BlackRock, EQT-led group seals $33.4 billion AES deal in bet on AI power boom

By Sumit Saha

March 2 (Reuters) - A consortium led by BlackRock's BLK.N Global Infrastructure Partners and Swedish private-equity firm EQT AB EQTAB.ST has agreed to buy U.S. power company AES Corp AES.N for $33.4 billion, including debt, in one of the biggest acquisitions in the sector.

The deal, announced on Monday, extends a wave of big transactions in the industry, such as Blackstone's $11.5 billion acquisition of TXNM Energy TXNM.N and Constellation Energy's CEG.O $16.4 billion buy of Calpine, as the AI boom increases the demand for power, straining grids and pushing investors toward dependable power portfolios.

U.S. power consumption will continue to rise this year and the next, after hitting a second consecutive record in 2025, according to estimates by the Energy Information Administration.

The largest U.S. electric utilities are ramping up spending on new power infrastructure to meet soaring demand from data centers that cater to the surging needs of companies adopting the latest technology.

"With the support of the consortium, AES now has improved access to capital to invest and is no longer beholden to the leverage metrics that investors wish to see in a public company," Evercore ISI analyst Nicholas Amicucci said.

AES on Monday topped Wall Street's full-year adjusted profit estimates, helped by strong power demand.

The utility posted adjusted profit of $2.34 per share, compared with analysts' average estimate of $2.16 per share, according to data compiled by LSEG.

MONTHS-LONG DEAL

The consortium will acquire AES for $15 per share in cash, representing a total equity value of $10.7 billion, AES said, adding that the transaction is expected to close in late 2026 or early 2027.

The offer represents a 13% discount to AES' last close on Friday. The deal is a 35.5% premium to July 8, the last close before the first media report of a potential acquisition.

Shares of AES tumbled more than 17% in early trading, their lowest level since January 26.

In the absence of a transaction, AES said it would have had to reduce or eliminate dividend payments or make substantial new equity issuances.

The agreement includes reciprocal termination fees. The consortium will pay $100 million or up to about $588 million, while AES will pay roughly $321 million under specified terms.

AES' units in Indiana and Ohio will remain locally operated and managed utilities.

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

GIP has been expanding its utility footprint, including a $6.2  billion take-private deal for Allete with CPP Investments in 2024.

AES' net debt stood at $27.56 billion as of December 31.