Oil and gas major Shell Plc (SHEL,SHEL.L) Monday announced that it has entered into a definitive agreement to acquire Canadian energy company ARC Resources Ltd. (AETUF,ARX.TO) in cash and stock deal with equity value of around $13.6 billion.
Under the deal terms, ARC shareholders will receive C$8.20 in cash and 0.40247 ordinary shares of Shell for each ARC share, representing approximately 25 percent cash and 75 percent shares as of April 24 market closing. The total consideration would be C$32.80 per share, which represents a 20 percent premium to ARC's 30-day VWAP.
Shell will take on approximately $2.8 billion in net debt and leases, resulting in an enterprise value of around $16.4 billion.
The equity value of $13.6 billion will be funded through $3.4 billion in cash and $10.2 billion in Shell shares.
The boards of both companies have unanimously supported the deal, which is expected to close in the second half of 2026, subject to ARC shareholder, court and regulatory approvals.
Shell expects the acquisition to generate double digit returns, bolstering long-term cashflows, and is accretive to free cash flow per share from 2027 onwards.
ARC is focused on the Montney shale basin in British Columbia and Alberta, Canada. Last year, ARC reported production of 374 thousand barrels of oil equivalent per day.
Shell said the acquisition increases its production CAGR to 4 percent from 1 percent as outlined at 2025 Capital Markets Day, compared to 2025.
The transaction is expected to bring annualised synergies of around $250 million within a year of closing.
In pre-market activity, the shares were trading at $89.22, up 0.12 percent.
In London, Shell shares were trading at 3,305.50 pence, down 0.06 percent.
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