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2020 oil and gas mergers and acquisitions
Bigger M&A deals, fewer transactions
Except for a series of mega-deals, 2019 was a slow year for oil and gas mergers and acquisitions. Will this trend continue in 2020? Our annual outlook reflects on recent deal activity, explores the impact of trade and commodity prices, and outlines five predictions for the year ahead.
On the horizon: Oil and gas M&A deals in 2020
There were several large headline transactions in 2019, but overall deal count, particularly for upstream transactions, declined as low commodity prices persist globally. Many oil and gas companies continue to struggle to adapt to current, challenging markets and to demonstrate positive returns on capital employed. The difficult investment environment, coupled with restricted access to financing, has dampened dealmaking—and that appears unlikely to change in the near term, as oil and gas prices in 2020 are expected to remain volatile.
While deal levels may be similar to 2019, we expect the types of deals to evolve along with both the oil and gas markets, as well as companies’ underlying balance sheets. That should mean more divestitures by large companies, more purchases from smaller companies, and an overall realignment of portfolios.
Five M&A trends to watch in 2020
Deal activity across the value chain
Our annual comprehensive look at M&A activity
Deloitte Upstream Diversification Index two-part series