Advantages and Disadvantages of International M&A Strategies of Energy Companies: Cases of Rosneft-China Company Limited and British Petroleum-BHP Billiton

The present study is devoted to identification of positive and negative effects of M&A strategies used by companies operating in developed and emerging oil and gas markets. The methodology includes applying Discounted Cash Flows, Gordon model and event study analysis along with studying management surveys, mass media and consulting reports. The first chapter of the research examines theoretical bases of the global M&A phenomenon: advantages, disadvantages, motives and key evaluation metgods. The second chapter reviews in detail global and Russian M&A markets and oil and gas sector in partucular and research findings about outcomes generated by transactions. The final part contains brief description of companies and their recent megadeals, evaluation of the deals using two income methods and conclusions on the transactions’ economic and stock market effect. The results demonstrated positive NPV of consolidated company in a domestic market as well as stable growth of its share price in short and medium terms. For developed market NPV of consolidated company was negative and share price has increased only for a target company. The Hypothesis stated in the reseach was confirmed only partially - international M&A transactions have distinct advantages but companies operating in emerging market did not show a higher sensitivity to extrernal factors