Energy bankers are raking in fees as the sector eclipses financial services this year as the number one hotbed of merger activity. That makes M&A advisors with connections in oil and gas a hot commodity in Wall Street talent wars.
The energy industry has accounted for $130 billion of deals so far in 2010, Reuters Breakingviews reports. Its 46 transactions worth $500 million or more easily eclipse the financial sector's 31 such deals, according to Thomson Reuters data.
Rather than just high oil prices, the merger flurry "is mainly a result of a race to lock up resources," Reuters observes.
Merger advisers also owe a debt of gratitude to China, which is trying to feed surging domestic demand for energy. Acquisitions by Chinese national oil companies made up nearly 40 percent of the value of deals outside the United States in the first quarter of the year, according to IHS Herold. Bidding pressure from deep-pocketed Chinese companies - including Sinopec's purchase of a piece of Conoco's business in Canada's oil sands this week - pushes up the value of deals.
...With so many broad trends driving energy deals, even a retreat in the price of oil is unlikely to end the party for M.& A. bankers.
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