BlackRock's GIP and EQT Buying Energy Utility AES for nearly $34B
Some of the biggest names in private equity investment believe strongly enough in the future of growing electricity demand that they are willing to acquire publicly traded utility and power generation firm AES Corp. and take it private in a $33.4 billion transaction.
BlackRock-owned Global Infrastructure Partners and a fund within infrastructure investor EQT Group this week announced they are joining together to buy AES Corp. The deal also has backing from co-underwriters California Public Employees’ Retirement System and Qatar Investment Authority.
Sweetening the agreement at $15 per share represents a 40% premium over the 30-day weighted average share price. The enterprise value is estimated at nearly $34 billion, including debt.
Virginia-based AES owns electric utilities in Indiana and Ohio as well as independent power projects across the world, including renewable energy and liquified natural gas facilities.
“As one of the largest energy infrastructure investors globally, we are seeing first-hand the increasing need for a secure energy supply amid expanding power demand worldwide,” EQT Infrastructure Head Masoud Homayoun said in a statement. “EQT’s acquisition of AES will support the growth and modernization of essential energy infrastructure that underpins energy security, electrification, digitalization and resilient power systems across key markets.”
The investment consortium acquiring AES is saying that the company will benefit from enhanced financial flexibility through private ownership. EQT’s Infrastructure VI Fund is expected to hold at least 75% of the investment.
The massive utility acquisition is already approved by the AES board of directors and could be closed later this year or early 2027, pending AES shareholder and regulatory approvals. AES stock will then no longer trade on the New York Stock Exchange.
“Over the course of our 45-year history of powering industries and shaping the future of energy, AES has built a diverse portfolio to meet the evolving power needs of our customers and communities,” said Andrés Gluski, AES president and CEO. “We believe this transaction maximizes value for existing stockholders and positions the company for long-term success as we continue delivering on our commitments to customers, communities and people.
The anticipated artificial intelligence and cloud-based computing demand growth could require another 125 GW or more of added power generation capacity in the next decade. A constrained utility grid is leading some investors and data firms to shift toward off-grid to avoid interconnection delays and achieve “speed to power” objectives.
Investors such as GIP, which was acquired by BlackRock earlier this decade, are committed to the notion that AI is not hype but rather a once and future operational reality.
A majority of commercial and industrial sector companies already are utilizing generative AI in their operations. Market forecasters from Goldman Sachs to McKinsey are predicting that data center load would more than double its stake in overall commercial and industrial energy demand.
“We firmly believe it is not a bubble,” James Lee, partner at BlackRock GIP, said during a keynote last fall at the Schneider Electric Innovation Summit in Las Vegas. “There are strong fundamentals, first in the rapid acceleration of adoption. . . That adoption is driving real revenue.”
And it is driving hyperscalers such as Microsoft, Google, Amazon, Meta and Oracle to get off the energy sidelines and invest big in support for next-generation capacity both on the grid and possibly off-grid. These new power plants could be microgrids or co-located power plants, which the data industry sometimes calls energy parks, powered by natural gas and next-gen nuclear resources.
The new owners announced their intent to retain current leadership in AES as well as the company headquarters in Arlington, Virginia. They also said that the deal would not lead to higher impact utility customer rates and that the regulated utilities would stay that way.
J.P. Morgan Securities LLC and Wells Fargo Securities LLC advised AES on the proposed transaction.
Early in 2025, a unit of EQT Infrastructure acquired on-site power project developer Scale Microgrids.
About the Author
Rod Walton, EnergyTech Managing Editor
Managing Editor
For EnergyTech editorial inquiries, please contact Managing Editor Rod Walton at [email protected].
Rod Walton has spent 17 years covering the energy industry as a newspaper and trade journalist. He formerly was energy writer and business editor at the Tulsa World. Later, he spent six years covering the electricity power sector for Pennwell and Clarion Events. He joined Endeavor and EnergyTech in November 2021.
Walton earned his Bachelors degree in journalism from the University of Oklahoma. His career stops include the Moore American, Bartlesville Examiner-Enterprise, Wagoner Tribune and Tulsa World.
EnergyTech is focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids. The C&I sectors together account for close to 30 percent of greenhouse gas emissions in the U.S.
He was named Managing Editor for Microgrid Knowledge and EnergyTech starting July 1, 2023
Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.