US President Joe Biden’s administration has stepped up scrutiny over mergers and acquisitions (M&A) in the oil and gas sector to tackle soaring energy prices, Reuters reported. The Federal Trade Commission (FTC) has extended the approval process for at least five M&A deals in the industry in the past three months, following consumers’ angst over skyrocketing retail fuel prices. The FTC is asking companies for additional information and documents in so-called second requests, which can delay regulatory clearance by several months.
Among the deals that received second requests were HollyFrontier’s $2.6-billion acquisition of Sinclair Oil, Safety-Kleen Systems $140-million purchase of motor oil collection and recycling assets from Vertex Energy, and EnCap Investments’ $1.5-billion takeover of EP Energy. Reuters reported that some other transactions also received second requests but did not identify them.
Industry analysts said second requests are unusual for M&A deals in the upstream oil and gas sector and typically common for transactions in the midstream and downstream segments. They said that the regulators are trying to deter mergers. M&A deals among US oil and gas producers dropped from $33.4 billion in the second quarter to $18.5 billion in the third quarter.
