AES Stock Surges on Takeover Report. Why BlackRock May Be Interested in the Struggling Utility.

AES stock surged on Wednesday after a report said that Global Infrastructure Partners was nearing a $38 billion takeover of the utility group. (PATRICK T. FALLON/AFP via Getty Images)

Key Points

• AES shares increased 15% to $15.12 following reports of a potential $38 billion takeover by BlackRock-owned General Infrastructure Partners.
• General Infrastructure Partners is reportedly close to acquiring AES, though the advanced talks could still fall through.
• Despite a 34% share slump over the past year, AES is seen as a long-term artificial intelligence play due to its renewable energy supply to major tech companies.

AES stock was surging on Wednesday after a report said that the renewable power company was close to being bought in a high-profile takeover deal.

Shares jumped 14% to $14.95 in early trading. The S&P 500 slid 0.3%.

BlackRock -owned General Infrastructure Partners is nearing a $38 billion deal to buy AES, the Financial Times reported, citing people briefed on the matter. Talks are at an advanced stage but could still fail to yield a deal, the people said.

An AES spokesperson said the company would not respond to “rumors in the marketplace.” GIP declined to comment.

AES shares have slumped 34% over the past year, with investors fretting about a drop in revenue as well as the Trump administration’s rollback of clean-energy tax credits.

But it could make sense for the company to be an artificial-intelligence play, because its renewable energy grids supply the power needed to run large-language models. In recent years, AES has brokered deals to supply the likes of Microsoft , Google parent Alphabet, and Facebook parent Meta Platforms .

Write to George Glover at george.glover@dowjones.com