M&A deals in equipment and services up in value in Q4 2018 from previous quarter

17 May 2019 (Last Updated May 17th, 2019 13:37)

M&A activity represents a significant increase from the deals announced in the previous quarter.

M&A deals in equipment and services up in value in Q4 2018 from previous quarter

A combined value of US$15.4 billion in mergers and acquisitions (M&A) was announced in the oil and gas equipment and services sector in Q4 2018, according to a recent report by GlobalData.

Oil & Gas M&A Q4 2018

The report, entitled ‘Quarterly Equipment and Services M&A Deals Review: Q4 2018’, found a significant increase of 33% from the US$10.3 billion in M&A deals announced in the previous quarter.

A year-on-year comparison shows an increase of 14% in the number of deals and a decrease of 55% in value, compared with Q4 2017, when there were 88 deals worth a combined value of US$23.9 billion.

Rowan Companies’ agreement to merge with Ensco, an offshore drilling company, was the top deal registered in Q4 2018. The transaction is estimated to have an enterprise value of approximately US$4.3 billion.

Under the terms of the amended agreement, each Rowan Companies shareholder will receive 2.75 Ensco shares, for each share held. Following the completion of the transaction, Ensco shareholders will own approximately 55% stake and Rowan Companies shareholders will own approximately 45% stake in the combined company

Equipment and services M&A deal value and count, Q4 2018

Source: Deals Analytics, GlobalData Oil and Gas

On the volume front, the number of M&A deals increased by 16%, from 84 deals in Q3 2018 to 100 in Q4 2018, of which 25 were cross border transactions and the remaining 75 were domestic transactions. Americas was the destination of choice for cross-border M&A activity in Q3 2018, recording 12 cross-border transactions in the quarter.

Regionally, Americas led the global M&A market in terms of volume and value, with 67 deals worth a combined value of US$13.5 billion, representing 67% of global deals and 88% of global deal value, in Q4 2018.

The EMEA region accounted for 28% share in Q4 2018, comprising 28 acquisitions, of which 11 were cross-border and the remaining 17 were domestic acquisitions. Asia-Pacific region accounted for five global deals, or 5% in Q4 2018, of which two were cross-border acquisitions and the remaining three were domestic acquisitions.