Shell ends speculation about a BP takeover, denying plans for a £60 billion oil industry merger.
Company insists no talks happened, stressing focus on performance and cleaner energy instead of acquisitions.
Shell has officially ruled out a takeover of British oil giant BP, putting an end to swirling market rumors about a possible £60 billion acquisition that would have created a £200 billion UK oil supermajor.
In a regulatory statement released on Thursday, Shell firmly denied any plans to acquire BP, stating it “has no intention of making an offer.” The company also said that no talks had taken place between the two firms. The clarification comes after a Wall Street Journal report had earlier claimed that informal discussions were underway regarding a potential merger.
Shell has now legally prohibited itself from making a formal offer for BP within the next six months unless specific requirements are fulfilled, as stated in Rule 2.8 of the UK Takeover Code. BP inviting a proposal, another company making an offer for BP, or substantial changes in circumstances are some examples of these exceptions.
Shell move to publicly reject the merger speculation follows its initial denial on Wednesday evening. The company reiterated that no negotiations were ongoing and described the media reports as “further market speculation.”
The rumors had been fueled by Shell strong recent performance and a belief that it might capitalize on BP’s declining market value. BP has lost nearly one-third of its value in the past year and is currently worth around £58 billion. According to analysts, investor skepticism regarding BP’s unsuccessful transition plan to become a net-zero energy company under CEO Murray Auchincloss is a contributing factor in this decline.
Shell CEO, Wael Sawan, has consistently signaled a preference for share buybacks over acquisitions, further distancing the company from any takeover ambitions. Shell said in its Thursday statement:
“We remain focused on delivering more value with less emissions through performance, discipline, and simplification,”
Despite its denial, Shell has left the door open to revisit a deal under certain conditions, meaning that while the current round of speculation may be over, the possibility isn’t entirely off the table.
