Could a Big Oil Merger be on the Horizon?
The American duo’s valuation lead is tangible even though Shell’s 2022 results, for example, have doubled year-on-year, matching those of its US peers. A notable reason for the favourable American valuations is that as oil prices have soared coupled with US-based drillers looking more attractive than those in Europe whose strategy suggests that they are pressing into potentially lower-return renewable energy.
Will we see Exxon or Chevron undertake a transatlantic swoop? Citi analysts think a big oil merger could create attractive cost synergies and adequate returns. However, will US shareholders want the bother of a mega-deal in lieu of huge buybacks and dividends?
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