and CFIUS now looks past ownership percentages to non-controlling rights, land interests near sensitive sites and supply chain composition. The practical consequences will be familiar to anyone doing cross-border work. National security diligence starts before the term sheet. Foreign investors accept passive structures, governance carve-outs and information firewalls to stay outside mandatory filing triggers. Outside dates have lengthened. And the allocation of regulatory risk is now among the most negotiated economics in the deal.

FW: Do you expect to see increased consolidation across specific energy and infrastructure subsectors? What factors are likely to drive or constrain that trend?

Aquila: Consolidation is expected, and in three places. First, with regulated utilities, where the capital programme required to serve load growth simply cannot be funded at subscale and affordability commitments have become part of the price of approval. Second, with independent power producers and renewable development platforms, where a shakeout is already under way: developers that safe-harboured projects ahead of the construction-commencement deadline will trade at a premium, and a number of those who did not will be absorbed. And thirdly, midstream, where system contiguity drives value. Tax changes help – restored bonus depreciation and the reversion of the interest limitation to an earnings before interest, taxes, depreciation and amortisation standard materially expand tax-efficient debt capacity for capital-intensive buyers. The constraints are not financial. They are state commission approvals, which set the clock in utility deals, Federal Energy Regulatory Commission and antitrust review in concentrated power markets, and persistent bid-ask gaps on development-heavy portfolios.

See: We expect further consolidation, but it will be selective and concentrated in areas where the investment requirements are significant. Power and grid infrastructure are obvious examples, given the need to expand and modernise existing systems and the substantial capital required. Investors are also using consolidation strategies to build scaled platforms and position those businesses on a path to a successful exit. M&A can provide faster access to operating assets, capabilities and development pipelines than pursuing new development independently. Constraints include antitrust and foreign direct investment regulatory considerations, as well as the challenge of finding the right asset mix to create a coherent and attractive consolidation platform. Acquisitions and divestitures by energy companies should also continue to bring assets to market and create opportunities for strategic buyers and long-term capital from financial sponsors. The pace will vary by subsector and market. Financing costs, valuation gaps and regulatory scrutiny remain important considerations, while permitting and interconnection constraints can affect timing, cost and execution. These dynamics should continue to create opportunities for M&A, particularly where acquisitions can accelerate growth or provide access to existing critical infrastructure.

Hassler: Throughout the market, consolidation is accelerating across several energy and infrastructure subsectors, while resource-secured assets command higher premiums. Execution certainty has become a decisive factor for transactions, particularly where permitting delays and grid-connection queues represent the primary constraints on value delivery. Scaled platforms with integrated development and procurement capabilities are consequently better positioned to navigate these bottlenecks and absorb delivery risks. Germany is seeing onshore wind repowering portfolios aggregated into scalable platforms through acquisitions and large-scale platform financings as demonstrated by some larger transactions in the market recently. More broadly across Europe, deal activity in onshore wind is shifting toward operating portfolios as acquirers prioritise derisked cash flows. The strong investor demand for BESS is now translating into accelerating market conditions: BESS already dominates European storage M&A by volume, and deal activity is rising rapidly as grid operators and utilities seek firming capacity alongside intermittent renewables. EV charging consolidation is, in contrast, advancing more selectively.

FW: How are companies using M&A, partnerships and platform strategies to position themselves for long-term strategic growth in the energy transition?

See: Investors increasingly underwrite platforms rather than standalone assets. This strategy is about establishing a strategic foothold in a structurally growing market and then expanding over time through add-on acquisitions, development projects and partnerships. Partnerships can also bring together capital, technology and expertise, share execution risk and accelerate value-creation strategies. The growth of AI and data centres is also creating new coalitions of buyers, investors and strategic partners that would have been unusual a few years ago. Utilities, infrastructure and pension funds, technology companies and large energy users are increasingly collaborating around power supply, grid capacity and related infrastructure. Acquisitions, joint ventures and other partnerships provide different routes to participate in these opportunities as demand evolves across the sector.

Hassler: Investors are increasingly acquiring scale and deployment-ready pipelines – including waiting list positions for grid interconnection to secure faster access to the grid and to avoid lengthy approval processes – through platform acquisitions rather than single-asset deals. Infrastructure funds in particular pursue such platform approaches, acquiring anchor assets and systematically execute bolt-on acquisitions to build scale, operational expertise and commercial leverage across a subsector. Platform strategies create repeatable acquisition and financing frameworks that reach beyond generation into storage and other enabling infrastructure. Partnerships and joint ventures – frequently structured as minority stakes – serve a dual purpose: sharing capital and financing risks while combining complementary development, engineering, procurement and construction and offtake capabilities across the value chain.

