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European Infrastructure Deals in 2012 – December 2012

by Julia Goodall

  • 18 Dec 2012
  • INF

The annual number of deals completed by unlisted infrastructure fund managers in European infrastructure assets grew steadily between 2004 and 2009, from 30 transactions in 2004 to 166 in 2009. In the following years, there were slightly fewer deals finalised; 152 in 2010 and 136 in 2011. Issues surrounding the availability of long-term debt financing contributed to the lower level of deal flow as well as continued economic uncertainty within the period after the financial crisis.  Although the decrease in transactions appears to have continued into 2012, deal flow has picked up in the final quarter of the year and deal flow is likely to further improve when more data comes to light in the coming months.

In 2012 to date, 97 European infrastructure deals have been completed, including the acquisition of Edinburgh Airport by Global Infrastructure Partners II from BAA. The £807mn ($1.3bn) deal gave the fund complete ownership of the asset. In other regions, so far this year 53 deals have been finalized in assets located in Asia and Rest of World, and 50 deals have been made by unlisted infrastructure fund managers in North American projects.

When comparing European infrastructure deals to those made in North America, trends between 2004 and the present vary. While European deals peaked in 2009 at 166 deals and have since failed to pass this level, North American asset deals reached a high in 2007 with 81 transactions, and saw a more dramatic decrease following the global financial crisis. However, unlike European deals, deal flow in North America increased from 2009 to 2011 by 43%.

In terms of industry, deals completed in renewable energy assets account for a large proportion of the transactions made in Europe in 2012 to date, with almost a third (31%) in hydro, wind, or solar power. From 2006 to present, there has been a steady increase in deals made in the energy sector across all regions, from 26% of total deals in 2006, to 46% in 2012, suggesting that this sector will continue to be a key area for infrastructure deal flow.

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