AES Corporation (NYSE:AES), a major U.S.-based energy company known for powering tech giants like Microsoft, Amazon, and Google with renewable energy, is reportedly exploring a potential sale amid takeover interest from infrastructure giants Brookfield Asset Management and BlackRock’s Global Infrastructure Partners. AES owns a mix of renewable, natural gas, and coal assets, as well as two utilities in Indiana and Ohio. The combination of long-term contracts, a strong renewable pipeline, and discounted valuation has now made it a potential takeover target in a market increasingly hungry for energy assets that support AI and data center growth. But what makes it such an attractive acquisition target? Let us find out!
Massive Renewable Backlog With Tier-1 Tech Clients
One of the most compelling reasons for a buyer like Brookfield or BlackRock to pursue AES is its unmatched renewable pipeline combined with long-term power purchase agreements (PPAs) signed with blue-chip clients in the tech sector. AES has signed agreements for 9.5 gigawatts of renewable power with data center operators—more than any other developer in the U.S. These PPAs, often with Microsoft, Amazon, and Google, are not only long-tenured but structured to offer predictable, take-or-pay revenue streams insulated from demand variability. AES’s construction pipeline is also robust, with over 3 GW of renewable projects expected to come online this year alone, including the 1 GW Bellefield solar-plus-storage project contracted entirely to Amazon. The company currently boasts an 11.7 GW backlog, most of which is secured under favorable financial and regulatory conditions. Nearly all U.S.-bound equipment for its projects through 2027 is already procured or contracted, giving AES unique protection against future tariffs or policy disruptions. In addition, its assets are geographically diversified across the U.S. and key international markets, offering a stable mix of regulatory environments and growth optionality. AES also benefits from early-mover advantage in domestic clean energy supply chains, which is increasingly valuable as geopolitical tensions and trade barriers escalate. For acquirers with long-term infrastructure mandates, AES provides immediate scale, top-tier clients, and visibility into EBITDA growth—a combination that is increasingly rare in a consolidating renewables sector.
Discounted Valuation Relative To Asset Base & Growth Potential
Despite its strategic portfolio and long-term contracts, AES trades at a significant discount to peers, a dynamic that could attract opportunistic infrastructure investors seeking undervalued assets. AES’s stock has lost nearly half its value over the past two years, impacted by macroeconomic factors including interest rate hikes, inflationary pressures, and uncertainty around U.S. clean energy policy under the Trump administration. With a current market cap of approximately $9.4 billion against an enterprise value of $40 billion, much of this valuation gap can be attributed to the company’s high leverage (net debt-to-EBITDA of 7.3x) and perceived execution complexity. However, AES has already addressed its 2025 debt maturities and fully hedged interest rate exposure through 2027. It has also completed $3.4 billion in asset sales since initiating its restructuring plan and secured strong credit upgrades for its utility subsidiaries. Meanwhile, its renewable EBITDA grew 45% year-over-year in the latest quarter, and AES reaffirmed its 2025 EBITDA guidance of $2.65B–$2.85B. Investors like Brookfield and BlackRock, with deep experience managing leveraged assets and optimizing capital structures, may view this valuation dislocation as a unique entry point. With ample access to low-cost capital and long investment horizons, these firms could unlock value by improving AES’s financing efficiency, accelerating divestitures, and focusing on high-return assets. For a buyer looking to acquire a platform rather than just individual assets, AES offers both the discount and the upside potential that make large-scale LBOs attractive.
Mission-Critical Role In AI & Data Center Energy Transition
AES sits at the intersection of two megatrends driving infrastructure M&A today: the data center boom and the decarbonization of energy. Demand from hyperscalers—large cloud computing and AI companies—is fueling a race to secure clean and reliable electricity at massive scale. AES is a preferred power supplier to the world’s largest data centers and has a proven track record of tailoring geographically diverse, large-scale renewable projects to meet their needs. This includes delivering projects with advanced permitting and short construction cycles, which provide faster time-to-power than most conventional generation. AES’s role in the AI economy is not theoretical—Amazon has already contracted 1 GW of capacity from the Bellefield project, and new grid infrastructure is being built by AES to serve Amazon’s upcoming data center in Fayette County, Ohio. The company has also signed agreements for 2.1 GW of new data centers in AES Ohio's service territory. With the global push for sovereign AI capacity and domestic computing infrastructure, energy security is becoming as important as compute power itself. For strategic infrastructure investors, this represents an opportunity to lock in exposure to a secular growth trend that will drive electricity demand for decades. AES’s hybrid portfolio of renewables and dispatchable assets, coupled with its regulatory-approved utility infrastructure, makes it uniquely positioned to support the AI-fueled energy load—an increasingly valuable trait that acquirers are looking to secure.
Robust De-risking Measures Amid Regulatory & Market Volatility
Unlike many renewable developers that face uncertainty from shifting policies and trade barriers, AES has taken proactive steps to de-risk its business model across financing, regulation, and supply chain logistics. The company has safe-harbor protections on nearly all of its U.S. backlog, ensuring eligibility for tax credits even under proposed changes to the Inflation Reduction Act. AES has also locked in fixed-price equipment contracts and executed strategic equipment imports well in advance of tariff announcements, limiting its total tariff exposure to a negligible $50 million—or just 0.3% of U.S. project CapEx. The company’s use of asset recycling and innovative financing—such as the recent $450 million sale of a minority stake in its captive insurance subsidiary, AGIC—provides it with access to low-cost capital without diluting equity. It has already achieved its asset sale target for 2025 and has raised roughly half of its $1.2 billion to $1.8 billion growth capital plan for the coming years. AES also derives roughly two-thirds of its EBITDA from long-term contracted generation, mostly take-or-pay agreements, which buffer its cash flow from demand volatility or macro shocks. With debt maturities refinanced and benchmark interest rate exposure fully hedged through 2027, its credit profile has been improving steadily. Such thoughtful risk management not only supports AES’s standalone business case but also enhances its attractiveness to potential acquirers by removing deal-breaker uncertainties and simplifying post-acquisition integration.
Final Thoughts
Source: Yahoo Finance
AES’ stock soared nearly 20%—its largest single-day jump since 2008—following reports of these preliminary discussions. Once a high-flying clean energy play, the company has seen its market cap erode by more than 38% over the past year, leaving it with a valuation around $9.4 billion despite an enterprise value close to $40 billion due to its heavy leverage. However, its long-term contracts with tech majors, rapid execution of large-scale projects, and aggressive de-risking measures offer compelling fundamentals for infrastructure investors like Brookfield and BlackRock. At the same time, its heavy leverage, mixed portfolio of renewables and fossil assets, and complex corporate structure present challenges for any prospective buyer. While a full-company acquisition would be among the largest leveraged buyouts in history, the convergence of AI-driven energy demand and the push for renewable infrastructure may justify such a bold move. We believe that whether or not a deal materializes, AES’ positioning makes it a focal point in the evolving clean energy M&A landscape.