Biggest deal in 10 years: Shell will spend $16 billion to buy a Canadian company

British-Dutch oil and gas giant Shell has agreed to buy Canadian oil and gas producer ARC Resources in a deal worth 22 billion Canadian dollars (about $16.4 billion), including net debt, the companies said. It will be Shell's largest acquisition since it bought gas producer BG Group in 2016, Reuters noted.

Under the terms of the deal, ARC shareholders will receive C$8.2 in cash ($6) and 0.4 Shell shares for each of their shares, which together equals about $24, the release said. That implies a 27% premium to the Canadian company's closing price in Toronto trading on April 24. The amount will be paid 75% in Shell shares and 25% in cash.

The British company added that it will assume about $2.8 billion of ARC's net debt and lease obligations, bringing the total purchase price to about $16.4 billion.

The transaction is expected to close in the second half of 2026, subject to shareholder and regulatory approvals in Canada and the United States.

Shares of Shell at the auction in London on April 27 fell by 1.5%. Shares of ARC Resources added more than 20% at the auction in Toronto.

As a result of the deal, Shell will receive assets with production of about 370,000 barrels of oil equivalent per day and reserves at the level of 2 billion barrels, Reuters reports. By comparison, the British-Dutch company itself was producing 2.8 million barrels of oil equivalent per day at the end of 2025, the agency points out. It expects that as a result, its target for the average annual production growth rate over the next decade will increase from 1% to 4% over the 2025 level.

ARC Resources' production is located near the oil giant's fields in Canada, which supply gas to the LNG Canada plant, where Shell has a 40 percent stake. The LNG produced there can be delivered more quickly to Asian buyers than most other projects in North America, Reuters explains.

Shell says the acquisition will deliver double-digit earnings and free cash flow per share growth starting in 2027. The deal will save approximately $250 million in the year after closing, while not affecting the company's $20-22 billion investment budget through 2028, the release said.

Shell's reserve life - a measure of how many years of proven reserves will last at current production levels - was less than eight years as of 2025. This is the lowest level since 2021, Reuters notes.

This article was AI-translated and verified by a human editor