2012-09-26 05:21:32 - Nuclear Energy Quarterly Deals Analysis: M&A and Investment Trends - Q2 2012 - a new market research report on companiesandmarkets.com
M&As and asset transactions in the nuclear energy industry registered a significant decrease in deal value with $643.4m in Q2 2012, as compared to $1.3 billion in Q1 2012, the prime reason can be traced down to Poland´s Treasury Ministry sale of 7% stake in PGE Group for $795m recorded in Q1 2012. The number of deals also decreased from 29 in Q1 2012 to 26 in Q2 2012.
The industry registered two high-value deals of over $100m in Q2 2012, which accounted for almost 82% of the total deal value in the quarter. North America accounted for 42% of the total M&A deals with 11 deals in Q2 2012, down 27% from the previous quarter´s count of 15 deals. M&A
deals in Asia-Pacific remained unchanged with eight deals each in Q1 2012 and Q2 2012.
The uranium mining & processing sector registered 22 deals worth $531.6m in Q2 2012, as compared to 26 deals worth $670.2m in Q1 2012, indicating a decrease of 15% and 21% in the number of deals and deal values respectively. Temasek Holdings´s acquisition of 5.5% stake in Ivanhoe Mines for $426m, Cape Lambert Resources´s proposed sale of Cape Lambert Leichhardt for $25.2m, and Cameco´s agreement to acquire 70% interest in Halliday and Stewardson Projects from Uravan Minerals for $22.2m were some of the notable asset transactions recorded in Q2 2012.
The ongoing slowdown reflects investors´ concerns with the availability of finances and safety issues in efficiently operating the plant. The nuclear reactors in the US and Asia- pacific countries have already been operating form past 30-40 years. Most of these reactors have been granted life extension for another 10-20 years only after proper measures are undertaken for their refurbishment depending on their age and operating conditions. Investors are therefore avoiding going ahead in conducting any asset transaction deals keeping in mind that the criticalities in defining the scope of activities and the finances involved may hamper their target return on Investment.
New Investments Decline In The Nuclear Energy Industry In Q2 2012
Investments in nuclear energy companies, including new investments through equity/debt offerings and financings by PE/VC firms, recorded a substantial decrease of 47% in deal value with $17.9 billion in Q2 2012, as compared to $33.8 billion in Q1 2012, the large difference can be accounted to capital raising through debt instruments by some of the renowned companies, such as BHP Billiton, EDF, Enel and Rio Tinto. The number of deals has also registered a 19% decrease from 134 in Q1 2012 to 108 in Q2 2012.
The majority of investments have been raised from the debt market and reached $17.1 billion in Q2 2012, accounting for 96% of new investments in the sector. Capital raising, through debt offerings, by companies in Europe registered a significant decrease in the number of deals and value, with 11 deals worth $7.4 billion in Q2 2012, as compared to 26 deals worth $18.9 billion in Q1 2012. Global equity offerings, including initial public offerings (IPOs), secondary offerings, and private investment in public equities (PIPEs), registered a decrease of 10% in deal value and 11% in the number of deals with $841.8m from 71 deals in Q2 2012, as compared to $930.6m from 80 deals in Q1 2012. Companies in Asia-Pacific recorded the majority of equity offering deals with 39 in Q2 2012, followed by companies in North America with 28 deals.
The political motivation and support required to encourage new investment have been lacking across regions due to negative public opinion. Though government of few countries are interested in carrying on with nuclear programs but high degree of due diligence in finding out the right technological partner with rich financial that can support government nuclear plan while ensuring the safety standards can be cited as responsible for the recent slowdown.
Decreased Financing Through Debt & Equity Offerings In Q2 2012
Global debt offerings, including public and private debt placements, by nuclear energy companies registered a substantial decrease of 48% in deal value with $17.1 billion in Q2 2012, as compared to $32.9 billion in Q1 2012. The deal value in Q1 2012 was driven largely by some of the large companies such as BHP Billiton, which made five debt offerings for aggregate gross proceeds of $5.25 billion; Electricite de France´s four debt offerings for aggregate gross proceeds of $5 billion; Enel´s two debt offerings combined worth $4 billion; and Rio Tinto´s four debt offerings for aggregate gross proceeds of $2.5 billion. The number of deals also registered a decrease of 32% with 36 deals in Q2 2012, as compared to 53 in Q1 2012. Public debt offerings registered a significant decrease in the number of deals and deal value with 30 deals worth $15.9 billion in Q2 2012, as compared to 42 deals worth $29.4 billion in Q1 2012, while private debt placements decreased from 11 deals worth $3.4 billion in Q1 2012 to six deals worth $1.2 billion in Q2 2012.
