BlackRock-led consortium to buy AES for $33.4B

A consortium led by BlackRock’s Global Infrastructure Partners and Swedish private equity firm EQT AB has agreed to acquire US power producer AES Corp in a $33.4 billion all-cash deal.

This marks one of the largest takeovers in the energy sector, even as the company’s shares slid sharply on valuation concerns.

The transaction, announced on Monday, comes amid a surge in large-scale acquisitions as investors pile into power assets to meet rising electricity demand driven by data centres and the artificial intelligence boom.

Recent deals include Blackstone’s $11.5 billion purchase of TXNM Energy and Constellation Energy’s $16.4 billion acquisition of Calpine.

Under the agreement, the consortium will pay $15 a share for AES, the world’s largest supplier of clean energy to corporate customers.

The group also includes the Qatar Investment Authority and the California Public Employees' Retirement System.

Why did shares slump?

AES shares fell more than 17% to $14.27 on Monday, making it the worst performer in the S&P 500 and marking its steepest single-day percentage decline since 2002.

The sell-off reflected investor disappointment with the takeover price, which, while representing a roughly 40% premium to the stock’s level last July, was below the $17.28 closing price on Friday.

Shares had surged in October after reports suggested Global Infrastructure Partners was exploring a buyout valued at about $38 billion.

However, analysts said expectations of a higher offer may have been misplaced.

“Investors may have been too optimistic about the takeout price because the situation never evolved into a competitive bidding process,” Evercore ISI said in a research note.

Capital needs and strategic shift

AES had been seeking options to support growth after years of declining revenue and rising long-term debt.

Without a deal, management may have been forced to cut or suspend dividends or raise fresh equity.

“AES has a significant need for capital to support growth beyond 2027,” Chairman Jay Morse said, citing planned investments in US generation and utilities.

The deal is expected to close in late 2026 or early 2027.

AI-driven demand boosts appeal

The company has benefited from growing demand for renewable power, securing contracts with major technology groups such as Microsoft and Meta Platforms.

“The transaction underscores growing infrastructure fund interest in power and utility platforms,” said Tim Winter of Gabelli Funds, pointing to the need for grid expansion and new generation.

Evercore ISI analyst Nicholas Amicucci added that private ownership would give AES greater financial flexibility than it had as a listed company.