Energy Sector M&A Deals on the Rise
The energy and natural resources sector took the lead in mergers and acquisitions (M&A) in the Philippines last year, boasting a total transaction value of $3.7 billion, according to a report from PwC Philippines. The sector wrapped up 21 out of 113 M&A deals in 2024, reaching a total sum of $8.6 billion. This was a significant chunk of the overall M&A landscape, with financial services, technology, and consumer and retail services also making up a considerable 38.1 percent share of the transactions.
One of the standout deals of the year was Aboitiz Corporation’s acquisition of multiple power stations valued at $2.2 billion. With the global move towards cleaner energy sources, Aboitiz shared its ambitious plan to produce 4,600 megawatts (MW) of renewable energy by 2030.
Aboitiz Renewables Inc. president Jimmy Villaroman gave a promising update in April last year, stating that the company was “on track” to hit its goal of generating 176 MW of renewable energy by the end of 2024. This growth is essential to meet the rising demand for power among Filipinos, projected to increase by 6.6 percent annually until 2040.
PwC Philippines credits the surge in M&A activity in the energy sector to reforms introduced by the Department of Energy, particularly programs like the Green Energy Auction Program and the Philippine Energy Plan. These initiatives aim to modernize the power sector and make it more attractive to investors.
Moreover, the passing of the CREATE MORE Act has played a role in boosting M&A deals across industries. This legislation lowers the corporate income tax rate for registered businesses from 25 percent to 20 percent. As a result, the country saw an increase in annual M&A deals from 87 in 2023 to 113 in 2024.
In addition to these developments, there is growing interest in incorporating artificial intelligence into various industries in the Philippines. Despite challenges related to digital skills, organizations are keen to explore and adopt AI technologies, signaling a potential for further growth and innovation in the coming years.
