Commodities poised for new round of M&A – Barings exec

The commodities sector is poised for another round of mergers and acquisitions driven by low prices and a drive to improve shareholder returns, according to the head of global resources at Barings.

It’s a similar picture to the late 1990s, when oil prices fell to $15 a barrel, Duncan Goodwin said. A flurry of deals followed - BP bought Amoco and Arco, Chevron acquired Texaco, and Exxon acquired Mobil. “The last time there was a benign or weaker commodity environment, we saw very significant M&A. This time around, the resources sector is seeing M&A in the form of Royal Dutch Shell & BG Group, Halliburton and Baker Hughes in oil services, fertiliser firm Potash Corp’s attempt to buy K+S, and Monsanto’s bid for Syngenta in crop protection and seeds,” Goodwin said. “These are the big companies, not the 20th largest in the space merging with the 25th largest – this is the second and third, or the third and fourth. These are major restructuring and consolidations, like we saw back in the 1990s when the oil price was very low, and we...

Published

Andrea Hotter

August 17, 2015

03:00 GMT

New York