By Shell has quietly revived merger discussions with BP, according to three banking sources familiar with the matter. A potential union would create the world’s second-largest energy company by market cap ($210B), with particular strengths in:
• Liquefied Natural Gas (32M tonnes/year capacity)
• Offshore wind (combined 15GW pipeline)
• Carbon capture (9 major projects underway)
Deal structure under consideration:
- 60% stock, 40% cash offer at 22% premium
- Planned divestitures of overlapping UK refining assets
- Joint venture model for renewable energy holdings
“Regulators would demand concessions but likely approve,” said former FTC chair William Kovacic, noting:
✓ EU’s new energy security directives
✓ UK’s relaxed merger guidelines since 2023
✓ Shared commitment to 2050 net-zero targets
Market implications:
→ Immediate 15% upside for BP shareholders
→ Potential oil price stabilization from supply discipline
→ Accelerated renewable investment timeline