Shell has firmly denied any reports of the company planning to acquire its British oil rival BP, following widespread speculation and media coverage. Reports by The Wall Street Journal earlier this year suggested that the two companies were in early talks for a potential merger valued at up to £60 billion. If executed, a deal such as this would have been one of the largest in UK corporate history, and would reshape the global energy landscape, strengthening Shell’s position against American competitors such as ExxonMobil and Chevron.
However, Shell issued an official statement, clarifying that it was “further market speculation” and that “no talks are taking place”. Shell’s chief executive, Wael Sawar also denied Shell’s rumored plans earlier this year, as he told Financial Times, “We will always look at these things, but you are also looking to see what is the alternative. Right now, buying back Shell [shares] for us continues to be absolutely the right alternative to go for.” A spokesperson of the company added that Shell is currently focused on performance, discipline, and simplification. According to the UK Takeover Code, Shell’s public denial of a takeover bars it from making an offer for at least six months, unless an offer is made to them.
The speculations come as BP lost almost a third of its market value in the past year, falling to about £58bn in net worth. The company’s failed green strategy of becoming a net-zero energy company, put into place by former chief executive Bernard Looney in early 2020 has resulted in mounting pressure from investors, especially activist hedge fund Elliott Investment Management which holds more than 5 percent of BP’s shares. The company is currently exploring restructuring options, such as the sale of its global lubricants division including the Castoral brand. Further, the company’s chair, Helge Lund has also announced plans of stepping down from the company, most likely in 2026.
BP has denied to make any statement on the speculations.
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