BlackRock’s Global Infrastructure Partners is negotiating the acquisition of power utility AES in a deal that could be worth $38 billion. That would make the tie-up one of the largest in history involving a public power utility in the United States, per Reuters.
Media reports on the news cited sources in the know that remained unnamed and that said the deal included AES’s substantial debt load, at $29 billion, per the Financial Times. Its market capitalization, on the other hand, was valued at $9.4 billion at the time the first reports about the talks surfaced. Later, Reuters said AES’s market cap has risen to $10.94 billion, giving the potential deal a total value of over $40 billion.
The reports suggest that BlackRock’s approach is related to the strong growth in electricity demand coming from the booming IT sector thanks to artificial intelligence development and the rush to build data centers to handle AI. AES gas spent a substantial sum of money over the past few years on building low-carbon generation infrastructure, namely wind and solar installations, to supply Big Tech majors concerned about their green energy credentials.
Earlier this year, Bloomberg reported that AES had become the subject of takeover interest from large investment firms and was studying a sale. At the time, the enterprise value of the company was calculated at some $40 billion. It has electricity supply deals with Google, Microsoft, and Amazon, among others. As of July, however, the company’s stock was down 38%. As of this week, the stock is down by close to 23% over the past 12 months, but it rebounded on the news that Global Infrastructure Partners was in advanced talks for the acquisition of the company.
GIP itself became part of BlacRock last year, for a price of $12.5 billion. The company currently manages some $200 billion worth of assets worldwide.
By Irina Slav for Oilprice.com
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