Background of the takeover rumors
On June 25, 2025, the Wall Street Journal reported that Shell is in initial talks about acquiring BP. This merger could become the largest M&A deal of the year and, with a premium on BP’s value, represent the largest acquisition in the oil industry since the Exxon-Mobil deal in 1999. The strategic logic behind such an acquisition is that Shell has risen as a leading oil company in recent years, while BP has lost ground due to internal problems and a failed diversification in renewable energy. A merger would enable Shell to further strengthen its position and create a European energy giant that could compete globally with ExxonMobil or Saudi-Aramco.
Market reactions
After the rumors became known, BP’s stock initially rose by up to 10 percent but later gave back most of those gains; currently, it is still slightly in the plus. The Shell stock, on the other hand, saw 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 several times that the company is “not in active takeover talks.” Nevertheless, experts do not rule out the possibility that there may be informal preliminary talks or explorations – such discussions are often confidential and only made public late.
Challenges of a possible deal
A merger between Shell and BP would be a mega-deal within an industry in upheaval. Following recent large transactions such as Exxon’s acquisition of Pioneer Natural Resources and the ongoing procedure between Chevron and Hess, this would already be the third major deal in a short period. Furthermore, regulatory hurdles would increase: A merger of two large oil companies could raise antitrust concerns and would need to undergo extensive reviews.
Geopolitical factors could also play a role: As 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.