Shell weighs BP takeover, awaits dip in oil, stock prices
What's the story
London-based Shell Plc, one of the biggest players in the oil industry, is said to be mulling a potential acquisition of another British multinational oil and gas company, BP Plc.
The company is working with advisors to determine the feasibility of the move.
However, Shell has opted to wait for further declines in stock and oil prices before making any final calls on the matter, according to Bloomberg.
Market impact
BP's declining stock price influences Shell's decision
Shell has been seriously discussing the potential benefits and feasibility of a BP acquisition with its advisors in recent weeks.
The final decision will likely depend on whether BP's stock continues to decline.
Over the past year, BP shares have lost nearly a third of their value due to an unsuccessful turnaround plan and falling oil prices.
Strategic focus
Shell's strategy amid BP acquisition talks
Shell may also wait for BP to make the first move or for another potential buyer to step in. This strategy could prepare Shell for such scenarios.
Discussions remain at an early stage, and Shell might focus on share buybacks and smaller acquisitions rather than a big merger with BP.
Company statement
Focus on performance and discipline
A Shell spokesperson stressed the company's focus on performance, discipline, and simplification in an email to Bloomberg. Meanwhile, BP declined to comment on the possible acquisition.
If successful, a merger between Shell and BP would be one of the largest-ever takeovers in the oil industry.
The two companies have been on-and-off topics of discussion for decades, owing to their similar size, reach, and global influence.
Company outlook
Shell's recent performance and future plans
Over the last year, Shell's stock has declined roughly 13% in London trading, valuing the company at £149 billion ($197 billion), more than twice BP's £56 billion market cap.
Under CEO Wael Sawan, Shell has been slashing costs and refocusing on fossil fuels.
Despite recent progress, Sawan said there's "more work to do" before looking at sizable acquisitions.