Global equity offerings, including initial public offerings (IPOs), secondary offerings, and private investment in public equities (PIPEs), registered a decrease of 11% in the number of deals and 10% in deal value with 71 deals worth $841.8m in Q2 2012, as compared to 80 deals worth $930.6m in Q1 2012.
PIPE segment registered 53 deals accounting for 75% of the total deals in Q2 2012, down 18% from 65 deals in Q1 2012. Deal values also registered a decrease from $338.7m in Q1 2012 to $172.8m in Q2 2012. However, secondary offerings registered an increase in the number of deals and deal values with 18 deals worth $668.9m in Q2 2012, as compared to 15 deals worth $591.9m in Q1 2012.
Slow phase in government nuclear programs and rising public concerns has been a primary reason for investors to take a halt in raising capital from the market and equity investors which demands higher returns for higher risks attached with successful implementation of the nuclear project over the long run. Debt financing has therefore formed a major part of the financing done for an already slow paced industry.
Investments Plummet In North America, Europe And Asia-Pacific In Q2 2012
North America, Europe and Asia-Pacific recorded a significant decrease in deal values with $6.3 billion, $7.4 billion and $4.8 billion in Q2 2012, as compared to $9.1 billion, $19.7 billion and $6.4 billion respectively in Q2 2012. The number of deals in these regions also decreased from 67, 33 and 61 deals in Q1 2012 to 57, 17 and 57 deals respectively in Q2 2012.
Australia recorded considerable nuclear power activity in the Asia-Pacific region, accounting for 93% of the number of deals with 53 deals in Q2 2012, while Canada recorded considerable nuclear power activity in North America, accounting for 58% of the number of deals with 33 deals in Q2 2012.
Tight market situation in terms of availability of finance, interest rate and in accessing the right partner resulted in decreased investment across the region, Moreover, a negative sentiment towards nuclear power still seems to prevail in European countries, with Germany announcing a complete nuclear phase out by 2022, followed by nuclear phase out recommendations by the Swiss government cabinet. Italy is also abandoning any further developments in this sector. However, other European countries such as the UK, France and Czech Republic are supportive towards the continued use of nuclear power, due to their high reliance on it as an energy source. The decrease in investment in North America and Europe may not sustain for long given the need of clean power and soaring fossil fuel prices.
This report is an essential source of data and trend analysis on mergers and acquisitions (M&As) and financing in the nuclear energy market. The report provides detailed information on M&As, equity and debt offerings, private equity and venture capital (PE/VC) and partnership transactions that occurred in the nuclear energy industry in Q2 2012. The report provides detailed comparative data on the number of deals and their value in the five preceding quarters, categorized into deal types, segments and geographies. The report also offers information on the top advisory firms in the nuclear energy industry.
- Analyze market trends for the nuclear energy market in the global arena
- Review of deal trends in uranium mining & processing, equipment and services, and power generation markets
- Analysis of M&A, Equity/Debt Offerings, Private Equity, Venture Financing and Partnerships in the nuclear energy industry
- Summary of nuclear energy deals globally in the last five quarters
- Information on top deals happened in the nuclear energy industry
- Geographies covered include â North America, Europe, Asia Pacific, South & Central America, and Middle East & Africa
- League Tables of financial advisors in M&A and equity/debt offerings. This includes key advisors such as Morgan Stanley, Credit Suisse, and Goldman Sachs
Reasons to buy
- Enhance your decision making capability in a more rapid and time sensitive manner
- Find out the major deal performing segments for investments in your industry
- Evaluate type of companies divesting / acquiring and ways to raise capital in the market
- Do deals with an understanding of how competitors are financed, and the mergers and partnerships that have shaped the nuclear energy market
- Identify major private equity/venture capital firms that are providing finance in the nuclear energy market
- Identify growth segments and opportunities in each region within the industry
- Look for key financial advisors where you are planning to raise capital from the market or for acquisitions within the industry
- Identify top deals makers in the nuclear energy market
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