ADVERTISEMENT
January 30, 2012 at 14:42 PM EST
Further M&A and Consolidation Activity Ahead for U.S. Regulated Utilities
Consolidation in the U.S. regulated utility sector will continue at a moderate pace over the next several years, according to a new Fitch Ratings report. The industry’s fragmented structure and the potential to realize meaningful economies of scale will drive further M&A activity, continuing the trends seen in 2010-11. Capital market conditions [...]

Consolidation in the U.S. regulated utility sector will continue at a moderate pace over the next several years, according to a new Fitch Ratings report. The industry’s fragmented structure and the potential to realize meaningful economies of scale will drive further M&A activity, continuing the trends seen in 2010-11.

Capital market conditions are favorable for utilities, with low interest rate and attractive equity valuations providing a favorable backdrop for merger activity.

Fitch believes financial buyers may be more interested in smaller utilities operating primarily in a single state, while strategic buyers pursue larger utility holding companies.

MidAmerican Energy Holdings (MEHC), Xcel Energy (XEL), and NextEra, among others are potential industry consolidators. MEHC, a wholly owned subsidiary of Berkshire Hathaway, operates in multiple jurisdictions with a proven track record in M&A.

Companies with market capitalization of $5 billion and under and book multiples less than 1.3x represent better financing opportunities are more likely acquisition targets. In its report, Fitch has identified 11 regulated utilities that meet these requirements.

For details, see the full report U.S. Regulated Utilities M&A

Technorati Tags: M&A, mergers and acquisitions, MidAmerican Energy, NextEra, utilities, Xcel Energy

Related Stocks:
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here