NEW YORK: BlackRock Inc’s Global Infrastructure Partners LP (GIP) and EQT AB agree to buy AES Corp for about US$10.7bil in cash as the market heats up for power plant developers that can provide electricity for energy-hungry artificial intelligence (AI) data centres.
GIP and EQT will pay US$15 per share for AES, a utility and power producer, it said in a statement on Monday. The enterprise value of the deal is about US$33.4bil.
AES shares slumped as much as 18%, the most intraday in nearly six years, and were trading at US$14.30 in New York.
The US$15 per share is below last Friday’s closing price of US$17.28, after merger and acquisition (M&A) speculations fuelled a rally in the stock.
However, the transaction represents about a 40% premium to the 30-day volume weighted average share price prior to July 8, the day before Bloomberg News reported that AES was exploring a sale and attracting interest from infrastructure investors including GIP.
The deal underscores the rising importance of power providers in the AI data centre build-out with the sector seeing more than US$280bil in M&As announced since the start of 2025, according to data compiled by Bloomberg.
It’s expected to close by early 2027.
AES was facing the prospect of eliminating their dividend and issuing an enormous amount of equity to fund an expanding pipeline of power projects, according to a person familiar with the situation who isn’t authorised to speak publicly.
The deal will provide the capital needed for its growth, the person said.
Going private will give AES more flexibility, according to analysts at Evercore.
“With the support of the consortium, AES now has improved access to capital to invest and is no longer beholden to the leverage metrics that investors wish to see in a public company,” Evercore analysts Nicholas Amicucci and Sharon Wang wrote in a research note on Monday.
GIP and EQT are betting that AES will benefit from the surging electricity needs of massive computing facilities being constructed by technology companies.
The power provider has struck deals to provide renewable power to developers including Google, Microsoft Corp and Amazon.com Inc.
AES had explored strategic options after receiving takeover interest from infrastructure investors last year. In February, Bloomberg News reported GIP and EQT were nearing a deal to acquire the firm.
GIP and EQT were initially rival bidders but decided to team up later in the process and their due diligence took around nine months, the person familiar said. — Bloomberg
