Monday, October 06, 2003

More billion dollar mergers and acquisitions Yukos/Sibneft merger finalized Russian oil companies Yukos and Sibneft completed the deal we announced earlier. The $3 billion company, now called YukosSibneft, is the largest Russian oil company and the biggest merger ever. We earlier reported that the new company is the #6 oil producer in the world, but a recent Wall Street Journal has it pegged as #4. Already rumors are flying that US firms ChevronTexaco and ExxonMobil are vying to buy a 25% share in the company. This follows the recent deal between British Petroleum and another Russian oil company, Tyumen. In a related matter, Dutch/Shell Group announced it is stepping up its oil exploration investment in Russia and in (formerly Soviet) Central Asia/ From a $10 billion investment on the island of Sakhalin to smaller investments in Siberia and in Kazakhstan, keeps them pouring money into the vast Russian oil reserves. It's a sign of confidence in Russian stability that these big oil companies keep investing there. It's also an indication of the fact that the Russian reserves are the last buyable oil fields in the world. Scottish/Irish bank buyout Royal Bank of Scotland paid around a billion dollars to acquire Ireland's First Active PLC. The Royal Bank already owns Ulster Bank in Northern Ireland. Merging the two banks will make for the #2 Irish mortgage bank and the #3 savings bank in Ireland. Other major Irish banks are Allied Irish Bank and the Bank of Ireland. The Royal Bank of Scotland Group's parent bank was founded in 1717; it acquired Britain's National Westminster Bank in 2000. A Wall Street Journal article (10/8/2003) states that "Acquisition activity in the U.K. banking sector has stalled amid a decline in good acquisition targets and concerns abut competition after five years of consolidation, that has seen the number of banks in the U.K. fall by more than 20%." Vertical integration in Danish power Elsam AS, a leading Danish power producer, has agreed to buy Nesa AS, the country's biggest power distributor. The deal is worth $1.6 billion. Elsam is one of the world leaders in wind generation. The structure of power ownership is complex in Denmark. Nesa already owns a 36% stake in Energi E2 AS, which is the largest energy producer in Denmark and a rival of Elsam AS. Meanwhile, Dong AS, the government owned oil and gas company, owns 13% of Nesa. 5:57:51 PM

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