North-east activity is talking point of M&A market 

Amidst the UK’s dip into recession, geopolitical uncertainty and high interest rates, you could be forgiven for thinking that there’s nothing notable to discuss in Scotland’s M&A market.

Not so. First is the energy sector, where Scotland’s largest reported M&A deal (value) in 2023 was Repsol’s acquisition of the 49 per cent minority shareholding in its UK joint venture from Sinopec for $1.1 billion.

Aberdeen-headquartered Ithaca Energy also completed its IPO and London Stock Exchange listing at the tail-end of 2023 at a headline £2.5 billion valuation.

Despite industry concerns about the fiscal situation, the UK oil and gas industry remains robust, and we are advising many Scottish oil services companies as they internationalise their native Scottish expertise and engineering skills, especially into the Middle East.

Offshore wind is driving the energy transition, and we are MARTIN EWAN seeing meaningful volumes of deals now trading renewables assets, including onshore windfarms, as medium-to-longterm infrastructure investments. Innovation can be seen at Aberdeen’s Energy Transition Zone around renewables, hydrogen and carbon capture, which will help achieve net zero targets.

If we get the structural support right for the energy transition’s ecosystem, Scottish companies could become global leaders into the next century.

The second star of Scotland’s M&A market is its technology sector. Private equity and trade deals in software and broader IT services remain strong, especially for companies offering software-as-a-service. Our current support of a large number of energy tech companies in expanding their commercial operations and maximising value is also indicative of the sector’s ambition for growth.

While longer timescales, higher capital costs and regulatory burdens have made the deals landscape a more challenging space to navigate, there is still much to discuss in M&A. Deals are still getting done – and by focusing on its key sectors of the future, Aberdeen can transition from Europe’s oil capital to the poster child for the energy transition.

Martin Ewan is a corporate partner at Brodies, based in Aberdeen. Partner Content in association with Brodies LLP.