U.S. Big Oil Should Weigh Power Sector M&A, Morgan Stanley Says

The time is ripe for Exxon Mobil Corp. and Chevron Corp. to consider buying shale explorers and power utilities to improve returns and navigate the world’s transition to renewable energy, according to Morgan Stanley.

In a report predicting the beleaguered U.S. oil and gas industry is entering a phase of increasing mergers and acquisitions activity, the country’s two giant producers stand out as buyers in several hypothetical deals the bank identified.

“We expect M&A to play a key role in the industry’s shift toward ‘more returns, less growth,”’ Morgan Stanley analysts led by Devin McDermott said in the report published ...