Oil Industry Poised for Wave of Merger Activity

Share Article

Low natural gas prices a key driver of coming consolidation, says Booz & Company’s John Corrigan.

For the midstream sector, the time to buy is now. We’ve got about a 1- to 2-year horizon where the industry really needs to build out the infrastructure to support the shift from natural gas development to oil development.

The oil industry is poised to pump up merger activity.

Driven in large part by persistently low natural gas prices, industry players have come under significant cash-flow pressure. This has pushed them to look at investments in oil assets, John Corrigan, a Partner at Booz & Company, says in the latest episode of the Mergercast by Booz & Company podcast.

Indeed, the merger wave has already begun. Energy Transfer’s recent $5.3 billion acquisition of Sunoco represents an early step in this consolidation.

“For the midstream sector, the time to buy is now. We’ve got about a 1- to 2-year horizon where the industry really needs to build out the infrastructure to support the shift from natural gas development to oil development,” Corrigan says.

Interestingly, the coming transactions will not be limited to strategic buyers. Private equity companies are demonstrating an interest in the space.

“The pipelines and other oil-related midstream assets provide an opportunity to get some growth. But given the way they’re contracted and built, there’s also a lot of income security. So, we’ve seen a lot more private equity dollars coming into the market,” Corrigan explains

Corrigan provides additional detail about the coming consolidation, including likely merger targets and buyers, throughout Episode 41 of Mergercast by Booz & Company, which is titled “Oil Industry Consolidation.”

About Mergercast
Mergercast by Booz & Company is a podcast series exploring the world of mergers, acquisitions and restructurings. The current episode, No. 41, “Oil Industry Consolidation,” has a run time of 12 minutes and 3 seconds. Listeners can play the podcast on its homepage (http://www.booz.com/mergercast) or subscribe via RSS feed, e-mail or the iTunes store.

About Booz & Company
Booz & Company (booz.com) is a leading global management consulting firm focused on serving and shaping the senior agenda of the world’s leading institutions. Drawing on the talents and insights of more than 3,000 people in 60 offices around the world, we help our clients achieve essential advantage by working with them to identify and build the differentiating capabilities they need to outperform.

# # #

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Sharon Bially
FARRELL KRAMER COMMUNICATIONS, LLC
508-655-2676
Email >
Visit website