The energy transition is no longer a future aspiration—it’s an unfolding reality that’s accelerating balance sheet decisions, reshaping portfolios, and redefining competitive advantage. So, definitely, for CEOs and CFOs in the energy and cleantech sectors, 2025 is emerging as a pivotal year.
Below are five key strategic themes that are actively shaping M&A behaviour, especially in the mid-cap segment globally:
1. Decarbonization as a capital allocation priority
Climate commitments are translating directly into deal strategy. More than 70% of energy and industrial companies in the G20 now have formal decarbonisation targets, and the market rewards those who can move quickly. Acquisitions are increasingly focused on accelerating ESG delivery, mainly through technologies and platforms that reduce Scope 1 and Scope 2 emissions. In 2024, over $170 billion in global M&A volume was tied to decarbonization-related assets, with a continued upward trajectory expected in 2025. Consequently, firms that treat decarbonisation as a strategic M&A lever—not just a compliance issue—are building durable competitive moats.
2. Renewables remain core, but the winners are selective
Global renewable energy capacity is projected to grow by 2,500 GW over the next five years, with solar and wind comprising 90% of this expansion. However, access to attractive, de-risked assets is tightening. For instance, Europe and Latin America continue to offer scalable opportunities, particularly in secondary market assets with existing PPAs, while the U.S. market is becoming increasingly policy-sensitive. So, investors are likely shifting from land grabs to asset optimisation in a way that prioritises yield, regulatory clarity, and integration potential.
3. Platform acquisitions over asset aggregation
Mid-cap players are aligning capital with long-term operating synergies. For example, the past 12 months have seen a 28% decline in deal volume but a 19% increase in average deal value, signalling a pivot toward fewer, more strategic transactions. However, acquirers are targeting full platforms (e.g., early-stage development companies, grid-scale storage integrators) to embed innovation and secure pipeline optionality. So, a new M&A playbook is expected to favour capabilities over capacity, or in other words, platform acquisitions are becoming the fastest route to transformation.
4. Macro politics reshaping regional risk profiles
The policy environment is exerting an increasing influence on cross-border M&A flows. In the U.S., the recent policy reset has revived investor appetite for natural gas and LNG infrastructure, with over $60 billion in announced deals in the past nine months alone. In contrast, the EU remains anchored to its Green Deal targets, prompting greater scrutiny on fossil-linked assets. Meanwhile, state-driven investment in China and India is accelerating local consolidation, often with limited access to foreign capital. Combining factors, it´s fair to state that geographic diversification now demands a dual lens: regulatory foresight and geopolitical risk mitigation.
5. Technology convergence accelerating deal rationale
The intersection of digitisation and decarbonisation fundamentally transforms the strategic logic behind M&A in the energy sector. What once operated in parallel—technology and sustainability—has now become inseparable and artificial intelligence is driving more innovative and more adaptive grid management. Predictive analytics enable operators to anticipate maintenance needs in renewable infrastructure, reducing downtime and extending asset life, but at the same time, advancements in energy storage are unlocking new levels of flexibility and reliability across the value chain.
This shift is not just technological—it’s financial. In 2024 alone, global investment in critical minerals surged by 30%, propelled by the escalating demand for lithium, nickel, and rare earth elements required to power the next generation of battery systems. So, clearly, strategic acquirers are moving fast, not only for securing physical assets but also for acquiring intellectual property, specialised software platforms, and digital integration capabilities that can future-proof operations and unlock long-term value. In this new environment, technology-driven M&A has moved from being a strategic advantage to a competitive necessity to ensure cost efficiency, system resilience, and long-term positioning in an increasingly complex and connected energy landscape.
These trends highlight a dynamic and evolving mid-cap M&A environment in the Energy & Cleantech sector, driven by strategic investments, technological advancements, and a focus on operational resilience.