Private equity giant KKR \u0026 Co LP has reportedly submitted a non-binding takeover proposal for natural gas and electricity distributor UGI Corp, valuing the company at approximately $9 billion.

According to sources familiar with the matter, the offer from KKR \u0026 Co LP stands at $42.50 per share. Reports indicate that it remains uncertain whether UGI Corp will accept these terms or ultimately reach a definitive agreement with KKR \u0026 Co LP or other potential bidders.

UGI Corp, headquartered in King of Prussia, Pennsylvania, operates across natural gas and electricity distribution, long-haul gas pipelines, and storage systems. The company also owns propane retailer AmeriGas and runs a liquefied petroleum gas supply business in Europe.

Following the news, UGI Corp shares surged 9% on Tuesday. Over the past twelve months, the stock has gained less than 2%, while the S&P 500 index has risen 20% during the same period.

Where the momentum is building

The acceleration of mergers and acquisitions in the natural gas and power generation sectors is primarily driven by the massive electricity demands of AI workloads and hyperscale data centers. High-power-density AI clusters require stable, controllable baseload power, redirecting investor attention back toward traditional power plants and gas infrastructure.

The International Energy Agency (IEA) projects in its recent energy analysis that global data center electricity consumption will double by 2030, reaching approximately 945 to 1,000 terawatt-hours (TWh), fueled by AI computing demand.

After years of being overlooked by the market, natural gas power generators that provide reliable electricity to AI data centers are once again attracting capital. A notable example is gas-fired power producer Calpine, which private equity firm Energy Capital Partners sold to Constellation Energy earlier this year. Reports suggest this deal could rank among the most profitable private equity transactions in history.