Mergers and Acquisitions

Europe’s battery value chain: Unlocking a new wave of convergence

The race to net zero has accelerated a new wave of convergence across Europe’s evolving battery sector, with a whole range of sectors working together to create a viable battery value chain.

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By Paul Betts
Published April 26, 2022 | 3 min watch
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Key Points

  • The shift to a more sustainable future is driving tremendous activity across Europe’s EV battery industry, which is converging at a rapid pace to meet ambitious carbon emission targets.
  • Another key factor accelerating today’s markets is the drive to cut Europe’s dependency on Russian oil and gas and expedite alternative sources of energy.
  • The lines between traditional industry boundaries will blur as companies look beyond the borders of their own verticals for opportunities to evolve and converge.
  • In terms of M&A, that accelerated convergence will be matched by an increase in deal complexity, as investors and corporates look for new ways to create value.

Europe’s evolving battery value chain is leading the race to net zero but needs an end-to-end eco-system to succeed, with a range of industries working together from upstream extraction of battery metals, chemicals processing, industrials battery manufacturing, real estate and new technologies driving battery recycling. Already, strategic partnerships are forming on a daily basis across the sector, from mining companies investing and partnering with battery manufacturers and recyclers and vice versa.

“The race to net zero relies on battery power. That’s leading to tremendous activity across Europe’s battery sector, but it needs an eco-system to succeed.”

Paul Betts, MD, M&A, Europe

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Another key factor accelerating convergence is the drive to cut Europe’s dependency on Russian oil and gas. With prices rising, there's increased urgency to expedite the move towards alternative sources of energy, and question marks around what happens to nickel – an essential component in EV batteries – for which Russia is also one of the largest producers. Supply-chain resilience will be critical to Europe’s battery industry and will drive increased vertical integration as companies look to secure upstream supply of raw materials.

To connect every step in the value chain – and gain a competitive foothold in such a fast-moving landscape – companies will need to look beyond the borders of their own verticals for opportunities to evolve and expand. In terms of M&A, that accelerated convergence will be matched by an increase in deal complexity, as investors and corporates look for new ways to create value.

As a bank, RBC is also breaking down silos, converging teams to bring together expertise across mining, chemicals, industrials and infrastructure to more effectively help clients turn the challenge of convergence into an opportunity.

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