BP and Shell could be takeover targets if Exxon and Chevron snatch opportunity

BP PLC and Shell PLC may find themselves at the negotiating table as American peers Exxon Mobil Corporation or Chevron Corporation could come calling, that’s the view of analysts at Citigroup.

A megamerger between either London-listed oil major and either of America’s largest oilers appears increasingly attractive, on valuation terms at least, according to the Wall Street bank.

There’s a wide value gap between the transatlantic peers with the European oil and gas sector nowadays enduring softer investor sentiment, distracted by different attitudes to ESG and energy transition than seen stateside, all of which leaves an apparently widening value gap.

A megamerger would, in theory, help European valuations cinch the gap in a way that Citi doesn’t think will otherwise happen organically.