Merger and acquisition deals shrink across the renewable sector amid Covid-19 crisis

The sector has noted a 25% drop in deals by the end of 2020’s first quarter, compared to the fourth quarter of 2019

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In light of the ongoing Covid-19 pandemic, merger and acquisition (M&A) deals across the global renewable energy sector have taken a significant hit.

This is according to a report by GlobalData that has noted a 25% drop in deals by the end of the first quarter this year, compared to the fourth quarter of 2019.

Factors such as risk aversion by prospective buyers, financial challenges and approval delays are discouraging developers across the sector.

Somik Das, Senior Power Analyst at GlobalData, said: The ongoing impact of the Covid-19 outbreak on global financial markets is making it harder to establish a financial agreement when it comes to M&As. Existing uncertainty and market volatility make it difficult to analyse the value of a company or asset, which slows down transactions.

“Continuation of the crisis could impact takeovers, with investors re-evaluating potential transactions and stakeholders opting to stack their finances during the lean period.”

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