Antitrust Scrutiny in the Energy EPC Sector: Navigating Strategic Risks and Long-Term Value Creation in Cross-Border Deals

The energy engineering, procurement, and construction (EPC) sector is at a crossroads. As cross-border infrastructure deals accelerate to meet the demands of the global energy transition, antitrust scrutiny has intensified, reshaping the risk landscape for investors and operators alike. Recent enforcement actions, regulatory shifts, and geopolitical tensions underscore the need for a recalibration of strategies to balance compliance with long-term value creation.

The Rising Tide of Antitrust Enforcement

In 2025, the U.S. Federal Trade Commission (FTC) and Department of Justice (DOJ) secured a $5.68 million penalty from Verdun Oil Company II LLC and XCL Resources Holdings, LLC for "gun-jumping" during the 2021 acquisition of EP Energy LLC. This case exemplifies a broader trend: global antitrust penalties doubled to $6.7 billion in 2024, with over half targeting Big Tech, but energy firms are increasingly in the crosshairs. According to a report by A&O Shearman, mergers and acquisitions in energy sectors remain under intense scrutiny due to their potential to reduce competition and inflate prices Chinese Entities Lead in Rising Cross-Border Disputes^[4].

The U.S. is not alone. In the European Union, cross-border energy projects face antitrust challenges as firms navigate fragmented regulatory frameworks. The revised Trans-European Networks for Energy (TEN-E) Regulation, effective since 2022, aims to streamline permitting for Projects of Common Interest (PCIs), but a 2023 European Court of Auditors review found that 60% of PCI projects since 2013 missed deadlines, citing complex stakeholder negotiations and supply chain delays EU Allocates €600 Million to Cross-Border Energy Projects Under Revised TEN-E Framework^[3].

Strategic Risks in Cross-Border Deals

The strategic risks for energy EPC firms are multifaceted. First, pre-merger compliance failures—such as the Verdun/XCL case—can trigger severe penalties and reputational damage. Second, market concentration in sectors like transmission and distribution, where natural monopolies often emerge, invites regulatory intervention. For example, NextEra Energy Inc. faces a $350 million antitrust lawsuit for allegedly blocking competition in New England's hydropower market, a case that highlights how anticompetitive behavior can distort pricing and innovation Antitrust Issues in Renewable Energy - Vinson^[1].

Third, geopolitical tensions complicate cross-border projects. Chinese state-owned enterprises (SOEs), expanding under the Belt and Road Initiative (BRI), have faced antitrust reviews in the U.S. and EU. The 2022 failed acquisition of Maersk Container Industry by CIMC, blocked by antitrust authorities in the U.S. and Germany, illustrates the high stakes of navigating overlapping regulatory regimes Chinese Entities Lead in Rising Cross-Border Disputes^[4].

Long-Term Value Creation: Strategies for Success

To mitigate these risks, energy EPC firms must adopt a dual focus on compliance and strategic innovation.

1. Supply Chain Diversification and Localization
   Renewable energy projects require resilient supply chains. A wind farm project in Alberta, Canada, demonstrated how localizing procurement of components like turbines and solar panels reduces geopolitical risks and transportation costs. By combining global supplier relationships with local market knowledge, firms can navigate regional challenges while leveraging technological advancements Antitrust Issues in Renewable Energy - Vinson^[1].

2. Strategic Partnerships and Regulatory Alignment
   Cross-border projects demand collaboration with governments, financial institutions, and technology providers. The EU's Connecting Europe Facility (CEF) provides grants for cross-border energy projects, including hydrogen and offshore wind infrastructure, offering a model for aligning with regulatory frameworks. For instance, the €1.25 billion allocated in 2025 supported 41 projects, illustrating how financial incentives can drive compliance and market integration EU Allocates €1.25 Billion for Cross-Border Energy Infrastructure^[5].

3. Antitrust Compliance as a Competitive Advantage
   Proactive compliance is no longer optional. The FTC's enforcement of HSR Act violations, such as the Verdun/XCL case, underscores the importance of rigorous pre-merger protocols. Firms must embed antitrust risk assessments into strategic planning, particularly when pursuing joint ventures or state aid. In the EU, the European Commission's rigorous enforcement of the Treaty on the Functioning of the European Union (TFEU) prohibits anti-competitive agreements, making compliance a non-negotiable pillar of long-term value Antitrust in the Energy Sector: Regulatory Challenges and Compliance Strategies^[2].

4. Stakeholder Engagement and Energy Justice
   Long-term value creation requires addressing distributive, procedural, and recognition justice. Cross-border projects like the Spain-France electricity interconnectors are evaluated using technical and environmental criteria to ensure equitable benefits and minimal environmental impact. By engaging local communities and indigenous stakeholders, firms can secure social licenses and avoid costly delays Antitrust in the Energy Sector: Regulatory Challenges and Compliance Strategies^[2].

Case Studies: Lessons from the Field

• EU Cross-Border Interconnectors: The Spain-France interconnector project, prioritized under the TEN-E framework, highlights the role of multi-criteria decision analysis (MCDA) in balancing technical, economic, and environmental factors. Despite permitting delays, the project's focus on market coupling and grid reliability offers a blueprint for navigating regulatory complexity EU Allocates €600 Million to Cross-Border Energy Projects Under Revised TEN-E Framework^[3].
• Chinese SOEs in Africa: Shenzhen Energy's equity stake in Ghana's Sunon Asogli Power Plant exemplifies the shift from EPC to Build-Operate-Own (BOO) models. While this approach enhances long-term returns, it also exposes firms to antitrust reviews and geopolitical risks, necessitating robust dispute resolution strategies through institutions like the Hong Kong International Arbitration Centre (HKIAC) Chinese Entities Lead in Rising Cross-Border Disputes^[4].

Conclusion

The energy EPC sector's future hinges on its ability to navigate antitrust scrutiny while fostering innovation. As regulatory bodies intensify enforcement and geopolitical tensions persist, firms must prioritize compliance, diversify supply chains, and align with global sustainability goals. For investors, the key lies in identifying projects that balance regulatory resilience with strategic agility—those that recognize antitrust compliance not as a cost, but as a catalyst for long-term value.