Aquila: M&A use is sequenced, and with different instruments for different risks. Control M&A is being used for genuinely scarce input: interconnection rights, brownfield industrial sites, operating nuclear and gas capacity. Technology buyers acquiring legacy sites largely for the queue position they carry is now a recognisable deal type. Partnerships and joint ventures carry the technology and construction risk nobody wants alone on a single balance sheet. As of May 2026, there were some 13 announced projects committing close to 10 gigawatts of nuclear capacity to data centre demand, and effectively all of them are utility, developer and offtaker structures rather than acquisitions. Platforms do the repeatable work: buy a management team and a pipeline once, then bolt on. The most interesting variant is the augmentation trade – acquiring vintage solar to retrofit storage at an existing point of interconnection, which buys around the queue entirely.

FW: Where are the most significant opportunities likely to emerge over the next 12-24 months?

Hassler: In traditional sectors, the expectation is that the following asset classes will present opportunities. Grid infrastructure will force accelerated capital deployment due to its chronic underinvestment and renewable connection backlog. Investments in BESS assets will be driven by the substantial need for storage capacity to secure grid stability. AI-driven demand will continue to accelerate investments in data centre infrastructure due to the enormous need for computing capacities. And lastly, some areas in distress, such as fibre, will present market opportunities, creating attractive entries below peak valuations. It is also expected that infrastructure funds will increasingly pursue opportunities in the ‘hybrid’ infrastructure sector – targeting assets that provide certain mission-critical services that are essential to the key sectors or benefit from resilient long-term demand.

Aquila: I foresee four significant opportunities. In rough order of conviction, first, the sorting that follows the construction-commencement deadline: safe-harboured portfolios will command premiums and the assets behind them create a genuine buyer’s market in development-stage risk. Second, transmission, grid equipment and grid services – the least glamorous part of the chain and the hardest constraint on every other thesis. Third, structured capital into capital-hungry platforms. Record sponsor dry powder is arriving as preferred equity, private credit and minority stakes rather than control buyouts, and that is where the interesting negotiation now sits. Fourth, the nuclear shakeout, in which credible designs with real delivery partners consolidate the speculative ones. The entry point for that is the next 18 months. I would also watch carve-outs, as utilities and majors funding load growth and LNG commitments sell good non-core assets.

See: The strongest opportunities are likely to emerge where demand is running ahead of existing infrastructure. Technology and power are at the centre of that equation. AI and data centre growth are increasing electricity requirements and creating investment needs across generation, transmission and grid infrastructure. Natural gas should also attract investment, given its role in supporting reliability as renewable generation expands. These dynamics should create opportunities for private capital to build and expand businesses through acquisitions, development and partnerships. Over the next 12 to 24 months, we expect the most compelling opportunities to be assets and businesses that address an infrastructure constraint, provide reliable capacity or offer access to infrastructure in markets where demand is growing fastest.

As co-head of McCarthy Tétrault’s national M&A and private equity groups, Jonathan See advises many of the world’s largest sponsors and strategics on complex and transformative transactions in Canada and internationally. Chambers-ranked and widely recognised as one of Canada’s leading M&A and private equity lawyers, he acts on sophisticated domestic and cross-border mandates across infrastructure, energy, resources, technology and other sectors driving private capital investment. He can be contacted on +1 (416) 601 7560 or by email: jsee@mccarthy.ca.

Frank Aquilla is Sullivan & Cromwell’s senior M&A partner and has served the firm in numerous senior management positions, including as a member of the management committee, as global head of the M&A practice and as co-managing partner of the general practice group. As a leader in his field, he has advised numerous clients in many of the largest and most important global transactions that have been transformational across a range of business sectors‎. He can be contacted on +1 (212) 558 4048 or by email: aquilaf@sullcrom.com.

Dr Thyl Hassler advises financial sponsors, infrastructure funds, sovereign wealth funds and other investors in the energy and infrastructure sector on domestic and cross-border M&A transactions, carve-outs, co-investments, the formation of domestic and cross-border joint ventures, as well as strategic alliances across a broad range of core asset classes including energy, utilities, power, renewables, transport, digital and hybrid infrastructure assets. He can be contacted on +49 211 49195 343 or by email: thyl.hassler@whitecase.com.

© Financier Worldwide

THE PANELLISTS

Jonathan See

McCarthy Tétrault LLP

Frank Aquila

Sullivan & Cromwell

Thyl Hassler

White & Case LLP