Shell – the energy giant based in London – officially denied any intention to acquire BP, despite information from The Wall Street Journal about initial negotiations with a deal value of nearly $80 billion.
This information shocked the energy market late on Wednesday. Within hours, Shell dismissed negotiations, committing to maintaining capital discipline. BP chose to remain silent in response to related questions.
This moment is a big challenge for BP as its stock has fallen over 6% this year due to weak performance and operational incidents. Analysts are beginning to view BP as an easy takeover target.
Meanwhile, Shell has increased by over 4% this year. Acquiring BP would help Shell expand control over oil fields and enhance its presence in key areas like the Permian Basin – but it would also come with significant challenges.
Expert insights on the value and impact of the deal
Allen Good, Equity Research Director at Morningstar, stated to CNBC that Shell would not gain clear benefits from acquiring BP. He emphasized, 'Without an attractive valuation, the deal does not help Shell improve growth, even though it provides access to the Permian field.'
Good also analyzed that the actual effectiveness of the deal depends on Shell's ability to restructure, cut costs, and divest BP's underperforming assets – which could face strong internal opposition.
He also suggested that from the perspective of BP shareholders, selling the company might be the best strategy to optimize financial benefits.
In this context, BP's leadership strives to maintain its new direction. CEO Murray Auchincloss recently restarted the plan to rebuild trust, but BP's Q1 results were still disappointing. While he asserts that the company is off to a good start, the financial data does not fully support this claim.
The market reacted with a sharp drop in BP's stock in April, influenced by global trade tensions. Afterward, the stock stabilized, but uncertainty remains, leaving speculation about Shell or other partners' takeover attempts.
Legal barriers and concerns about personnel if merged
Legally, a merger between the two leading UK oil companies would attract close scrutiny. Analysts warn of the risk of opposition due to antitrust laws, especially in Europe, coupled with the possibility of mass job cuts.
Shell and BP have different corporate cultures and operating models, so integration would pose many obstacles both financially and politically.
Russ Mould, Investment Director at AJ Bell, commented to CNBC that Shell's abandonment of the deal reflects its commitment to the current financial strategy. He analyzed, 'While there may be scale benefits in the oil and gas industry, integrating these two businesses would be extremely complex due to cultural differences and the politically sensitive risk regarding jobs.'
Shell's stock price fluctuated slightly when the news broke, decreasing a bit before rising nearly 1% after the company dismissed the rumors.
Nick Wayth – the current CEO of the Energy Institute, who worked at BP for over two decades, stated on CNBC that despite rumors, the deal is extremely complex with multiple overlapping operations and a host of stringent legal barriers. He also revealed that he still holds BP shares.
Source: https://tintucbitcoin.com/shell-khang-dinh-khong-sap-nhap-bp/
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