UK infrastructure M&A: what has happened in H1 2025?

The first half of 2025 has been mixed for UK infrastructure M&A. While macroeconomic headwinds and political shifts have cooled overall deal activity, there are bright spots – particularly in the renewables space that continue to attract investor interest.

H1 2025 sector highlights

Despite a 65% drop in renewable transactions compared to H1 2024, the sector remains a key focus. Power has seen the next most dramatic downturn, recording a near 50% fall in deal volumes compared to H1 2024, with telecoms showing the most stability in deal volumes YoY.

UK infrastructure debt market

Infrastructure debt markets are also facing uncertainty. Credit spreads widened in early 2025, and while infrastructure debt tends to adjust more slowly, the long-term impact is still unfolding. The UK remains a strong contributor to European infrastructure debt volumes, including the Inch Cape offshore wind financing which raised over £3.5bn from a 22-bank syndicate during the period.

Investors are optimistic that changes to the UK’s debt measurement rules could unlock billions for infrastructure. Amid tighter fiscal policy, private financing has gained momentum, supported by the government’s push for growth and grid decarbonisation. Overall, the UK is expected to remain an attractive market within Europe for debt investors, offering a broad range of deal sizes and return profiles.

Growing demand in infrastructure supporting services

While headline M&A volumes have softened, infrastructure support services have remained a strong performer in 2025, driven by net zero goals and mounting operational pressures facing major utilities.

As government investment grows in housing, water and renewable energy, demand is surging for specialised providers – from EV charger installers to wastewater firms. This has fuelled consolidation, with private equity leading the charge. These investors are targeting asset-light, high-margin businesses that offer scalable solutions across multiple infrastructure sub sectors. This trend is reinforced by a clear divergence in investor appetite, while asset-heavy deals have slowed, service-oriented businesses are attracting strong interest.

UK Infrastructure M&A short-term outlook

While overall M&A activity has tempered, the UK infrastructure market continues to offer strategic opportunities – particularly within the energy transition and digital connectivity spaces. As fiscal and regulatory clarity improves, we expect confidence to return, especially in sectors with long-term growth potential.

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authors:terence-amako