<
--------------
STRATFOR.com
--------------
THE INTERNET SOURCE FOR GLOBAL INTELLIGENCE
If it’s in the news, it’s too late...
ChevronTexaco Wins Big in Dynegy-Enron Deal
November 20, 2001
Summary
Dynegy Inc., the sixth-largest U.S. energy trader, agreed Nov. 9 to buy out its top rival, Enron Corp. The big winner in the deal, however, is ChevronTexaco. Its links with Dynegy will tip the global energy market in unexpected directions.
Analysis
Capping a month of major headlines for the energy industry, Dynegy Inc. agreed Nov. 9 to buy out the top U.S. energy trader, Enron Corp., for approximately $8 billion in stock and $15 billion in assumed debt.
As shocking as it is that America's second-largest energy firm fell to a company only one-fourth its size, the real change in global energy politics is not the buyout of Enron but the rise of ChevronTexaco. The San Francisco-based firm's deepening links with Dynegy will reinvigorate it, sparking a new round of competition among the global energy majors.
For example, Dynegy is now the country's largest energy marketing firm, giving ChevronTexaco's natural gas a cost advantage in markets normally dominated by larger competitors. Also, look for ChevronTexaco to link arms with Dynegy abroad in sectors Enron once dominated.
ChevronTexaco aside, Dynegy is getting a great deal in its acquisition of Enron. Houston-based Enron is the nation's seventh-largest company, with revenues of $139.7 billion for the first nine months of 2001, according to the Wall Street Journal. Also, Enron is a respected leader in energy projects around the world, and it holds a dominant position within the U.S. distribution network. Even if the takeover completely falls apart, an escape clause in the contract ensures Dynegy will pick up the Northern Natural Gas Pipeline network, arguably the most valuable of Enron's many assets.
+++++++ NOTICE +++++++
This is an abbreviated version of a full-length STRATFOR report previously seen by our Members. To access STRATFOR's complete range of in-depth, objective intelligence and analysis on the globe, including our award-winning daily full text and graphics reports, click here and become a Member today!
+++++++ NOTICE +++++++
(Story Source)
(c) 2001 Stratfor, Inc.
Dan
ChevronTexaco Wins Big in Dynegy-Enron Deal . . .