Chevron’s $53 Billion Acquisition of Hess Adds to Surge of Energy M&A Activity

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By georgeskef

  • Chevron acquires Hess in a $53 billion deal, adding to the surge of M&A activity in the energy industry.
  • The International Energy Agency predicts continued high demand for oil and gas in the coming years.
  • Chevron’s acquisition gives it access to oil fields in Guyana and the Bakken shale formation in North Dakota.
  • Exxon recently announced a $60 billion purchase of shale Pioneer Natural Resources, the largest oil and gas deal in decades.
  • October has seen over $139 billion in takeovers of publicly traded US companies, the highest amount since June 2019.
  • Goldman Sachs remains the leader in M&A advisory services with a 26% global market share.

Chevron made a stunning acquisition announcement recently during a period of deal drought on Wall Street: their $53 billion takeover of energy player Hess is another unexpected turn of events; adding to a string of mergers and acquisitions within the energy industry. Despite recent talk of green revolution, according to the International Energy Agency there will still be strong demand for oil and gas in coming years; with Hess giving access to lucrative oil fields in Guyana which were one of the decade’s major discoveries as well as North Dakota’s Bakken Shale formation; analysts estimate their combined control could reach $180 billion by 2027!

This deal is part of an increasing trend of significant activity within the energy sector. Just two weeks ago, Exxon announced a $60 billion purchase of Pioneer Natural Resources-the largest oil and gas deal since decades. Following record profits at major industry players due in part to conflict in Ukraine, M&A activity has since seen significant resurgence; Bloomberg reports over $139 billion worth of public takeovers so far in October; this figure marks three times what had happened since June 2019.

At a high level, other notable deals have also occurred outside of energy sector transactions. Roche announced a $7 billion acquisition of bowel disease treatment company Telavant while Disney is nearing multi-billion-dollar sale of Indian properties to Reliance Industries. While both deals are notable transactions, Chevron’s purchase of Hess and Exxon’s acquisition of Pioneer Natural Resources stand out among them all as being particularly noteworthy transactions.

Goldman Sachs leads in M&A advisory services. Even after its withdrawal from consumer banking, it holds 26% global market share for M&A advisory services so far this year; ahead of competitors Morgan Stanley and JPMorgan who each hold 22-21% share respectively.

One factor driving M&A activity could be perception that FTC Chairperson Lina Khan’s antitrust efforts are less impactful than initially anticipated. Microsoft’s completion of its $69 billion acquisition of video game giant Activision Blizzard suggests Khan may not be succeeding in her attempts to block major tech industry mergers; Microsoft won this deal and Khan faced setback. This represents one of the largest mergers ever seen within tech – making history while fulfilling Microsoft’s aim to dominate it all while Khan came away empty-handedly.

Chevron’s acquisition of Hess is another significant move in an ongoing flurry of mergers and acquisitions in the energy industry, wherein demand for oil and gas remains strong despite efforts toward environmental sustainability. Chevron’s acquisition of Hess and Exxon Mobil’s merger agreement with Pioneer Natural Resources are just two notable deals that have made headlines in the energy sector over recent months, representing over $139 billion worth of mergers and acquisitions of publicly listed US companies. October has been particularly active for M&A activity with over 14,000 takeovers taking place this month alone. Goldman Sachs continues to lead in M&A advisory services market while FTC Chairperson Lina Khan’s antitrust efforts face setback with Microsoft’s completion of its acquisition of Activision Blizzard. These events demonstrate how rapidly M&A landscape is changing; recent events are testament to this volatility in market.