A consortium involving BlackRock acquires the owner of AES Galabovo Thermal Power Plant

The American utility company AES Corporation, which is present on the energy market in Bulgaria, will have a new owner. Global Infrastructure Partners, owned by BlackRock, and EQT are part of a consortium that is acquiring it for more than $33 billion, betting on the rapidly growing demand for electricity, the Financial Times reports.

The two private investment groups announced on Monday that they would pay $15 per share for AES Corporation in an all-cash deal that values the utility group’s equity at $10.7 billion – a 40% premium to the share price before the first reports of the intentions emerged last July. Including $22.7 billion in debt the deal values the company at $33.3 billion.

The US pension fund Calpers and the sovereign wealth fund of Qatar will also participate in the deal.

AES, which owns and operates power plants in the US and 13 other countries, including Bulgaria, has struggled in public markets in recent years despite growing investor interest in utilities following the artificial intelligence boom.

AES shares fell more than 17% to $14.30 at the opening of the US session in New York, bringing their decline over the past five years to more than 45%.

Wave of deals in the energy market

The acquisition comes amid a wave of deals in the energy sector, which is benefiting from a sharp increase in demand linked to the artificial intelligence revolution. According to an analysis by consulting firm ICF energy demand in the US is expected to grow by 25% by 2030 mainly due to the rapid expansion of data centers and increased electrification.

Private equity-owned power producer Calpine was sold to Constellation Energy for nearly $30 billion last year and Blackstone struck an $11.5 billion deal to acquire TXNM, a large utility company in the southwestern United States.

GIP itself is already an active buyer of utility companies, having agreed in 2024 to acquire Allete, a Minnesota-based utility company, for more than $6 billion, although that deal has not yet been finalized.

AES’s renewable energy investments

In recent years AES has invested heavily in renewable energy networks, which play a key role in supplying electricity to data centers owned by tech giants such as Microsoft, Meta and Alphabet.

In Bulgaria the company owns the AES Galabovo thermal power plant, which this year will not receive state-guaranteed purchase prices, as well as the St. Nikola wind farm.

Infrastructure investment groups are betting that they can increase the capacity of utility companies outside the spotlight of public markets to meet growing demand for electricity.

GIP and EQT said on Monday that they plan to continue expanding AES’s renewable energy operations and that the deal will provide “financial flexibility” for investments in new power plants.

The future of AES

Publicly traded utility companies such as AES pay high dividends to investors, which sometimes creates a challenge to balance new investments and profit distribution.

In recent years GIP and EQT have also been heavily investing in data centers and are among the largest investors in such facilities in the world. At the end of last year GIP closed a $40 billion deal to acquire private data center operator Aligned Data Centers, the largest acquisition in the sector to date.

Translated with DeepL.