Infrastructure emerged as a major theme for European private equity in 2022, accounting for almost half of the continent’s 10 largest deals this year.
With inflation hitting double-digit rates in Europe, PE firms have been looking for assets that can pass on higher input costs to end customers or are otherwise resistant to climbing prices.
Certain infrastructure assets offer a degree of protection if they are pegged to rising costs, leading to several outsized deals.
The €12.9 billion (about $13.8 billion) acquisition of Suez in January, led by Meridiam and Global Infrastructure Partners, was the year’s largest European infrastructure deal. In second place was the €9.3 billion purchase of Autostrade per l’Italia in March by Blackstone, Cassa Depositi e Prestiti and Macquarie Asset Management.
Assets in renewable energy infrastructure have gained prominence at a time when the Ukraine war has exposed the limitations of Europe’s energy capacity. JP Morgan’s Infrastructure Investments Fund buyout of Falck Renewables for €3.4 billion is an example of this trend.
PE carveouts also proved to be resilient, representing four of the top 10 deals this year. As interest rates increase and the rise in the cost of living puts pressure on consumer spending, companies are looking to shore up their balance sheets by offloading non-core assets.
One such deal was Apax Partners and Warburg Pincus‘s €5.1 billion buyout of T-Mobile Netherlands, as well as Unilever‘s sale of tea unit Ekaterra to CVC Capital Partners.
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