As in years prior, energy and natural resources remains one of the sectors respondents expect will experience substantial M&A activity over the next 12 months, trailing only healthcare and financial services. What’s more, 80% of respondents expect the sector’s M&A market in the U.S. to strengthen in the year to come, with only 5% saying it will weaken.

The numbers bear out this optimism: deal value in the sector almost tripled to $83 billion in the first four months of 2024 compared to the same period a year ago.

The push for clean energy continues to be a deal catalyst. Nearly one-third of respondents who believe the energy sector will strengthen cite renewables as the key driver, more than any other. “Financing deals of large renewable energy projects will necessitate restructuring and drive the requirements to merge for capital asset management,” one respondent told us. “There is also a surplus of companies in the renewable energy market. They will either go through a deal or close their doors.”

“The ongoing push for clean energy is a major catalyst in M&A activity,” says Liebmann. “The surge is being driven by federal incentives and stricter environmental regulations. However, persistent supply chain constraints for essential electrical equipment remain a significant challenge. This dynamic underscores the critical need for strategic dealmaking in navigating both the opportunities and obstacles within the energy transition.”

The energy transition is also driving substantial investments in the electric/utilities sector (27% cited this area as a key driver of M&A activity) and energy storage (10%). For instance, H1 2024 saw 14 energy storage M&A deals, up from eight in the first half of 2023.

“The ongoing push for clean energy is a major catalyst in M&A activity,” says Liebmann. “The surge is being driven by federal incentives and stricter environmental regulations. However, persistent supply chain constraints for essential electrical equipment remain a significant challenge. This dynamic underscores the critical need for strategic dealmaking in navigating both the opportunities and obstacles within the energy transition.”

Yet fossil fuels aren’t going away anytime soon, and 22% of those who believe the sector will strengthen cite this subsector as the most prominent driver. U.S. oil and gas deals hit a record $51 billion in Q1 2024, a continuation of last year's fierce merger pace centered around the country’s top shale fields, according to Reuters and data provider Enverus. In fact, on a global scale, “big consolidation plays represented roughly 25% of deal value over the first five months of 2024.”