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Robert James Reviews Oil and Gas M&A TrendsAs mentioned in: Oil & Gas Monitor
October 29, 2012
Robert James, a partner with Pillsbury’s finance section in San Francisco, writes about oil and gas mergers and acquisitions trends in 2012, and notes that while there were fewer in number in 2012, the transactions were larger in size compared to 2011.
According to S&P Capital IQ, there were 626 oil and gas industry deals worldwide, with values of at least $1 million in the four quarters ending on September 30, 2012, compared to the 799 transactions in the previous 12-months. However, this year’s deals were valued at $249 billion, while last year’s total was $235 billion.
M&A activity in this industry, as for any economic sector, stems from at least two major motivations, James writes. One is financial investors desiring to enter or leave a segment whose revenues are perceived to be growing or stagnating, relative to securities. The other is the drive of strategic long-term incumbents to segregate business lines, either for optimization of business synergies or to enhance the market’s valuation of the resulting enterprises.
Looking ahead, M&A activity in the oil and gas sector will be influenced by several legal and regulatory factors, and those will drive the development of the industry’s projects, James concludes.