Shell (SHEL.US) acquires Canadian ARC Resources for $13.6 billion, marking the biggest deal since 2015.

Shell (SHEL.US) has agreed to acquire Canadian producer ARC Resources Ltd. for $13.6 billion, marking its largest deal in more than a decade aimed at strengthening oil and gas reserves. According to a statement released on Monday, ARC has high-quality, low-cost base resources that complement Shell's existing business in Canada, including its majority-owned Canadian West Coast liquefied natural gas plant. The oil giant is refocusing on its core oil and gas business to improve returns for investors. Shell has faced external scrutiny over whether its existing reserves are sufficient to support production over the next decade. Shell CEO Wael Sawan stated in the announcement, "This transaction will make Canada a core heartland for Shell, while further advancing our strategy to 'create more value with fewer emissions.' Acquiring ARC will provide strong support for our resource base for the decades to come." According to market data compiled, this acquisition will be Shell's largest deal since acquiring BG Group in 2015. The deal consideration will be paid with around 25% in cash and 75% in stock, at a premium of 20% over ARC's 30-day weighted average stock price. Following the announcement, Shell's stock price narrowed its earlier decline in afternoon trading in London. As of the time of writing, US stocks were down 0.28%. The statement mentioned that this transaction supports Shell's goal to sustain a daily liquid hydrocarbon production of around 1.4 million barrels by 2030 and beyond. It will also support the production of Shell's 40% stake in the LNG Canada facility. The statement also noted that ARC's operating areas are in the same region as Shell's Groundbirch assets in British Columbia (which supply gas to LNG Canada) and the adjacent Gold Creek project in Alberta. Shell's acquisition of ARC marks a strategic shift in its North American business. Shell previously sold the majority of its interests in the Canadian oilsands sector to Canadian Natural Resources Limited in 2017 and its shale assets in the Permian Basin to ConocoPhillips in 2021. The boards of both companies unanimously support the transaction. The deal is expected to be completed in the second half of 2026, subject to approval from shareholders, courts, and regulatory agencies.