Energy sector drives up M&A deals

The energy and natural resources sector posted the highest number of mergers and acquisitions (M&A) in the country last year, reflecting a total transaction value of $3.7 billion, a report from PwC Philippines revealed.

The tax advisory firm said the energy and natural resources sector completed 21 out of 113 M&A transactions in 2024, reaching $8.6 billion.

Financial services, technology and consumer and retail services also represented a substantial number of M&A transactions, with a combined share of 38.1 percent.

Among the major transactions was Aboitiz Corporation’s acquisition of multiple power stations valued at $2.2 billion.

Amid the global shift from traditional fuels to cleaner energy, Aboitiz announced its plan to generate 4,600 megawatts (MW) of renewable energy by 2030.

On track

In April last year, Aboitiz Renewables Inc. president Jimmy Villaroman said the firm remained “on track” in achieving its six-month target of 176 MW of renewable energy in 2024.

The firm said this will help accommodate Filipinos’ demand for power which is seen to grow by 6.6 percent each year until 2040.

“The year 2024 was a promising period for M&A in the Philippines, fueled by progressive investment policies and strong performances in key industries,” PwC Philippines said.

DoE reforms

The tax advisory firm attributed the M&A growth in the energy sector to reforms introduced by the Department of Energy, mainly the Green Energy Auction Program, which streamlined policies on bidding, and the Philippine Energy Plan which provides strategies to modernize the power sector.

“These developments, coupled with investor-friendly policies like the CREATE MORE Act and regulatory reforms that encourage foreign participation in sectors such as energy and telecommunications, position the Philippines as a hotspot for thriving M&A activity,” PwC Philippines said.

CREATE MORE or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy lowers corporate income tax of registered business enterprises to 20 percent from 25 percent.

PwC Philippines said annual M&A deals across all sectors last year increased to 113 from 87 in 2023.

“Additionally, the country continues to show potential in integrating artificial intelligence across various industries, with organizations expressing interest in these technologies despite existing digital skills gaps,” the tax advisory firm said. Kathryn Jose