BP Takeover Appears Unlikely Due to Size and Complexity

BP plc’s BP potential takeover appears highly unlikely at present, according to senior bankers at Moelis & Co., who cite the British oil major’s vast size and operational complexity as major barriers to acquisition, per a Bloomberg report.Speaking to Bloomberg, Stephen Trauber, Moelis Chairman and Global Head of Energy and Clean Technology, indicated that there is no obvious buyer for BP at present, especially not from the United States. He added that even on a global scale, few potential acquirers see BP’s assets as essential.Shell-BP Tie-Up Logical but Improbable?Shell Plc SHEL is seen as the most compatible acquirer in terms of asset synergies and regulatory feasibility, according to Trauber. However, Shell’s earlier shift toward traditional oil and gas, and its current stronger market positioning make a deal less attractive from its side.That said, Trauber acknowledged that there is a good chance of a tie-up in the future, particularly if BP’s valuation remains subdued and Shell continues to strengthen its balance sheet. In such a scenario, strategic alternatives may need to be reassessed.BP Divestment Program Faces HeadwindsBP’s $20 billion divestment plan is encountering headwinds, with its lubricants unit, Castrol, standing out as a particularly difficult asset to offload. According to Moelis, the business has a narrow pool of potential buyers, making a successful sale uncertain, even under competitive conditions.The company may also consider selling its high-quality oil assets in the United States that may attract strong interest. However, such a move could trigger broader concerns about BP’s future strategy, as highlighted by Moelis Managing Director Muhammad Laghari.No Imminent Buyer for BPFor now, the consensus among energy dealmakers is that a BP takeover remains a distant prospect. While strategic realignments and market dynamics could change the picture in the future, BP’s scale, asset mix and valuation challenges make any near-term acquisition highly improbable.BP’s Zacks Rank & Key PicksBP currently carries a Zack Rank #5 (Strong Sell).Investors interested in the energy sector may look at a couple of better-ranked stocks like Subsea 7 S.A. SUBCY and Energy Transfer LP ET. Subsea 7 presently sports a Zacks Rank #1 (Strong Buy), while Energy Transfer and RPC carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.Subsea 7 helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.The Zacks Consensus Estimate for SUBCY’s 2025 EPS is pegged at $1.31. The company has a Value Score of A.Energy Transfer is poised to benefit from long-term fee-based commitments. It is also focused on expanding operations through organic and inorganic initiatives. The firm is looking for solutions to meet growing energy demands from additional demand centers through its pipeline network. Energy Transfer’s systematic investments should boost its total fractionation capacity at Mont Belvieu and raise its top line.The Zacks Consensus Estimate for ET’s 2025 EPS is pegged at $1.44. The company has a Value Score of A. Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BP p.l.c. (BP): Free Stock Analysis Report Energy Transfer LP (ET): Free Stock Analysis Report Subsea 7 SA (SUBCY): Free Stock Analysis Report Shell PLC Unsponsored ADR (SHEL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks