Financial Deal Insights Energy & Utilities March 2008

Introduction
Ongoing market developments, particularly in terms of liberalization, have resulted in continued energy sector M&A. Datamonitor's monthly Financial Deal Insights series provides a concise yet comprehensive overview of this activity in the energy and utilities sector. It offers a unique insight into both deal activity, deal rationale and the market fundamentals driving the sector.

Report Highlights
Highlights
M&A activity in the upstream and midstream sectors recorded a decline of 44.4% and 54%, respectively, while downstream recorded an increase of 28.6% over the last six month average.

M&A activity in the utilities sector was 44.2% lower compared to the last six month average; no private equity investment was recorded.

The energy and utilities sector recorded 121 M&A deals during March 2008, a decrease of 39.5% over the last six month average.
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TABLE OF CONTENTS
DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
Record oil prices have started to reduce M&A activity, as players in the energy sector favor other investments 2
Oil markets remain extremely tight, exposing prices to even minor supply disruptions 2
OPEC is coming under increased pressure to increase output in the short term 3
The longer-term investment in the oil sector needed to address the fundamentals will critically depend on favorable political drivers in the medium to long term 4
M&A activity will be affected until oil prices ease, but countervailing market liberalization and internationalization strategies will ensure that M&A activities do not grind to a halt 4
APPENDIX 6
Methodology 6
Ask the analyst 6
Datamonitor consulting 6
Disclaimer 7
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LIST OF FIGURE
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