WASHINGTON (dpa-AFX) - Shell on Wednesday denied reports suggesting it was in early-stage discussions to acquire rival BP, calling the claims 'market speculation.'
The response came after a Wall Street Journal article, citing unnamed sources, said Shell had explored a potential takeover of BP sending BP shares soaring over 10 percent to a session high of $32.94 before retreating to a gain of about 2 percent.
A Shell spokesperson firmly rejected the report, stating, 'No talks are taking place. As we've said repeatedly, we remain sharply focused on unlocking value at Shell through continued emphasis on performance, discipline, and simplification.'
BP, currently valued at approximately $80 billion, would represent one of the oil industry's largest deals in decades if a full acquisition were pursued surpassing Exxon's $83 billion purchase of Mobil in 1999.
However, sources told CNBC that a full-scale acquisition is unlikely. If any transaction were to occur, it would more plausibly involve a breakup of BP and the sale of individual business units to multiple buyers.
The speculation comes as BP continues to lag behind Shell and U.S. peers, struggling with strategic missteps and underwhelming financial performance.
BP's ambitious pivot toward renewables, launched five years ago, has come under scrutiny as profitability declined. Earlier this year, the company announced a strategic reset recommitting to oil and gas while scaling back investments in green energy. Industry analysts have criticized the earlier shift, calling it a costly miscalculation.
The renewed focus on core operations has been further fueled by activist investor Elliott Management, which revealed a more than 5 percent stake in BP in April. While merger speculation has stirred market volatility, Shell's dismissal appears to have calmed immediate investor concerns for now.
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