Five Trends Shaping US Infrastructure Transactions

Latham & Watkins welcomed rising leaders from across the infrastructure and energy industry to its annual US Infrastructure Academy for practical discussions about the legal, commercial, and regulatory forces shaping the deal market. Sessions covered M&A, joint ventures, hybrid capital, transactional insurance, and regulatory approvals, highlighting several themes that are increasingly influencing infrastructure transactions. 

Key Takeaways

1. Dealmakers Are Prioritizing Flexibility as Market Uncertainty Persists

One theme emerged repeatedly throughout the sessions: parties are more frequently using creative deal structures to bridge gaps in valuation, financing, and risk allocation. 

Earnouts, deferred payments, seller notes, rollovers, reinvestments, and hybrid capital solutions are enabling buyers and sellers to move transactions forward even when they have different views on value or limited access to capital. These structures provide flexibility while helping parties to manage market volatility, funding constraints, and evolving business conditions.

Participants also emphasized that greater creativity often comes with greater complexity. Paying careful attention to governance rights, liquidity protections, operating covenants, and dispute-resolution mechanisms is essential to ensuring these structures achieve their intended objectives.

2. Governance Is Becoming a Critical Value Driver in Infrastructure Partnerships

As infrastructure projects continue to grow in scale and complexity, joint ventures remain a popular way to combine capital, expertise, and operational capabilities. However, successful partnerships depend on more than economics alone, and discussions around operator and management agreements highlighted how governance frameworks increasingly determine whether a venture can create long-term value.

Market participants are dedicating significant attention to decision-making authority, performance metrics, compensation structures, related-party protections, and step-in rights. For asset-intensive projects in which operators are often affiliated with one of the venture partners, aligning incentives and establishing clear accountability mechanisms can be just as important as negotiating the underlying commercial terms.

3. Regulatory Planning Is No Longer a Late-Stage Exercise

Regulatory approval considerations are influencing transaction strategy from the earliest stages of a deal. Discussions on Hart-Scott-Rodino (HSR) and Committee on Foreign Investment in the United States (CFIUS) reviews underscored the importance of understanding potential regulatory hurdles before signing a transaction.

Participants discussed how merger review timelines, foreign investment scrutiny, mandatory filing requirements, and potential mitigation measures can affect deal certainty, financing timelines, and closing conditions. For infrastructure assets — particularly those involving critical technologies and infrastructure, sensitive data, or foreign investment — regulatory planning has become a fundamental component of transaction execution rather than simply a box to check near closing.

4. Buyers Are Paying Greater Attention to Risk Transfer and Post-Closing Protection

Transactional risk management continues to evolve as representation and warranty (R&W) insurance becomes routine in M&A transactions. Participants considered the continued growth of the market and the increasing sophistication of claims processes, underwriting standards, and policy structures.

The discussion reinforced that insurance is most effective when it is integrated into the transaction process at an early stage. Diligence quality, policy negotiation, underwriting preparation, and claims documentation all have an impact on outcomes. Participants also examined how claims experience across the market is shaping underwriting expectations, particularly for energy and infrastructure assets where issues relating to asset condition, contracts, environmental matters, and regulatory compliance frequently receive more attention.

5. Process Matters More Than Ever

Whether negotiating exclusivity agreements, structuring hybrid capital investments, managing earnouts, or navigating regulatory reviews, successful transactions depend more and more on disciplined process management. Throughout the Academy, participants stressed the importance of aligning legal, commercial, financing, and operational stakeholders early and maintaining that alignment throughout a transaction.

Exclusivity provisions are no longer viewed simply as boilerplate terms. In complex infrastructure and energy transactions, they serve as important tools for balancing competitive dynamics, protecting diligence investments, and accelerating deal execution. Similarly, increasingly sophisticated capital and governance arrangements require close coordination across deal teams to ensure that transaction documents function as a cohesive whole.

Looking Ahead

Latham’s 2026 US Infrastructure Academy highlighted that infrastructure transactions continue to evolve in response to changing financial markets, regulatory scrutiny, and investment opportunities. While deal structures may grow more sophisticated, the core fundamentals remain unchanged: thoughtful governance, rigorous diligence, strategic risk allocation, and early planning remain essential to successful execution.