Shell mentioned “no talks are going down” for a possible mega-merger with rival BP that might price greater than $80 billion and characterize the largest power deal of the century.
The denial comes on the heels of The Wall Road Journal reporting June 25 that Shell is in early talks to amass BP in a much-rumored deal. BP has struggled financially in recent times—coping with investor activism from Elliott Funding Administration and others—launching a “onerous reset” in early 2025 that cuts prices, shifts away from renewables, and doubles down on fossil fuels.
Shell and BP (ranked 13 and 25 on the Fortune International 500, respectively) have probably the most pure crossover with their London headquarters and international footprints, and a mixture, though costly, may place Shell to raised compete with U.S. giants Exxon Mobil and Chevron.
With its inventory down 17% up to now 12 months—and 25% in a decade—BP’s $82 billion market cap not solely trails Exxon ($470 billion), Chevron ($250 billion), and Shell ($211 billion), but additionally France’s TotalEnergies ($140 billion), and Houston-based ConocoPhillips ($113 billion), bringing BP’s long-term viability into query.
“That is additional market hypothesis. No talks are going down,” a Shell spokesperson mentioned June 25. “As we’ve mentioned many occasions earlier than, we’re sharply targeted on capturing the worth in Shell via persevering with to concentrate on efficiency, self-discipline and simplification.”
In Could, when requested about BP, Shell CEO Wael Sawan mentioned the bar is ready very excessive for any acquisitions, and that he was targeted on utilizing capital to spice up share buybacks. Shell is present process its personal extra modest revamp reemphasizing oil and fuel.
BP declined remark June 25, however BP CEO Murray Auchincloss addressed a possible Shell deal in a current sit-down interview with Fortune.
“I can’t actually say something aside from we’re targeted on our personal enterprise, our technique and driving it ahead. Clearly, the media likes to invest about this. Funding bankers like to invest about this,” Auchincloss mentioned. “However we’re simply targeted on our personal enterprise proper now. We’re joyful to have launched the [reset] technique, and we’re going to drive ahead and develop money stream, and that’ll make us sturdy and impartial.”
Huge BP strikes
The present file for oil and fuel offers is the 1999 merger of Exxon and Mobil for greater than $80 billion. A yr prior, BP’s practically $50 billion acquisition of Amoco set a short-lived file.
However BP has handled important struggles since, together with the 2010 Deepwater Horizon tragedy within the Gulf of Mexico and, most not too long ago, the 2020 technique shift to quickly develop renewables and reduce oil and fuel manufacturing 40% by 2030 as a wager that international oil demand was peaking.
Auchincloss, who took over in late 2023 after serving as CFO, has dramatically modified the technique going ahead, doubling down on oil and fuel investments from the USA to the United Arab Emirates—each of which see crossover with Shell, together with current partnerships within the U.S. Gulf.
“We simply chased an excessive amount of. We should always have narrowed that,” Auchincloss mentioned. “That’s clearly what I’ve accomplished now. I feel the very last thing I’d say is follow what you’re good at and proceed to develop that as you construct new companies.”
BP is promoting its U.S. onshore wind portfolio, divesting a 50% stake in its Lightsource photo voltaic enterprise, and promoting a lot of its international offshore wind enterprise via a brand new, fifty-fifty three way partnership with Japanese utility JERA. BP additionally offered a $1 billion stake within the TANAP fuel pipeline from the Caspian Sea to Apollo International Administration. A strategic evaluate of its Castrol lubricants enterprise is up subsequent, in addition to placing its retail fueling enterprise in Austria up on the market.
And BP chairman Helge Lund, who strongly supported BP’s push into power transition companies, will step down, almost definitely in 2026, in accordance with the corporate.
Exxon and Chevron are nearly the one different gamers giant sufficient to purchase BP. Whereas their belongings could not match as neatly, both U.S. large may dump the elements it doesn’t need to maintain.
Shell, in the meantime, has thought-about dump a few of its chemical compounds enterprise to shore up capital, which options key belongings in Texas, Louisiana, Germany, the U.Ok., and the Netherlands.
