Shell has denied recent reports in the Wall Street Journal suggesting that the oil giant is in preliminary talks to acquire its British rival, bp, reported Reuters.
A Shell spokesperson stated: “No talks are taking place. As we have said many times before, we are sharply focused on capturing the value in Shell through continuing to focus on performance, discipline and simplification.”
The denial follows a series of similar statements from the company, reinforcing its commitment to internal growth and share buybacks over large-scale acquisitions.
BP, with a market valuation of nearly $80bn (£58.2bn) and net debt of $27bn, has frequently been the subject of takeover speculation due to the relative underperformance of its stock.
However, the company’s true value may not align with its current market price, the report stated.
Shell’s CEO, Wael Sawan, has consistently maintained that the company sets a very high bar for significant acquisitions, suggesting that repurchasing shares is a more strategic use of funds than a potential purchase of bp.
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By GlobalDataThis stance comes amidst industry buzz around the possibility of such a deal, which would be unusual given the current regulatory environment’s heightened scrutiny of large mergers.
The energy sector has not seen a transaction of this scale since Exxon and Chevron discussed a historic merger during the Covid-19 pandemic.
Although the terms of any potential Shell-BP deal remain unknown, with no certainty of an agreement, CNBC has reported from unnamed sources that bp could face a break-up if a transaction were to occur.
Earlier this month, Shell announced plans to expand its capacity by up to 12 million tonnes by the end of the decade, citing its Integrated Gas president Cederic Cremers.
