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  1. Our thinking
  2. Transformational M&A
  3. Outlook for transition M&A
Outlook for transition M&A
10 key trends in transition M&A
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M&A is not the only mechanism by which the energy transition will be delivered, but has a far more important role than many appreciate. More conservative and organic change will likely not be enough.

As regulatory pressure on companies to decarbonise builds over the coming years, accompanied by pressure from shareholders, customers and other stakeholders, we see an increasingly important role for M&A in corporate transformation.

Regional, technological and sectoral variations are providing a wide range of opportunities for successful and value accretive M&A for both buyers and sellers in a critical and exciting set of industries, but those opportunities inevitably come with significant challenges and risks to be understood, analysed, mitigated and addressed.

'Legal risks will be in sharp relief in many transactions due to the changing regulatory landscape surrounding nascent transition industries, potentially in new and emerging markets', says Head of Client Sustainability and Environment Jake Reynolds. 'The challenges posed by M&A of this nature may be acute, but transformation is rarely a smooth ride. While there will be issues and obstacles to navigate, with the right preparation, structuring and advice, there is real value to be unlocked in tandem with substantial climate benefits.'

How Freshfields can help

In a world of increasing regulation, stakeholder influence and rising expectations from society, it’s clear that sustainability is a board- and C-suite-level priority. We have a long track record of advising the world's leading national and multinational corporations and financial institutions on ground-breaking and business-critical challenges, including climate focused M&A.

Understanding the legal landscape of environmental, social and governance issues across jurisdictions is essential in building a resilient business. Throughout this report, you have seen just a few of the successes we have helped our clients realise.

We understand both the local intricacies and global strategies needed to get complex and transformational transactions over the line. Our team of more than 2,800 lawyers and other legal professionals delivers global results from our 30 offices worldwide.

To discuss anything you found interesting in this report, please get in touch with our Head of Client Sustainability and Environment Jake Reynolds or any of your usual Freshfields contacts.

Related services
ESG and sustainability
Energy
Energy transition
ESG competition and collaboration
Mergers and acquisitions
Private capital
Sustainable finance and investment
Sustainable transactions
Transformational M&A 10 key trends

Transformational M&A 10 key trends

Transformational M&A
Reports
4 Jun 2024
Increased vertical and horizontal integration

Potential ramifications of government subsidies and incentives granted to a target require detailed investigation.

Reports
4 Jun 2024
Bundling small projects from SME developers into portfolios to create scale

Striking the right balance between development and generating assets in a renewables portfolio is very important.

Reports
4 Jun 2024
Traditional players moving outside of their comfort zones

M&A and JVs allow for a much speedier move into markets where one partner or target has access to and knowledge of a particular territory or has finessed a particular business line.

4 Jun 2024
New technology providers and specialist operators entering projects earlier

Parties should anticipate the path to final investment decision and project commissioning, ensuring appropriate off-ramps.

4 Jun 2024
Geography is critical for many low-carbon technologies

A in new jurisdictions or sub-sectors needs robust diligence, appropriate deal structuring and contractual protections. Allocate more time to scenario planning and contingent downside risk evaluation.

4 Jun 2024
No business is an island: low-carbon investment requires a full value chain

Sellers unable to credibly explain how key business inputs can reliably support the target business may struggle in transactions.

4 Jun 2024
Setting up businesses/projects to facilitate M&A and realise synergies in future is critical

Balancing the need for the right partners at the right time – providing construction expertise, IP, a route to market etc – with the need for shareholders to exit and recycle capital is often critical in a new business area.

4 Jun 2024
Sources of capital driving M&A activity (and their constraints) are changing

A positive ESG score cannot mask a poor credit prospect, but can positively affect deals with marginal economics and/or in a busy M&A deal market with constrained debt liquidity.

4 Jun 2024
Private capital trends are affecting energy transition M&A

Financial investors are discovering the difficulty of assessing and reporting on the (often varied) ESG characteristics and impact of their investments.

4 Jun 2024
Antitrust and FDI controls are influencing energy transition M&A

Getting M&A over the antitrust hurdle primarily requires demonstrating positive externalities (a climate benefit) that offsets harms to competition.

Contacts
London
James ChapmanPartner
Singapore
Philip MorganPartner
London
Jake ReynoldsHead of Client Sustainability and Environment
Hamburg, London
Natascha DollPartner
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