Mergers and Acquisitions: What’s Happening in the OFS Industry?
M&A s in the OFS industry
According to a Deloitte Oil & Gas Mergers and Acquisitions Report, the oilfield equipment and services (or OFS) industry saw some significant mergers and acquisitions (or M&A) in 1H14.
However, following energy price weakness, M&A activity became sparse in 2015. The only big-ticket merger in 2015 was Schlumberger’s (SLB) acquisition of Cameron International. Read more on this acquisition in Market Realist’s Wedding Season in Energy OFS: SLB’s Proposed Acquisition of CAM.
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M&A activity looks to be picking up in 2016. The OFS industry saw 21 M&A transactions in 1H16. These transactions had a total deal value of $16.8 billion, including the proposed $14.5 billion merger of Technip and FMC Technologies (FTI). This merger was the largest deal announced across all oil and gas sectors in 1H16. Read more about the FTI-Technip transaction in Market Realist’s FMC Technologies and Technip to Form Energy Services Giant.
Are some M&A deals failing?
Not all deals have gone through successfully recently. On April 30, 2016, Halliburton (HAL) and Baker Hughes (BHI) terminated their proposed merger agreement following regulatory concerns over antitrust issues. According to the terms of the transaction, BHI received a $3.5 billion termination fee from HAL following the termination. Read about the effects of the transaction’s failure in Baker Hughes–Halliburton Merger Falls Through: Impact on BHI.
Baker Hughes makes up 0.14% of the SPDR S&P 500 ETF (SPY). On November 1, BHI agreed to merge with General Electric’s (GE) Oil & Gas division. Check out Market Realist’s GE to Partner with BHI? The Changing Oilfield Services Landscape to learn more.
Next, we’ll discuss some of these OFS companies’ business profiles.