First-mover advantage certainly doesn’t seem to apply to oil M&A. With Brent crude now below $60 a barrel, taking many exploration and production stocks down with it, speculation is rife about bigger oil majors taking the opportunity to scoop up smaller rivals.
But the market’s reaction to two deals announced this week suggests caution is in order. First, Australia’s Woodside Petroleum WPL.AU +3.98% bought $2.75 billion-worth of liquefied natural gas assets from Apache. Then, Repsol of Spain said it would buy Canada’s Talisman Energy TLM.T +48.07% for $13 billion including assumed debt. The result: Shares in both Woodside and Repsol REP.MC -0.35% fell by about 3% Tuesday, underperforming both their home markets and energy peers.