Energy transition contributed to M&A activity in 2022


Despite a declining M&A market, energy transition has been a key driver of the M&A market in 2022.

After a record year in 2021, the French M&A market was strongly impacted in 2022 with a drop in announced volumes of c.40%, in a challenging macro-economic context (rising interest rates, inflation, geopolitical tensions, etc.). The volatility of capital markets (debt and equity) has led companies and financial sponsors to be cautious in pursuing major acquisition or disposal projects. As a result, there were no transaction with a valuation of more than €10 billion in France this year, a particularly unusual situation.

However, some specific trends are supporting the level of activity. The theme of energy transition, including renewable energies and hydrogen, was the source of several transactions, both for majority and minority stakes. This theme is relevant both for companies wishing to develop their renewable energy projects or "make greener" their business portfolio, and for financial sponsors and insurance companies wishing to increase their exposure to this type of sustainable investments. The impact of energy transition goes beyond renewable energies and has become relevant for all companies contemplating an evolution of their business models in line with ESG criteria, such as automotive players who are making targeted acquisitions to remain competitive in a context of increased electrification of mobility solutions.

In many ways, the increased digitalization of business models is also prompting many players, including "industrial" players, to acquire targets, large or small, offering technological skills and enabling them to accelerate digitalization strategies.

Societe Generale has been very active in this environment with a strong level of activity in 2022, despite the global slowdown in M&A activity. The bank participated, among others, as advisor to APE (the State Shareholding Agency) on the delisting of EDF, as advisor to Vivendi on the Lagardere situation, as advisor to KKR in the take-private of renewable energy provider Albioma, as well as advisor to New Suez on the acquisition of its former UK activities from Veolia. 

Societe Generale also advised Air Liquide, TotalEnergies and Vinci on the creation of Hy24, a €2 billion investment fund, managed by Ardian, the largest investment fund dedicated to the development of hydrogen infrastructure.

Patrick Perreault