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The renewable energy sector is expected to see a high level of M&A activity in the next 12 months, despite changes to government incentive schemes in Europe and regulatory uncertainty in the US. This is according to the third edition of M&A in Renewable Energy – Global Outlook 2012, a report published by Rödl & Partner and in association with mergermarket. The research draws from interviews with 100 renewable energy M&A professionals from the corporate, private equity and investment banking communities to examine the challenges, opportunities and underlying deal drivers in the sector. It found that the wind and photovoltaic subsectors are expected to experience the most significant M&A activity, and respondents believe both wind and PV will achieve grid parity as early as 2015 or 2016 in Germany, Italy and Spain. As far as specific geographies are concerned, 46% of respondents expect the highest levels of M&A to come from the Asia-Pacific region, followed by Europe and North America. The experts frequently note rising demand and a desire for energy independence as important motivations for renewable energy development in emerging markets. Respondents expect government support (76%) and cash-rich corporate buyers (47%) to be the most significant external drivers of M&A in the next 12 months. The top internal drivers include acquirers’ appetites for new technology (72%) and their desire to grow market share (62%), followed by attractively low valuations. Recent M&A data shows the renewable energy sector has proved remarkably resilient despite eurozone volatility, constrained bank lending and changes to government incentive programmes. In 2011 the sector saw 210 deals worth €25bn, representing a 135% increase in value and a modest 2% increase in volume against 2010. Access to financing will present the largest obstacle to deal making, according to 49% of respondents. To read the full report, go to: www.mergermarket.com/pdf/RP_Renewables_Outlook_2012.pdf. Other Business Money News
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