Shell Considers Potential Takeover of BP in Historic Oil and Gas Deal
Reports have surfaced that UK supermajor Shell and its advisers are contemplating a possible takeover of rival energy major BP, potentially setting the stage for one of the largest deals in the history of the oil and gas industry.
According to sources close to the matter cited by Bloomberg, Shell may be biding its time, waiting for BP to entertain offers from other potential buyers before making its move. The discussions within Shell’s circles regarding this strategic maneuver have reportedly been ongoing for several weeks.
While the prospect of a Shell-BP merger looms large, it is still in its nascent stages. Shell may ultimately decide to pivot towards share buybacks and smaller acquisitions rather than pursuing such a monumental merger.
If the deal were to materialize, it could mark one of the largest oil and gas transactions ever witnessed. With a market value of £145.6bn ($193.2bn), Shell significantly overshadows BP, valued at £55.9bn ($74.2bn). A combined entity from the two industry giants would boast a staggering market value exceeding $267bn.
BP CEO Murray Auchincloss had expressed his intent to steer BP back towards a fossil fuel-centric strategy earlier this year. However, the company’s financial performance has not reflected this pivot, with first-quarter profits plummeting to $1.4bn, a sharp decline from the $2.7bn recorded in the same period last year. BP’s shares have also endured a steep 30% drop over the past year.
On the other hand, Shell reported a dip in profits compared to the first quarter of 2024. Despite this, the company’s adjusted profits of $5.6bn surpassed analysts’ expectations.