'Biggest deal of a generation': Shell in talks to buy BP - WSJ

British oil and gas company Shell is in preliminary talks about a possible acquisition of its direct competitor - BP, sources told The Wall Street Journal. At the same time, a representative of Shell in a statement to CNBC rejected this information and called it «market speculation». If the deal goes through, it would be the largest merger of oil supergiants in a generation, the WSJ noted.

Shell is in early talks about a possible purchase of BP, sources told The Wall Street Journal. BP's management is scrutinizing the offer, they said. However, the discussion is progressing slowly, one of the newspaper's interlocutors said. The terms of a possible deal have not been disclosed yet, and, as the WSJ sources emphasize, reaching an agreement is not guaranteed.

BP's market capitalization currently stands at about $80 billion. If the deal goes through, its total value, including a potential premium to the current share price, could exceed $83 billion, the WSJ estimated. Such a merger would be the largest in the oil industry since the emergence of Exxon Mobil in the late 1990s, the publication noted. It would also be the largest M&A deal in 2025 - amid the volatility caused by the Donald Trump administration's trade wars and geopolitical tensions.

A comment from a Shell spokesman, which was contained in the WSJ, said the company aims to maximize its value by improving efficiency, financial discipline and simplifying its structure. The same Shell comment was cited by Bloomberg. And that's exactly what Shell said in May - when Bloomberg first reported the possibility of such a deal.

However, after the WSJ published the news, a Shell spokesman declared to CNBC that the newspaper's report was «further market speculation» and that «no negotiations are underway.» The WSJ has since corrected its story: removing Shell's original message and adding a new one.

A BP spokesman declined to comment to the WSJ.

It is unlikely that Shell will buy BP in its entirety, CNBC sources said. It is more likely that several companies will buy different parts of BP, if the deal goes through, the channel's interlocutors said.

On June 25 in New York, Shell shares fell by about 4% at the moment - to the minimum since the beginning of June, but then recovered most of the losses. BP's American Depositary Shares (ADSs), on the other hand, jumped at one point by nearly 9.5% to their highest since early April 2025, but then slowed to about 2%.

A merger between two global energy giants that play a key role in global oil and gas production would be the biggest in a generation, the WSJ writes. Bloomberg called the potential deal one of the largest in European history: it could create the first industry giant capable of challenging Exxon Mobil and Chevron, the agency added. Buying BP would help Shell strengthen its position in competition with Exxon Mobil and Chevron, as well as cut costs by scaling up and eliminating potential rivals, the WSJ agreed.

A BP takeover would require Shell to go through a lengthy integration process - with possible cultural differences and the need to get rid of overlapping assets. Nevertheless, the deal would expand Shell's global trading capabilities and strengthen its position in the liquefied natural gas market, the WSJ said. The companies have well-matched assets in the Gulf of Mexico, which creates the potential for operational synergies, the newspaper emphasized, citing analysts.

BP's results in recent years have been inferior to Shell's: the company has lost direction, prompting talk that it has become an acquisition target, noted CNBC. The «reset» of strategy that the company announced in February was coolly received, with analysts and investors questioning the company's goals of increasing oil and gas production, added Bloomberg. In April, activist fund Elliott Investment Management publicly announced a 5% stake in BP and called for the company to take more radical steps.

In May, Bloomberg sources told that Shell was discussing with advisers the feasibility of buying BP, but is in no hurry to make an offer, expecting a further decline in the value of BP shares and oil prices. Other major players in the energy sector are also considering buying BP, the agency noted at the time, without specifying who they were talking about.

Shell securities in New York have risen 11% since the beginning of 2025. They have 31 ratings from analysts, and the most popular recommendation is Buy (23 Buy and three Overweight), shows MarketWatch. Another four recommend Hold (Hold) and one recommends Sell (Underweight).

BP's 2025 securities gain only 2.6% year-to-date. They also have 31 ratings from analysts, but the majority advise holding - 19 Hold. Another ten recommend buy, two recommend sell.

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