Zeus: Power company mergers are getting bigger

Early merger numbers show a rush of private equity investors into utilities

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SAN FRANCISCO (Callaway Climate Insights) — The mad rush by data centers to buy power for their AI ambitions is causing a boom in merger activity this year on Wall Street — and the deals are getting bigger.

Led by the massive $112 billion combination bringing NextEra Energy NEE 0.00%↑ and Dominion Energy D 0.00%↑ together this spring, the value of mergers in the power sector through May this year surged to $204 billion from $142 billion in the first five months last year, according to the Financial Times, citing a study by Deloitte.

But the number of deals is about similar, with 77 power deals through May — about half of the 157 all of last year. The London Stock Exchange Group merger data center reports that total deals are actually down this year, but of the $2.8 trillion in total value so far, almost half are valued at $10 billion or more.

What to make of this?