London-based Shell Plc, a major oil industry player, is considering acquiring another British multinational oil and gas company, BP Plc. With the help of advisors, Shell is assessing the feasibility of this move but is waiting for stock and oil prices to decline further before making final decisions, as reported by Bloomberg.
Shell has been exploring the advantages and viability of acquiring BP with advisors. The decision may hinge on BP’s stock trajectory. Over the last year, BP shares have dropped by almost a third because of issues with their turnaround efforts and declining oil prices.
Shell might choose to wait for BP or a different buyer to act first, positioning itself strategically. Discussions are early, with a potential emphasis on share buybacks and small acquisitions over a large merger with BP.
A Shell spokesperson highlighted performance, discipline, and simplification in an email to Bloomberg, while BP chose not to comment on a potential acquisition. Should a Shell-BP merger occur, it would represent a significant consolidation in the oil sector, given the companies’ comparable scale and global presence.
In the past year, Shell’s stock fell about 13% in London, making its value £149 billion ($197 billion), over double BP’s £56 billion. CEO Wael Sawan is cutting costs and prioritizing fossil fuels. While there has been progress, Sawan believes more needs to be done before pursuing major acquisitions.
Sources News From Various Digital Platforms, Websites, Journalists, And Agencies.
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