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January 24, 2020

Quarterly midstream M&A deals review – Q4 2019

GlobalData’s latest report, Quarterly Midstream M&A Deals Review – Q4 2019, shows that a combined value of $23.8 billion in mergers and acquisitions (M&A) was announced in the midstream sector in Q4 2019.

By GlobalData Energy

GlobalData’s latest report, Quarterly Midstream M&A Deals Review – Q4 2019, shows that a combined value of $23.8 billion in mergers and acquisitions (M&A) was announced in the midstream sector in Q4 2019.

This showed a 21% decrease from $30.3 billion in M&A deals announced in the previous quarter. A year-on-year comparison shows a 9% increase in the number of deals and a significant 42% decrease in values in Q4 2019 compared with 106 deals with a combined value of $40.7 billion in Q4 2018. During the quarter, there were 24 midstream M&A deals with values higher than $100 million, accounting for $22 billion.

Hess Midstream Partners’ acquisition of Hess Infrastructure Partners (HIP) from Hess and Global Infrastructure Partners for $6.2 billion was the top deal registered in the midstream industry in Q4 2019. The acquisition included Hess Infrastructure’s outstanding economic general partner interest, incentive distribution rights in Hess Midstream and 80% interest in Hess Midstream’s oil and gas midstream assets, Hess Infrastructure’s water services business, outstanding economic general partner interest and incentive distribution rights in Hess Midstream.

Hess Infrastructure Partners is a midstream energy joint venture (JV) between Hess Corp and Global Infrastructure Partners. HIP owns multiple operating companies that provide a diverse mix of midstream oil and natural gas services, including crude oil and natural gas gathering systems, a natural gas processing and fractionation facility, crude oil export assets and an underground propane storage facility in the core of the Bakken and Three Forks Shale in the Williston Basin area of North Dakota, US.

On the volume front, the number of M&A deals increased by 13% from 103 in Q3 2019 to 116 in Q4 2019, of which 59 were cross-border transactions and the remaining 57 were domestic transactions. Europe was the destination of choice for cross-border M&A activity in Q4 2019, recording 15 cross-border transactions in the quarter.

Regionally, North America remained the frontrunner in terms of deal value and the number of deals in Q4 2019, with 78% and 28% shares, registering a combined M&A value of $16.2 billion from 33 deals.

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Europe accounted for 23% of the global acquisitions market in Q4 2019, comprising 28 acquisitions, of which 15 were cross-border and the remaining 13 were domestic acquisitions, while Asia accounted for 21 global deals or 18% in Q4 2019, of which 11 were cross-border acquisitions and the remaining ten were domestic acquisitions.

Africa and Oceania registered 15 and 19 deals respectively in Q4 2019 and South America accounted for 3% of global deals or three deals, while the Middle East recorded only one M&A deal in Q4 2019.

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