Shell evaluates potential BP takeover 

Shell is exploring a potential acquisition of rival BP, according to Bloomberg citing people familiar with the matter on Saturday, though the oil major is waiting for further declines in BP’s share price and oil markets before making a move.

Discussions on the feasibility and benefits of a takeover have intensified in recent weeks, sources said, but Shell may still opt to prioritise share buybacks and smaller deals instead of pursuing a megamerger.

Shell’s market capitalisation, now nearly double BP’s at £149 billion, gives it a stronger position, but a deal would face regulatory hurdles. CEO Wael Sawan recently told The Financial Times that he favours increasing Shell’s buyback programme. The company this week launched a $3.5 billion share repurchase after reporting better-than-expected first-quarter earnings.

BP, under pressure from activist investor Elliott Investment Management, is pushing ahead with $20 billion in asset sales and spending cuts through 2027 to boost returns. Elliott has raised its stake in BP to just over 5 per cent, amid leadership changes and investor discontent.

Both companies declined to comment on the potential deal.

Attribution: Reuters

Subediting: Y.Yasser