Shell Considers Acquisition of BP

British oil company Shell is considering acquiring its rival BP, but is anticipating further declines in share and oil prices before deciding on a potential bid.

The energy giant has intensified discussions with its advisors in recent weeks regarding the feasibility and benefits of a takeover, indicating that any final decision would depend on how long the rival’s stock continues to decline, according to Bloomberg.

For years, BP and Shell were similar in size, but Shell has emerged in recent years to become almost twice the size of BP, with a market capitalization of around £149 billion.

Shell this week announced strong first-quarter results that exceeded earnings expectations, along with the launch of a $3.5 billion share buyback program. According to the sources, Shell may prefer to wait until BP initiates contact, or until another interested party emerges, noting that the ongoing consultations aim to prepare Shell for such a scenario. The sources added that the discussions are still in their early stages, and that the company may prefer to continue share buybacks and carry out small acquisitions rather than enter into a massive merger deal.