We all know that water is essential for life, but how many of us see it as a critical investment opportunity? Seequent Environment Segment Director Dr Thomas D Krom writes.
In 2025, the water sector is poised for significant movement, and it’s not just about environmental stewardship; it’s about strategic business advantage. After a somewhat turbulent 2024 in terms of merger and acquisition activity, the landscape is shifting, and smart leaders need to pay close attention.
Think of it this way: water is becoming the new gold, but instead of a speculative commodity, it’s a fundamental necessity ripe for innovation and growth. The market is seeing a recalibration of value, driven by both necessity and opportunity. We’re not just talking about basic infrastructure anymore. The convergence of climate change, technological advancement, and regulatory shifts is creating a dynamic environment for strategic deals.
Here’s what’s on my radar, and what should be on yours:
Mergers and acquisitions are picking up
While 2024 saw a dip in deals, 2025 looks promising. We’re seeing a move towards more strategic acquisitions, particularly in places like Brazil, where water infrastructure is gaining serious traction. This isn’t just about numbers, but about accessing vital capabilities and technologies.
Mergers and acquisition activity in water infrastructure, particular in places like Brazil, is gaining pace in 2025.
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Valuations are solid
The water sector is proving its resilience, with consistent valuations, especially for small to medium-sized transactions. This reflects a growing awareness of water’s scarcity and essential nature, creating a “scarcity premium”.
Innovation is key
Forget old-school pipes and pumps. We’re seeing exciting advancements in everything from AI-driven water management systems to advanced desalination technologies. These aren’t just incremental improvements; they’re game-changers that can significantly reduce costs and enhance efficiency.
Water management systems have come a long way from pumps and pipes. There are game-changing innovations in this space which could slash costs and improve efficiency.
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Data is the new currency
The European Union’s data centre market is exploding, driving a demand for innovative water management solutions. The same is true of the semiconductor industry. Forward-thinking leaders are asking how to minimize water footprints while also optimizing performance, driving investments in new technologies that enable water recycling and alternative cooling.
Renewable energy intersects with water
The hydrogen and EV battery industries, essential for the energy transition, are also major water consumers. This creates a huge opportunity for new players to drive innovation in water purification, cooling and closed loop systems.
The reality is that water is not an isolated issue. It’s at the center of a complex web of challenges and opportunities. Ignoring the strategic imperative of water is not an option. It’s about aligning your business with long-term sustainability and profitability, while contributing to a more secure future.
Let’s make sure that we are ahead of the curve in these changing times, navigating the waters strategically, and not just reacting to the flow.