BP’s share price saw a notable rise this week following reports that Shell is considering a potential takeover of its rival.
Early trading on Tuesday saw BP stock gain up to 2.5% after speculation emerged that Shell has been in discussions with advisers about whether to pursue an acquisition, reportedly weighing the possibility against BP’s sliding market value.
The reports come at a turbulent time for BP, which has seen its share price fall by roughly a third over the past year. The decline follows a shift in strategy, with the company pulling back from renewables investment after investor pressure and pivoting back toward oil and gas production. Despite these changes, the company’s financial performance has not fully recovered.
Shell, significantly larger with a market capitalisation of around £146.7 billion compared to BP’s £56.5 billion, has not confirmed any formal approach. A Shell spokesperson reiterated the company’s focus on “performance, discipline and simplification” rather than commenting directly on any potential merger activity.
Any takeover would be one of the most significant in the history of the oil sector and would bring together two of the UK’s energy giants, ending years of speculation over such a deal.
Investor sentiment has been further influenced by the involvement of activist shareholder Elliott Management, which earlier this year acquired a near-5% stake in BP. The hedge fund is understood to be pushing for a sharper focus on fossil fuels to boost profits.
Shell’s share price was down slightly by 1.35% on Tuesday morning, while BP’s upward move suggests the market is watching closely for further developments.
