Oil and gas in the capitals ///

The oil industry wave of mergers and acquisitions first hit Norway in 1999, when Norsk Hydro, assisted by Statoil (the country’s two major oil companies), swallowed Saga, the third one. Mergers and acquisitions were, at the time, commonplace in the global oil industry. This case was exceptional, however, in two ways. First, the three parties were essentially upstream firms, Saga being exclusively E&P. Second, the two initiating companies were wholly or majority government-owned. This showed that some forces that drive private industry restructuring also apply to state capitalism. This thesis is confirmed spectacularly by the merger of Statoil and Norsk Hydro’s oil and gas division, which, in some ways, is the former’s acquisition of the latter. Remarkably, the operation has been run by the state’s oil companies without the government—the owner and the regulator—being informed until the last stage. Nevertheless, the outcome is a large company—the world’s largest offshore operator.

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