Baker Botts Energy Update: 2017 Roundup – Consolidation Continues Apace
BAKER BOTTS ENERGY UPDATE: 2017 ROUNDUP – CONSOLIDATION CONTINUES APACE 1 JANUARY 30, 2018 BAKER BOTTS ENERGY UPDATE: 2017 ROUNDUP – CONSOLIDATION CONTINUES APACE Contributors: Joyce Banks, James Barkley, Brooksany Barrowes, Emil Barth, Megan Berge, Jonathan Bobinger, William Bumpers, Joshua Davidson, Peter del Vecchio, Michael Didriksen, A.J. Ericksen, Jennifer Golinsky, Kyle Henne, Thomas Holmberg, Marcia Hook, Stephanie Jeane, Bill Lamb, Luckey McDowell, Steven Miles, Jon Nelsen, Jay Ryan, Carlos Solé, Mark Spivak, Andrea Stover, Andrew Stuyvenberg, Martin Toulouse, Susan Toumanian, Gregory Wagner, Elaine Walsh, Matthew West, Jason Wilcox, Baker Botts Tax Partners TO: CLIENTS AND OTHER FRIENDS OF THE FIRM Each year around this time we take the opportunity to review the transactions and other significant industry developments over the past year and offer our views on what they may mean for the coming year. Mergers and acquisitions activity in the energy industry during 2017 was higher than at any time in the last decade. Deal volume for transactions in the United States was over $213 billion, well above the $141 billion recorded in 2016 and above the previous high-water mark of $201 billion set in 2015.1 Initial uncertainty about the potential for tax reform was overcome by optimism about the economy generally, which kept stock valuations high and interest rates lower than at least some had thought they might be at this point in the business cycle. Utility stock valuations did decline somewhat toward year end, but it remains to be seen what effect lower valuations may have on the level of transaction activity in 2018. As usual, more than half the activity involved pipelines, midstream companies and MLPs, with $118 billion of announced transactions, up from about $76 billion the year before.
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