Who will sit on the oil throne?
(Note: companies that could be impacted by the content of this article are listed at the base of the story (desktop version). This article uses third-party references to provide a bullish, bearish and balanced point of view; sources listed in the “Balanced” section)
On
April 12th, Chevron Corp agreed to buy Anadarko Petroleum Corp for
$50 billion including debt. The
acquisition would make Chevron as big as Exxon and Shell and double down its
position in the Permian Oil Basin, a region between western Texas and
southeastern New Mexico. Not to be
outdone, Occidental Petroleum offered Anadarko a $57 billion takeout bid
starting the first takeover battle for a major oil company in years. As expected, energy stocks have been strong
in reaction to the news. Whether or not
the acquisition is the first in a wave of consolidation remains to be
seen. Below, we discuss several
arguments for and against further industry consolidation.
