Shares of British energy giant BP plc rose sharply on Wednesday following reports of a potential acquisition interest from rival oil major Shell plc.
The news has sparked investor optimism and renewed scrutiny of BP’s strategic position in the global energy market.
The stock closed at $30.31, up approximately 1.6% from the previous day, after an intraday high of $32.85.
This uptick came after The Wall Street Journal reported that Shell was in the early stages of exploring a potential deal to acquire BP—although Shell has since publicly denied the existence of such discussions.
“We routinely review potential opportunities in the market, but we are not engaged in any active talks with BP,” a Shell spokesperson said in a statement, characterizing the reports as speculative.
Despite Shell’s denial, market analysts believe the rumors are credible enough to have moved the stock, especially given BP’s recent underperformance relative to other supermajors and the heightened activism surrounding the company.
Activist Pressure and Underperformance
The speculation follows news earlier this year that Elliott Investment Management, one of the world’s most influential activist investors, had built a stake in BP.
The hedge fund is reportedly pushing for strategic changes to improve returns, including the possibility of asset sales, leadership restructuring, and increased shareholder payouts.
BP has lagged behind peers such as ExxonMobil, Chevron, and Shell in terms of share price recovery since the COVID-19 pandemic.
The company has also faced criticism over its strategy to transition toward renewable energy, which some investors say has come at the expense of short-term profitability.
A Strategic Fit?
If a deal were to materialize, analysts say it would represent one of the largest consolidations in the energy sector in years.
BP’s robust upstream portfolio, including key assets in the Gulf of Mexico, could complement Shell’s existing operations and strengthen its position in North America and beyond.
“BP remains a valuable asset with an attractive reserve base and cash-generating projects,” said Laura Jackson, an oil and gas analyst at London-based EnergyWave Partners.
“If Shell were to make a move, it would likely focus on synergies in LNG, deepwater, and decarbonization technologies.”
However, a merger between two of the UK’s largest oil companies would likely face intense regulatory scrutiny, particularly from competition authorities in the EU, UK, and the U.S.
Investor Sentiment
Wednesday’s trading activity indicates that investors are taking the speculation seriously, even in the absence of confirmation.
The rise in BP’s stock reflects a broader appetite for consolidation in the energy sector, where many companies are seeking scale to weather commodity price volatility and fund capital-intensive energy transition strategies.
The overall market reaction suggests that shareholders are hopeful that increased pressure—whether through activism or potential M&A—will lead to a revaluation of BP’s assets.
For now, both companies have declined to comment further, and there is no official indication that a formal offer is being prepared. Still, the reports have brought new attention to BP’s standing in the energy industry and the strategic decisions that lie ahead.
Whether the market enthusiasm is short-lived or a sign of deeper shifts in the oil and gas landscape remains to be seen.
Either way, BP has found itself once again at the center of the industry’s most pressing conversations.
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