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Bond Market News
Shell Considering Acquisition of BP, Say Sources
May 5, 2025
Shell Plc is considering acquiring BP Plc, but it is waiting for further declines in BP’s stock and oil prices before making a final decision, according to sources. Shell has been consulting advisers on the feasibility of the takeover, though no action has been taken yet. BP’s stock has dropped nearly 30% in the past year due to underperformance and a failed turnaround plan, making it a potential target for acquisition, the sources added. However, Shell may also opt for smaller acquisitions or focus on share buybacks instead of pursuing a mega merger. Shell’s market value is significantly higher than BP’s, but both companies face challenges in the current oil market. BP has struggled with its net-zero strategy and declining oil prices, while Shell is refining its focus on fossil fuels and cost-cutting. Shell’s CEO, Wael Sawan, stated that any acquisition would need to deliver immediate value and add to free cash flow. Shell’s decision will depend on BP’s stock performance and oil price trends in the coming months. Other large energy companies are also reportedly exploring a bid for BP.
BP’s bonds traded stable with its 4.875% Perp at 95.4, yielding 5.98%.
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