Background of the Acquisition Rumors
On June 25, 2025, the Wall Street Journal reported that Shell was in initial talks regarding an acquisition of BP. This merger could become the largest M&A deal of the year and, with a premium on BP’s value, represent the biggest acquisition in the oil industry since the ExxonMobil deal in 1999. The strategic logic behind such an acquisition lies in the fact that Shell has risen as a leading oil company in recent years, while BP has lost ground due to internal issues and failed diversification in the renewable energy sector. A merger would allow Shell to further strengthen its position and create a European energy giant capable of competing globally with ExxonMobil or Saudi Aramco.
Market Reactions
After the rumors broke, BP’s stock initially rose by up to 10 percent but later gave back most of those gains; it is currently still slightly up. In contrast, Shell’s stock experienced a slight decline of about 0.8 percent. This demonstrates the market’s high sensitivity to such speculation.
Official Statements
Shell quickly dismissed these reports as “market speculation” and actively denied ongoing acquisition talks with BP. A spokesperson emphasized multiple times that they are “not in active acquisition discussions.” Nevertheless, experts do not rule out the possibility of informal preliminary talks or explorations – such discussions are often confidential and are made public only much later.
Challenges of a Potential Deal
A merger between Shell and BP would be a mega-deal within a transforming industry. Following recent major transactions like Exxon’s acquisition of Pioneer Natural Resources and the ongoing proceedings between Chevron and Hess, this would already mark the third major deal in a short time. Additionally, regulatory hurdles would increase: a merger of two large oil companies could raise antitrust concerns and would have to pass extensive scrutiny.
Geopolitical factors may also play a role: Since BP is heavily involved in Iraq – a country indirectly affected by the conflict between Iran and Israel – current developments could make an approach more attractive.