[Solution]Challenges of Using M&A as a Strategy within the Energy Sector

Various organizations have experienced challenges when using M&A as a strategy during periods of oil prices down cycles. Studies indicate that although M&A has been…

Various organizations have experienced challenges when using M&A as a strategy during periods of oil prices down cycles. Studies indicate that although M&A has been an important strategy in addressing oil prices collapse in the previous years, it might not be an effective strategy to address the current challenges in the contemporary economy. Therefore concerns have been raised on the use of M&A as a strategy to deal will present challenges facing the energy sector. Various deals have been suggested that can be effective in addressing the challenges within the energy sector. These strategies include: mergers of equals, transacting assets and adopting a number of bolt-on acquisitions (Yılmaz & Tanyeri 2016, pp.110-117).
Studies have revealed that the credit crisis has adversely impacted on the goals of mergers and acquisitions thus hampering the effectiveness of this strategy in addressing oil prices collapse. The drop in oil prices has resulted in the drop of valuations of production and…….

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