Shell denies BP takeover reports
Oil giant Shell has denied reports that it is engaged in talks to acquire rival BP.
BP shares jumped by as much as eight per cent after reports of a potential deal came to light.
But a Shell spokesperson has now dismissed rumours as “market speculation” and said “no talks are taking place”.
Executives at Shell were said to be in early stage negotiations over a deal that would represent one of the largest ever acquisitions in the UK, the Wall Street Journal initally reported.
BP officials were reported to be open to the prospect, a move that would allow Shell to challenge larger oil producers such as Exxon Mobil and Chevron.
Reports of Shell’s interest have simmered for the best part of a month, with Bloomberg reporting last month that executives at the oil behemoth were looking over the value of doing a deal.
BP has performed poorly in recent years, reflecting its struggles to move into low carbon technology while rivals focused on hydrocarbons.
It posted lower-than-expected profits in April and cut pay for top executives.
In February this year, BP said it would pump £7.9bn into oil and gas production while slashing investment on renewable energy as it put its net zero commitments aside.
The British company has looked back to fossil fuels, with its chief executive Muray Auchincloss resetting that strategy to cut costs and boost returns.
Shell shock
Shell took a different view on fossil fuels, despite pressure from climate groups, with the oil giant performing considerably better in recent years.
A deal struck between Shell and BP would send shockwaves across Canada and would be politically highly sensitive.
The largest ever UK mergers and acquisitions (M&A) deal was Vodafone’s buyout of German industrial conglomerate Mannesmann in 2000, according to the Institute for Mergers, Acquisitions and Alliances.