Exxon Mobil Corporation (NYSE:XOM) seems all set to take over InterOil Corporation, as Oil Search has ditched plans to acquire the same company. The news comes after Exxon Mobil approached InterOil with an all-stock offer of $2.5 billion, approximately 10% higher than Oil Search’s bid of $2.2 billion deal.
Soon after Exxon’s bid, Oil Search released a statement in which it stated that it will not make a revised offer for the company. Sell-side firms, including Deutsche Bank have arrived on this merger and acquisition scene.
Deutsche Bank’s Take on Exxon Mobil’s Acquisition
The equity research firm believes that Exxon Mobil’s confirmation to purchase InterOil is the first such instance by the company since the start of downturn.
Moreover, the firm is of the opinion that the size of the deal is relatively small for the world’s largest publicly traded oil company, having minimal impact on its valuation. Deutsche Bank views this transaction as a high quality addition to its portfolio, and will prove to be quite accretive for the company.
Exxon Mobil has a longstanding history of buying out wide range of upstream assets, and it was already expected that one of the exploration and production (E&P) acquisition is on cards, as low oil prices wiped off billions of revenues and cash flows.
At a time when oil price is quite cheap as compared to 2014 levels, majority of the energy companies are accessing debt and equity markets to fill their coffers and to finance their daily operations. On the flip side, there are oil companies like Exxon Mobil, that are looking for opportunities by acquiring small cap companies.
The equity research firm believes that Exxon Mobil’s confirmation to purchase InterOil is the first such instance by the company since the start of downturn.
Moreover, the firm is of the opinion that the size of the deal is relatively small for the world’s largest publicly traded oil company, having minimal impact on its valuation. Deutsche Bank views this transaction as a high quality addition to its portfolio, and will prove to be quite accretive for the company.
Exxon Mobil has a longstanding history of buying out wide range of upstream assets, and it was already expected that one of the exploration and production (E&P) acquisition is on cards, as low oil prices wiped off billions of revenues and cash flows.
At a time when oil price is quite cheap as compared to 2014 levels, majority of the energy companies are accessing debt and equity markets to fill their coffers and to finance their daily operations. On the flip side, there are oil companies like Exxon Mobil, that are looking for opportunities by acquiring small cap companies.
Impact of Deal
Merger and acquisition pundits believe that Exxon acquisition bid is a blessing in disguise for Oil Search. The marriage of InterOil Corporation (USA) (NYSE:IOC) and Exxon will merge their respective LNG projects in Papa New Guinea. The acquisition is expected to lower the cost of production, and will become more competitive in an already oversupplied LNG market.
Merger and acquisition pundits believe that Exxon acquisition bid is a blessing in disguise for Oil Search. The marriage of InterOil Corporation (USA) (NYSE:IOC) and Exxon will merge their respective LNG projects in Papa New Guinea. The acquisition is expected to lower the cost of production, and will become more competitive in an already oversupplied LNG market.
The integrated oil and gas company already operates $19 billion LNG project will Oil Search in Papa New Guinea, while InterOil, Oil Search and Total SA are shareholders in the Elk-Antelope project. The French oil major company, Total expects to build another LNG facility worth $10 billion in the country.
By: Staff Writer (BidnessEtc).
Photo 1: Offshore Energy Today.
Photo 2: New York Times.
Photo 3: Myriad Design, Australia.
Review: Emerging Market Formulations & Research Unit, FLAGSHIP RECORDS.
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By: Staff Writer (BidnessEtc).
Photo 1: Offshore Energy Today.
Photo 2: New York Times.
Photo 3: Myriad Design, Australia.
Review: Emerging Market Formulations & Research Unit, FLAGSHIP RECORDS.
For The #FacebookTeam