Source: Evaluate Energy. Note: Deal values are adjusted for inflation.
The
second quarter of 2015 exhibited the largest amount of oil companies'
merger and acquisition (M&A) activity by value since fourth-quarter
2012. The announced merger between Royal Dutch Shell and BG Group in
early April accounted for $84 billion of the $115 billion quarterly
total.
Without the Shell-BG merger, however, the value of deals in
the second quarter of 2015 would have totaled $31 billion, $18 billion
higher than first-quarter 2015, which was the lowest since at least
2008. The 137 deals announced in the second quarter was the lowest
number of deals since fourth-quarter 2008 and 42% below the 235 median
quarterly number of deals over the previous two years, indicating less
breadth of activity.
Companies often merge with or acquire other
companies or their assets in an effort to achieve longer term growth,
economies of scale, access to new technologies, diversity of market
exposure, or a combination of factors. The buying or selling company may
see a valuable opportunity that aligns with its own goals and
expectations in deciding to purchase or sell assets. Also, a company may
feel that it could benefit from adding new assets that complement its
current strengths or by developing expertise in a market segment it
currently does not participate in.
M&A deals vary in size and
can sometimes take months of negotiating to complete. M&A activity
often reflects how market participants view future opportunities. The
availability and cost of financing as well as legal factors also play a
critical role in the value and amount of M&A activity.
http://www.theenergycollective.com/todayinenergy/2252082/beyond-shell-bg-oil-company-merger-activity-down
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