Weak commodity environment to drive increase in oil & gas sector M&A, Brunswick survey finds.
DALLAS, TX, March 1, 2016 - Brunswick Group LLC, an advisory firm specializing in critical issues and corporate relations, today released the results of its 2nd Annual U.S. Oil & Gas M&A Survey.
This year’s survey found that 62% of respondents believe that falling energy prices, distressed sales and bankruptcies will lead to increased energy M&A activity in 2016 – a 10 percentage point rise from last year’s survey. However, of the respondents who see a decrease in M&A activity, more than 70% believe that the current regulatory environment is inhibiting an increase in global M&A activity.
Other key findings from the survey responses:
- 47% believe that upstream players will take the top spot as the largest target for M&A in 2016, and 51% expect that strategic buyers will be active in U.S. oil & gas sector M&A, more than private equity, industry/corporates, hedge funds or sovereign wealth funds;
- 78% foresee U.S. domestic consolidation outweighing cross-border deals in the 2016 energy space. Most respondents expect the majority of foreign investment in the U.S. energy sector to come from Asia, followed closely by the Middle East and Europe;
- 58% believe that activist investors will play a role in driving oil & gas M&A activity.
- 73% of respondents say crude oil prices are more likely than natural gas to recover in 2016.
“Despite 2015 being a record year for global M&A, the oil and gas sector in the U.S. was less active, which came as somewhat of a surprise to many of last year’s survey respondents,” said Mark Palmer, Partner and U.S. head of Brunswick’s Energy & Resources practice group. “As we look ahead in 2016, there is a strong sense within the industry that headlines will be dominated by bankruptcies to a greater extent than cost-saving combinations. However, there is a consensus that we will see an increase in deal activity from last year as a result of an even lower for even longer energy price environment that could lead to distressed sales.”
The survey was distributed and analyzed by Brunswick Insight and included the views of 106 bankers, industry advisors, investment managers, and analysts specializing in the energy sector across the U.S. Brunswick Insight is Brunswick’s specialist opinion research practice, focused on understanding the views of opinion formers around the world.
For more information on Brunswick’s 2nd Annual U.S. Oil & Gas M&A Survey, please visit http://bit.ly/BGMAog.
About Brunswick Group
Brunswick is an advisory firm specializing in critical issues and corporate relations. Founded in 1987, Brunswick is an organically grown, private partnership with 23 offices around the world.
Brunswick is consistently ranked No. 1 in global M&A by deal value. In 2015, the firm advised on over 100 deals valued at $637 billion in the U.S. and over 200 deals valued at $974 billion globally.
Andrew Von Kerens
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