Shell to acquire ARC Resources for C$32.80 per share

Shell (SHEL) has entered into a definitive agreement to acquire ARC Resources (AETUF). This acquisition increases Shell’s production CAGR from 1% as outlined at its 2025 capital market’s day to 4, compared to 2025. The transaction combines ARC’s more than 1.5M net acres with Shell’s 440,000 net acres in the Montney formation and adds 2B barrels of oil equivalent proved plus probable reserves at the end of 2025. Under the terms of the agreement, ARC’s shareholders will receive C$8.20 in cash and 0.40247 ordinary shares of Shell for each ARC share, representing approximately 25% cash and 75% shares as of April 24 market closing. Based on Shell’s closing share price on this date of GBP 33.08 and GBP-CAD exchange ratio of 1.8480, this translates to a consideration of C$32.80 per share, which represents a 20% premium to ARC’s 30-day VWAP. This equates to an equity value of approximately $13.6M. Shell will take on approximately $2.8B in net debt and leases resulting in an enterprise value of approximately $16.4B. The equity value of $13.6B will be funded via $3.4B in cash and $10.2B in Shell shares, the latter valued based on Shell’s closing price on the 24th of April and the issuance of approximately 228M ordinary shares.