As the summer recedes, there’s a renewed push to get M&A deals across the line. The two industrial sectors that we are seeing leading the charge are energy and technology.
This is consistent with the findings of Brodies LLP’s latest report, ‘Evolution not revolution: investing in the energy transition’, that we published earlier in the year. In energy, the push to diversify into renewable generation assets – such as agri-adjacent biogas production – and construct co-located facilities for energy storage and digitalisation are two specific areas predicted by the report that are bearing fruit. These types of projects have long commercial lives (and payback periods) and currently appear to be very desirable to both equity investors and project funders.
The oil and gas industry remains fairly frustrated. Despite global tensions pushing up the commodity price, the government’s delayed decisions on the Rosebank and Jackdaw oilfields and the decision of BP to exit the North Sea have combined to cast a (hopefully short-term) air of disappointment over an otherwise prosperous sector of the Scottish economy. That said, the companies that would previously have identified “oilfield services” and have successfully re-oriented as “energy services” are making the most of the opportunities on a global basis (with attendant deal opportunities) and the BP deal itself will be a significant piece of M&A.
Meanwhile, digitalisation is quietly transforming commercial operations in many companies across all sectors. For many, artificial intelligence solutions are fundamentally changing the way they do business. The use of AI agents removes the burden and can improve the output of routine tasks, increasing efficiency and accuracy. The doomsayers may worry about the impact on jobs, but – so far – the predominant anecdotal result has been increased efficiency for employees and businesses as a whole. There is a long road to run on the question of the impact of AI, but could this be part of the answer to bridging the country’s infamous productivity gap?
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