BP (BP) shares jumped as much as 8% on Wednesday following a Wall Street Journal report that the British oil giant is in early-stage takeover talks with European rival Shell (SHEL).
The potential deal, valued at around $80 billion, would represent a blockbuster merger between two of the world’s largest energy companies.
“This is further market speculation,” a Shell spokesperson told Investing.com. “No talks are taking place.”
The rumored deal, if true, would be monumental. With BP’s current market value around $80 billion, a potential acquisition—including a standard premium—could eclipse the $83 billion megamerger that created Exxon Mobil (NYSE:XOM) at the turn of the century. But Shell’s latest comments suggest nothing is in motion.
“As we have said many times before, we are sharply focused on capturing the value in Shell through continuing to focus on performance, discipline and simplification,” the spokesperson added.
Those remarks echo statements made by Shell’s CEO and CFO during the company’s first-quarter earnings call, where they made clear that Shell prefers share repurchases over major acquisitions.
“I have said in the past that we want to be value hunters. Today, value hunting – in my view – is buying back more Shell,”
— Shell CEO Wael Sawan
BP declined to comment on the WSJ report.
While BP stock gave up some of its early gains, it still ended the session higher. Shell shares, meanwhile, dipped 0.8% on the NYSE but recovered somewhat from intraday lows.
BP shares trimmed earlier gains but were still up 1% after a Shell spokesperson reiterated the company’s strategy: “As we have said many times before, we are sharply focused on capturing the value in Shell through continuing to focus on performance, discipline and simplification.” BP declined to comment on the report.
Earlier this year, BP announced plans to ramp up oil and gas investments and pursue divestments to strengthen its balance sheet, marking a shift back toward its core fossil fuel operations while dialing back spending on renewables.
The move comes amid mounting pressure from activist investors over the past year, urging the company to prioritize profitability over climate-related initiatives.
Update: Shell quickly moved to quash the speculation. Shell said no talks are taking place to acquire rival BP following earlier reports from the Wall Street Journal that the two oil giants were contemplating a merger.
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