Shell expands Canadian presence with $16.4 billion ARC acquisition
Shell PLC on Monday announced the $16.4 billion cash-and-shares acquisition of Canadian energy company, ARC Resources Ltd.
The London-based oil major said the deal is expected to generate double digit returns, bolstering long-term cash flows, and is accretive to free cash flow per share from 2027 onwards.
Under the deal, ARC shareholders will receive C$8.20 in cash and 0.40247 ordinary shares of Shell for each ARC share. This values ARC equity at around $13.6 billion based on Shell’s closing price on Friday. In addition, Shell will take on around $2.8 billion in net debt and leases resulting in an enterprise value for the deal of $16.4 billion.
The equity part of the acquisition will be funded via $3.4 billion in cash and $10.2 billion in Shell shares.
Shell expects to absorb additional organic cash capital expenditure within its existing cash capex, post 2026. The cash capex range for 2027 to 2028 remains unchanged at $20 billion to $22 billion. The deal is expected to bring annualised synergies of around $250 million within a year of closing. Shell said its shareholder distribution policy remains unchanged.
The FTSE 100 listing said the deal adds 370,000 barrels of oil per day immediately across liquids and gas leading to a 4% production compound annual growth rate through to 2030, compared to 2025.
It increases Shell’s exposure to ‘long-duration, low-cost and top quartile low carbon intensity shale gas and liquids production in Canada’s Montney basin,’ Shell added.
Chief Executive Officer Wael Sawan said the acquisition ‘complements our existing footprint in Canada and strengthens our resource base for decades to come’.
Shares in Shell fell 0.1% to 3,305.00 pence each in London on Monday.
Copyright 2026 Alliance News Ltd. All Rights Reserved.