By Ayomide Otitoju
Shell Plc is reportedly exploring a potential acquisition of rival BP Plc, according to Bloomberg News, as the energy giant evaluates strategic opportunities amid weakening oil and equity markets.
Citing people familiar with the matter, the report said Shell has been working closely with advisers in recent weeks to assess the feasibility of a takeover. However, a final decision is yet to be made and will depend largely on further declines in BP’s share price.
Once comparable in scale, Shell has now grown to nearly double BP’s market value, with a capitalization of approximately £149 billion. Analysts suggest a successful bid could position Shell to better compete with U.S. oil giants ExxonMobil and Chevron, though such a merger would likely face intense regulatory scrutiny due to its potential impact on global energy markets.
When asked about a possible acquisition, Shell Chief Executive Wael Sawan downplayed speculation, telling the Financial Times he would prefer to expand Shell’s share buyback programme. The comments were later confirmed by a Shell spokesperson.
Despite Shell posting strong first-quarter earnings and launching a $3.5 billion share repurchase last week, Sawan said the company still had “more work to do” to strengthen internal operations before pursuing major acquisitions.
While Shell may not act immediately, sources say the company is preparing for a range of scenarios, including the possibility that BP reaches out first or that a third party enters the frame.
