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TE Connectivity to Acquire Richards Manufacturing for $2.3 Billion

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TE Connectivity (TEL.N) announced it will acquire utility grid products manufacturer Richards Manufacturing Co for approximately $2.3 billion in cash, aiming to bolster its position in the electrical utilities sector amid surging power demand.

The acquisition comes as the power needs of data centers are expected to double within five years due to the rapid development and adoption of artificial intelligence. Demand is projected to rise from 176 TWh in 2023 to between 325 and 580 TWh by 2028.

President Donald Trump recently supported a $500 billion investment pledge by tech companies and investors to build infrastructure for AI facilities, highlighting the sector’s growing energy demands. Additionally, aging grid infrastructure, increased extreme weather events, and a shift toward greener energy sources are driving the need for grid upgrades and more resilient systems.

TE Connectivity CEO Terrence Curtin said, “The acquisition of Richards Manufacturing aligns with our strategy and positions us to further capitalize on an accelerating grid replacement and upgrade cycle in North America.”

Following the news, TE Connectivity’s shares rose about 4% in pre-market trading.

The Galway, Ireland-based company will acquire Richards Manufacturing from funds managed by Oaktree Capital Management, L.P., and the Bier family, long-time owners of the business. The deal is expected to close in June, financed through a combination of cash and new debt.

Once completed, Richards Manufacturing will become part of TE’s Industrial Solutions segment, contributing an estimated $400 million to annual sales. The acquisition is expected to enhance TE’s sales growth and adjusted operating margins, with projected accretion of about 10 cents to adjusted EPS in the first full year.

Goldman Sachs & Co. LLC is serving as TE Connectivity’s financial advisor, with Davis Polk & Wardwell LLP providing legal counsel.

Energy Transfer Signs Long-Term Natural Gas Supply Deal with CloudBurst

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Energy Transfer (ET.N), a leading U.S. pipeline operator, announced a long-term natural gas supply agreement with CloudBurst Data Centers, a private company based in Denver. This deal focuses on supporting the development of CloudBurst’s data center in Central Texas. Shares of Energy Transfer rose by 2.1% following the announcement.

As power demands from AI continue to rise and grid infrastructure advances slowly, many data centers are seeking more direct energy sources, bypassing traditional utilities. This shift is expected to significantly increase natural gas consumption in the coming years.

Under the agreement, Energy Transfer will supply up to 450,000 million British thermal units (MMBtu) of firm natural gas daily through its Oasis Pipeline to CloudBurst’s campus near San Marcos, Texas. The supply is contingent upon CloudBurst making a final investment decision (FID) with its customer. The natural gas will be used to generate nearly 1.2 gigawatts of electric power for the data center’s operations, with the supply set to continue for at least 10 years starting with Phase 1 of the project.

This agreement marks Energy Transfer’s first commercial arrangement to directly supply natural gas to a data center. RBC Capital Markets analyst Elvira Scotto viewed the deal as a promising step for midstream companies looking to expand into the AI and data center sectors.

CloudBurst is expected to make its FID later this year, with the facility potentially becoming operational by the third quarter of 2026.

Mitsubishi Heavy Sees Strong Gas Turbine Demand Despite AI Advances

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Mitsubishi Heavy Industries (MHI) expects continued strong demand for gas turbines, even if data centers require less electricity due to more efficient AI models such as China’s DeepSeek. Chief Financial Officer Hisato Kozawa stated that while DeepSeek’s performance remains unproven, it does not alter the broader trend of rising global power consumption.

Kozawa also noted that last week’s market sell-off, driven by DeepSeek’s emergence, led to MHI being traded as an AI-related stock for the first time, a development he found notable.

On Tuesday, MHI reported record third-quarter earnings and raised its annual profit forecast for the financial year ending in March. The company now expects a net profit of 240 billion yen ($1.55 billion), an increase of over 8% from its previous guidance, driven by strong gas turbine sales for power plants.

MHI’s stock has more than doubled in the past year, supported by growing demand for jets, naval ships, and missiles amid Japan’s defense expansion. However, its shares closed at 2,218 yen on Tuesday, down 0.6% from the previous day, while the Nikkei 225 index rose by 0.7%.