Oil price crash: can M&A save the day? Part two.

In part one of this two-part series, we reported that M&A activity has halted as companies focus on survival. We believe this slowdown could extend for some months, as coronavirus and the OPEC+ price war generate unprecedented uncertainty. Should oil prices remain low throughout this year, we foresee deal valuations coming under increasing pressure as long-term assumptions are revised down and sellers begin to accept lower offers from a limited buyer pool. Further, we expect that low oil prices will expedite corporate-scale consolidation. Here, we take a closer look at how four distinct peer groups – the Majors, the Independents, the NOCs and private equity – might utilise M&A activity in response to the current crisis.