-- Shell (SHEL) agreed to acquire Canadian energy company ARC Resources in a cash-and-stock deal with an enterprise value of US$16.4 billion, as the oil and gas giant looks to increase its exposure to low-cost shale gas and liquids production in Canada's Montney basin.
Shareholders of ARC will receive 8.20 Canadian dollars (US$6.03) in cash and 0.40247 shares of Shell for each share owned, representing a total consideration of CA$32.80 apiece, the companies said in separate statements.
The deal has an equity value of US$13.6 billion, said Shell, which will take on US$2.8 billion in net debt and leases, bringing enterprise valuation to US$16.4 billion.
Shell's US-listed stock edged down 1.1% in Monday trade.
"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," Shell Chief Executive Wael Sawan said in a statement. "This establishes Canada as a heartland for Shell while furthering our strategy to deliver more value with less emissions."
The transaction, which requires approval from regulators and courts, as well as clearance from ARC's shareholders, is expected to complete in the second half.
Shell projects the deal to enhance its existing liquid natural gas footprint and downstream businesses in Canada. The acquisition is expected to generate annualized synergies of around US$250 million within a year of completion, according to Shell.
It expects the transaction to increase its production compound annual growth rate to 4% through 2030. The deal adds roughly 2 billion barrels of oil equivalent proved plus probable reserves at the end of 2025. ARC produced 374,000 barrels of oil equivalent per day in 2025.
Through this deal, ARC will become "part of a dynamic global energy leader capable of realizing the full potential of our business and delivering on Canada's exciting energy future," CEO Terry Anderson said in a separate statement.
ARC said it will be liable to pay a fee of about CA$600 million if it terminates the deal.
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