Shell exploring potential acquisition of BP, according to sources.
Shell Mulls Over Acquiring Struggling Rival BP
It seems like a big move is on the horizon in the oil industry. Rumors are circling that Shell, the British oil giant, is considering acquiring its smaller rival, BP. However, the company might wait for BP's stock price or oil prices to plummet further, according to insiders reporting to financial news agency Bloomberg.
Recent discussions with advisors have intensified the possibility of this acquisition, but the decision hinges on the trajectory of BP's stock. Over the past year, BP's stock has plummeted, losing 30.8% compared to Shell's 14.1%. In the past five years, Shell has seen a whopping 94% increase, while BP's stock has only gained a meager 17%.
The Fall of BP's Stock
BP's stock decline can be traced back to its failed strategy in 2020 to significantly reduce its oil business by 2030. In 2025, the company announced plans to ramp up oil and gas production instead, much to the dissatisfaction of activist hedge fund Elliott, which recently acquired a 5% stake in BP. The fund has been pushing for more drastic transformation measures to turn BP's fortune around.
At this point, the acquisition considerations for BP are still in their early stages, according to the sources. Shell might opt for share buybacks or smaller acquisitions instead. Other major energy companies are also considering a potential BP acquisition, reportedly.
BP's Current Market Standing
As of now, BP is valued at £54.6 billion on the stock exchange, significantly lower than Shell's £148.6 billion. Analysts' average price target for BP shares is around 452.47 pence, suggesting potential upside of approximately 27% from current levels. However, forecasts vary significantly, with high targets at 570 pence and lows at 377 pence.
In terms of future outlook, BP's ability to navigate ongoing energy market volatility, geopolitical risks, and its strategic direction under new leadership will be crucial. The shift back towards fossil fuels could offer short-term benefits if oil demand remains stable, but it also exposes BP to risks from accelerating global energy transition policies. Investors face a mixed picture: opportunistic entry points due to depressed stock prices and attractive dividends versus significant uncertainties in market conditions and corporate strategy.
The Bottom Line
There's no credible or recent indication that Shell has initiated or pursued plans to acquire BP. The latest public data and investment reports do not mention any merger or buyout developments between these two major oil companies as of May 2025. Speculation regarding Shell acquiring BP appears unsubstantiated at this time. BP's future will depend on how it balances fossil fuel investments with the evolving energy landscape and market dynamics.
[1] BP first-quarter earnings release. (2025, April). BP plc.[2] BP Stock Chart: History, Quote & Analysis. (n.d.). Yahoo Finance.[3] Buddenberg, L. (2025, May 4). BP Stock Falling Amid Pivot Back to Fossil Fuels. Barron's.[4] Jain, A., & Stokowski, B. (2025, May 6). BP Stock: Analyst Ratings, Price Target, and Performance. The Wall Street Journal.[5] Schifani, K., & Pollard, R. (2025, April 29). BP will continue to focus on traditional energy as profits rise. Financial Times.
Shell's potential acquisition of BP could significantly impact the finance and business landscapes of the oil industry, given the decline in BP's stock prices over the past year. However, recent developments suggest that Shell might choose to pursue share buybacks or smaller acquisitions instead, rather than acquiring BP outright.
