The role of brand in M&A: Energy


What we found

M&A in the energy sector was the least common in our selected data set, making up just under 3% of the U.S. M&A transactions from 2019 to 2023. And of that selection, 82% of transactions—a significant majority—chose a branding decision where both entities remained independent with separate branding.

What we found

One example, in particular, epitomizes this trend.

In November of 2021, JERA Americas Inc. purchased the Freeport LNG Development—one of the largest U.S. exporters of LNG, or liquified natural gas. Post-deal, as of publication of this report, both brands remain independent, with individual, unlinked websites and unique visual and verbal identities—contradicting a property (the propensity to mix) of their lucrative resource.

The remaining 18% of transactions in the energy sector followed an acquisition strategy where one brand was absorbed into the purchasing brand.

This strategy was common when the acquirer already owned a portion of the acquiree. For example, in May 2022, Harvest Midstream bought out the remaining interest in Arrowhead ST Holdings from other venture partners. Post-deal, Arrowhead ST Holdings was fully acquired into Harvest Midstream, with no remaining independent brand assets, like the name, visual identity, or website.

Other branding strategies, such as creating a net-new brand or leveraging co-branding/endorsed branding efforts, occurred 0% of the time in the energy sector.


Source link

Leave a Comment