Reports of a potential Shell takeover of BP caused brief turmoil on global markets this week, before both companies moved to deny the speculation.
On Wednesday, The Wall Street Journal reported that Shell and BP were in the early stages of talks regarding a possible acquisition of BP. The news sent BP shares soaring by 11% in New York trading, while Shell’s shares dropped nearly 5%.
Later in the session, Shell dismissed the market reaction as “speculative”, and both stocks eventually closed near Tuesday’s levels.
On Thursday morning, Shell issued a formal statement denying any active consideration of a BP acquisition. “In response to recent media reports, Shell has not considered making an offer for BP, has not approached BP, and no discussions have taken place,” the company said.
Despite the denial, the Shell-BP takeover rumours continue to fuel debate in the financial press, particularly given BP’s underperformance in recent years.
Market analysts note that BP’s share price has significantly lagged behind competitors. In 2024, BP’s stock has risen just 2.5%, and is down 15% year-on-year. Over a five-year period, the company has seen only a 34% gain, and has lost 23% of its value since the start of 2020.
In contrast, Shell is up 105% over five years and 15% since January 2020. Chevron and ExxonMobil also show stronger performances, with Exxon gaining 151% over five years.
BP’s decline is widely attributed to a strategic shift under former CEO Bernard Looney, who pivoted toward renewables. While visionary, the move came at a time when traditional energy stocks were rebounding post-pandemic.
Though no talks are currently underway, analysts suggest that acquisition interest in BP may still emerge, given the company’s weaker valuation relative to its peers.
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