By David French (Reuters) -BlackRock-owned Global Infrastructure Partners is in advanced talks to buy utility group AES, people familiar with the matter said on Wednesday, a deal that could be one of the largest ever involving a U.S.-listed power company. AES shares soared to close 16.8% higher at $15.37, their highest finish in 11 months, […]
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BlackRock’s GIP in talks to buy power company AES, sources say
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By David French
(Reuters) -BlackRock-owned Global Infrastructure Partners is in advanced talks to buy utility group AES, people familiar with the matter said on Wednesday, a deal that could be one of the largest ever involving a U.S.-listed power company.
AES shares soared to close 16.8% higher at $15.37, their highest finish in 11 months, on the news that was first reported by the Financial Times.
AES carries consolidated debt of around $29 billion, and after Wednesday’s close, its market capitalization stood at $10.94 billion, implying any deal would likely value the company at more than $40 billion.
A transaction could be announced in the coming weeks, according to two of the sources, who cautioned there was no guarantee that an agreement will be reached and talks could still fall through.
The two sources, plus two further sources, all of whom spoke on condition of anonymity to discuss confidential deliberations, confirmed that discussions have been ongoing between AES and GIP in recent months.
AES and GIP declined comment.
Power companies are drawing investor interest as artificial intelligence and data centers drive a surge in power demand, spurring a wave of dealmaking across the sector.
AES, which surpassed Wall Street estimates for its second-quarter profit in July, has experienced significant growth in its renewables unit over the past year. This expansion has been fueled by a global push for cleaner sources of power generation, coinciding with projections that U.S. power consumption will reach record levels.
BlackRock last year acquired GIP for $12.5 billion as part of its move to expand its footprint in infrastructure and private markets.
GIP has a notable track record in the utility space, including teaming up with CPP Investments last year on a pending $6.2 billion take-private acquisition of U.S. utility Allete.
Arlington, Virginia-based AES has power assets on four continents, generating more than 36,000 megawatts, according to its website.
(Reporting by David French in New York and Gnaneshwar Rajan and Mrinmay Dey in Bengaluru, Additional reporting by Ateev Bhandari and Arunima Kumar; Editing by Krishna Chandra Eluri, Mark Porter, Nick Zieminski and Tom Hogue)