Shell Denies Rumors of $80 Billion BP Acquisition

In recent developments, speculation surrounding a potential acquisition of BP by Shell has intensified, following a report from The Wall Street Journal suggesting that Shell was in early talks to acquire its British rival. This deal, valued at approximately $80 billion, would mark the largest transaction in the oil industry since Exxon’s acquisition of Mobil in the 1990s, as noted by Andrew Dittmar, a mergers and acquisitions analyst at Enverus Intelligence Research. On Wednesday, BP’s shares rose by over 10%, reaching a high of $32.94, as investors reacted to the acquisition rumors. However, Shell quickly denied these talks, emphasizing a focus on capital discipline and ongoing performance improvements. The company stated, "This is further market speculation. No talks are taking place." BP’s market capitalization hovers around $80 billion, but the consensus among analysts is that it's unlikely Shell would pursue a full acquisition of BP; more probable scenarios involve BP being sold in parts to various buyers if a deal were to materialize. BP has faced challenges in recent years, struggling to find a clear strategic direction while transitioning towards renewable energy, yet experiencing faltering profits. This lack of direction has contributed to ongoing speculation about BP as a possible takeover target. Analysts have cautioned that an acquisition might not yield significant benefits for Shell without an attractive valuation, as it could complicate its growth ambitions and raise antitrust issues. Energy experts have also raised concerns about potential job losses that might accompany a merger, reflecting broader implications on both companies’ futures. Currently, BP continues its strategic reset to regain investor confidence amid market volatility, which has seen its stock decrease by over 6% this year, despite attempts to stabilize shares following earlier declines.

BP plc shares experienced significant volatility recently following reports that Shell plc might be in early-stage discussions to acquire BP for an estimated $80 billion. On Wednesday, BP's stock jumped more than 10% to a session high of $32.94 after The Wall Street Journal reported the potential acquisition. However, a Shell spokesperson later denied that any such talks were occurring, stating that the company is focused on enhancing its performance and simplifying operations. Following the denial, BP shares declined, though they still recorded a slight increase of about 2%.