How a Shell–BP deal would compare to energy sector’s past M&A

00:00 Speaker A

Shell is in early talks to acquire rival BP according to a Wall Street Journal report. People familiar with the matter say talks between company representatives are active, and that BP is considering the approach carefully, but Shell is dismissing the report, telling the Journal it’s quote further market speculation and no talks are taking place. A possible combination of the energy companies could end up as the biggest oil deal since Exxon and Mobil’s $80 billion plus merger more than 25 years ago. And you can see on this chart some of the biggest deals in history in the energy space. Exxon and Mobil back in 1998, Shell’s acquisition of BG group in 2015 and more recently, Exxon Mobil acquiring Pioneer, plus Occidental’s deal with Anadarko Petroleum. Now, one of the other things to keep in mind is what the outlook has been. Even though we saw in November, once investors were trying to wrap their minds around what the election results meant, and if there would be more of a mindset for deal making, we haven’t seen that fully play out just yet. And even coming into the first and second quarter of this year, we got some commentary from EY Parthenon, and in their expectations, they are looking for a slight rise in total US deal volume in 2025 for deals over $100 million. So when we’re talking tens of billions of dollars worth of deals, you can bet that the tires are going to get ticked and kicked just a little bit harder.