Shell eyes BP takeover as rival's stock slumps - Bloomberg
Photo: Shell considers acquiring its largest competitor (flickr.com)
Shell, the British oil and gas company, is considering acquiring BP as its competitor’s stock falls and oil prices decline. If the deal goes through, it could become one of the biggest in the oil industry in recent years, reports Bloomberg.
According to Bloomberg, Shell Plc is evaluating the possibility of acquiring BP Plc with the help of advisers. However, the company expects further declines in BP's stock and oil prices before making a decision on the potential deal.
Sources told the agency that the final decision will likely depend on whether BP's stock continues to fall. Over the past 12 months, BP's stock has already lost nearly a third of its value due to the failed transformation plan and the drop in oil prices.
Initial discussions
Shell may also wait for BP to reach out or for another potential buyer to emerge. Internal calculations could help Shell respond more quickly if developments unfold, sources say.
The discussions are still in the early stages. Shell is also considering alternative scenarios, such as focusing on share buybacks or smaller acquisitions. According to Bloomberg, other major energy companies are also analyzing the possibility of participating in the deal.
"As we have said many times before, we are sharply focused on capturing the value in Shell through continuing to focus on performance, discipline, and simplification," said a Shell spokesperson.
BP declined to comment.
One of the largest deals in history
A successful merger of Shell and BP would become one of the largest deals in the history of the oil industry, combining two British giants that have been rivals for decades. However, in recent years, their strategies have diverged significantly.
Currently, Shell's market capitalization stands at around £149 billion (approximately $197 billion), more than double BP's £56 billion.
Oil price drop
As a reminder, the oil market is in turmoil. Donald Trump's trade war and the drop in demand have led to the sharpest price collapse in recent years.
Since the beginning of April, Brent crude has fallen by 15.4%, while WTI dropped by 17%, marking the largest percentage decline since November 2021.
Both benchmarks dropped sharply after US President Donald Trump's April 2 announcement of tariffs on all imports. China's retaliatory tariffs escalated the situation, sparking a full-blown trade war between the world’s two largest oil consumers.
