Shell to buy Canada's ARC Resources in $16.4bn deal

(Sharecast News) - Shell said on Monday that it has agreed to buy Canada's ARC Resources in a $16.4bn cash and stock deal. Under the terms of the deal, ARC shareholders will receive CAD8.20 in cash and 0.40247 ordinary shares of Shell for each of their shares. This represents around 25% cash and 75% shares as of the close of markets on 24 April.

Shell said the acquisition accelerates its strategy by adding 370,000 barrels of oil equivalent per day immediately across liquids and gas, leading to a 4% production compound annual growth rate through to 2030, compared to 2025.

It also increases the company's exposure to long-duration, low-cost and top quartile low carbon intensity shale gas and liquids production in Canada's Montney basin, "delivering value for decades".

Shell said the deal is expected to generate double-digit returns, bolstering long-term cashflows, and is accretive to free cash flow per share from 2027 onwards.

Chief executive Wael Sawan said: "ARC is a high-quality, low-cost and top quartile low carbon intensity producer operating in the Montney shale basin that complements our existing footprint in Canada and strengthens our resource base for decades to come. We are accessing uniquely positioned assets and welcoming colleagues that bring deep expertise which, combined with Shell's strong basin level performance, provides a compelling proposition for shareholders.

"This establishes Canada as a heartland for Shell while furthering our strategy to deliver more value with less emissions."

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