Developments and Trends of Mergers and Acquisitions in the Energy Industry

Abstract

Developments, trends, business climate, conditions, factors influencing the efficiency and results of mergers and acquisitions (M&A) in the energy sector are explored in this research. PESTLE (political, economic, social, technological, legal, environmental) analysis was performed in order to determine the driving forces of M&As in the energy industry. Considering the motivation and main questions of the study, a sample of global M&A deals that have occurred during the period 1995–2020 has been analyzed. DataStream 5.1 database by Thomson Reuters was employed to identify the sample of global energy companies that took over another company in the period 1995–2020. According to the research, while the role and presence of M&As in the energy industry are increasing, the purpose of the M&A deals has changed remarkably. During 1995–2010, most M&A events were conducted in order to explore synergies and benefit from cost reduction. Since the last decade, firms are pursuing M&As in the search of growth opportunities, ensuring supply and reflecting demand for green development of ecological environment and ongoing changes in the nature of energy.