Notwithstanding big headlines of deal making and consolidation in the energy sector, driven by cheap prices, the truth is few players have been making acquisitions. The smaller companies, usually in the later exploration or early development stages requiring substantial investment in a volatile price climate, are not seen as attractive opportunities in both oil & gas and metals & mining sectors.
Oil & Gas
There were 75 transactions in the North American Oil & Gas sector in Q4 2015, totaling C$28.1 billion. This is a 13% decrease in number of deals and a 32% decrease in deal value compared to Q3 2015. The largest announced deal of the quarter was Suncor Energy’s unsolicited C$4.3 billion all-share bid for Canadian Oil Sands.
Compared to Q4 2014, there was a 13% decrease in number of deals and a 52% decrease in deal value. 2015 saw 287 deals in the year totalling C$99.8 billion, a total decrease of 30% in deal volume and a 34% decrease in deal value compared to 2014, which saw 412 deals totalling C$151.3 billion.
Transaction scope includes explorers, producers, service companies and refineries.
Metals & Mining
There were 51 transactions in the North American Metals & Mining sector in Q4 2015, totaling C$2.2 billion. This is a 12% decrease in number of deals and a 56% increase in deal value compared to Q3 2015. The largest deal of the quarter was BlueScope Steel’s purchase of Cargill’s stake in the U.S. joint venture North Star for US$720 million.
Compared to Q4 2014, there was a 14% decrease in number of deals and 22% decrease in deal value. 2015 saw 202 deals in the year totalling C$10.3 billion, a total decrease of 23% in deal volume and a 49% decrease in deal value compared to 2014, which saw 261 deals totalling C$20.2 billion.
Calculations include property, land and lease acquisitions, joint ventures and minority and majority shareholdings that disclosed a transaction value and were announced within the time frame. Arm’s length and cancelled transactions were excluded. Exchange rates based on historical figures.
Source: Capital IQ.
Posted by Olga Ivleva, Range Advisors
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