KEY POINTS
- Shell’s M&A chief Greg Gut resigned after senior executives blocked an internal proposal to acquire BP.
- CEO Wael Sawan and CFO Sinead Gorman opposed the deal, citing risks to strategy and execution.
- Shell ruled out a BP bid in June under UK takeover rules and has signalled little appetite to revisit it.
Shell’s long-serving mergers chief Greg Gut resigned after senior executives opposed an internal push to acquire BP, according to a report by the Financial Times, shedding new light on strategic tensions at the oil major during a year of heightened deal speculation.
Gut, who spent more than two decades at Shell and related entities, departed the company in September. His exit followed resistance from Chief Executive Wael Sawan and Chief Financial Officer Sinead Gorman to an approach that would have ranked among the largest transactions in the sector in recent years, the newspaper reported, citing people familiar with the matter.
Those executives were said to have concluded that a deal of such scale risked distracting from Shell’s strategy and capital discipline at a time when the group is under pressure to deliver returns to shareholders. While Shell chair Andrew Mackenzie was reported to have shown some interest in the proposal, the plan ultimately failed to win backing at the top of the company.
Gut did not directly address the details of the report when contacted, but confirmed that he left Shell in September. He said he had “thoroughly enjoyed” working with Sawan, Gorman and other senior leaders during his tenure.
Strategic caution trumps dealmaking ambitions
Shell publicly ruled out any interest in buying BP in June, issuing a statement that, under UK takeover rules, prevents it from making a bid for six months. At the time, the company said it was not considering an offer, effectively closing the door on any immediate approach.
Sawan has repeatedly argued that returning cash to investors through share buybacks represents a better use of capital than pursuing a large acquisition. BP’s shares have lagged those of its peers since 2020, after the company accelerated its pivot towards renewable energy, a strategy that has drawn mixed reactions from investors.
The Financial Times report suggested that Sawan’s opposition to the deal signalled a low likelihood of Shell revisiting the idea once the six-month restriction expires on December 26. That stance appears consistent with the chief executive’s emphasis on financial discipline and focus on Shell’s existing portfolio.
Shell declined to comment further on the report. “We have previously made a clear statement on this matter, and we have nothing to add to it,” a company spokesperson said.
The episode underscores the challenges facing oil majors as they weigh consolidation against shareholder demands for cash returns and operational focus. It also highlights the internal debates that can surface when companies consider transformative deals in an industry grappling with energy transition pressures and uneven market performance.
