Why AES Stock Crashed Hard Today
Key Points
BlackRock is buying AES -- just like we thought it would five months ago.
The price BlackRock is paying for AES, however, is substantially less.
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AES Corporation (NYSE: AES) stock collapsed Monday morning, falling 17.2% through 2:15 p.m. ET after the company announced it will sell itself to a consortium led by private equity powerhouse BlackRock (NYSE: BLK).
The price: $15 per share -- 13% less than AES cost Friday.
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What we know about the BlackRock buyout
But wait! Aren't going-private transactions ordinarily considered good news by investors? A chance to cash out at a profit? Well, yes, usually they are. But here's what's different:
BlackRock's interest in AES was first reported five months ago, and back then, the rumor was that AES would cost BlackRock more than $40 billion, including assumed debt. Today's announcement makes it clear that number was optimistic.
As AES confirms, although BlackRock's $15 offer represents "a 40.3% premium to the 30-day volume weighted average share price prior to July 8, 2025, the last full day of trading prior to the first media report of a potential acquisition," the value of this transaction will end up being only $33.4 billion (including the assumption of debt).
In other words, BlackRock is paying 16.5% less than investors thought it would pay.
AES stock is therefore dropping in price by almost exactly that much.
What this means for AES investors today
The companies have already entered into a "definitive agreement," and plan to consummate this merger and acquisition either in late 2026 or early 2027. Unless some rival bidder emerges at the last moment, or government regulators object, the sale is pretty much a done deal. The chance of AES stock going back up anywhere near where it was on Friday, therefore, looks pretty slim.
On the other hand, if something happens to derail the deal, AES stock could actually go lower!
AES shareholders' best bet is probably to sell.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends BlackRock. The Motley Fool has a disclosure policy.
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