Shell and BP merger chatter: Rumour mill or real moves?

Shell has denied engaging in negotiations to acquire rival energy giant BP, quashing months of speculation over a potential deal that would unite the UK’s two largest oil companies.

“There are no talks taking place,” a Shell spokesperson told the Financial Times (FT), reaffirming that the company remains committed to enhancing its own performance rather than pursuing growth through large-scale acquisitions.

Shell’s Chief Executive Wael Sawan had already addressed the matter in May during an interview with the FT, where he emphasised that he would rather allocate capital toward share buybacks than fund a potential acquisition of BP. Sawan has prioritised strengthening Shell’s financial position over the past two years and is focused on simplifying the company’s complex global operations.

The rumours gained traction on June 25 after The Wall Street Journal reported that Shell and BP were in active discussions regarding a possible merger, citing unnamed sources.

The report sparked an initial surge in BP’s New York-listed American Depositary Receipts (ADRs), which climbed by more than 10 per cent before retreating to a 3.4 per cent gain. Following Shell’s official denial, BP’s ADRs closed the day up 1.7 per cent.

According to insiders at both companies, the integration of Shell and BP — two organisations with significantly different corporate cultures — would take years and could potentially result in tens of thousands of job losses. Such a scenario could pose a significant political challenge for the UK government, especially amid economic and employment concerns.

A merger between Shell and BP would create an oil and gas supermajor valued at more than £200 billion, placing the new entity in the same league as American energy giants like ExxonMobil and Chevron.

By Tamilla Hasanova