Takeover Talk Haunts BP ... Again

$4.5 billion settlement could be last straw as civil lawsuit looms

LONDON -- BP Plc is once again the subject of takeover talk following a $4.5 billion criminal settlement related to the oil company's oil spoil in the Gulf Coast, according to a Bloomberg report.

Bob Dudley shrank BP Plc in recent months to save it, according to the report. The onetime Mississippian and current chief executive officer has sold more than $50 billion of assets to pay the costs of the worst U.S. oil spill in history in 2010. Rescued from the brink of collapse, Europe’s second-largest oil company is now seen as vulnerable to a takeover.

BP is the cheapest of the world’s five biggest non-state oil companies by market value relative to reserves, earnings and output, the report states. As a result, it may become a target, according to people familiar with the strategic thinking of the London-based company and its potential acquirers.

“You can absolutely make the case that it’s a potential takeover target,” said Julian Birkinshaw, a professor of strategy and entrepreneurship at the London Business School. “BP has been fighting wars on both the eastern and western fronts” that held back buyers, he said. BP shares fell to the lowest since July after the criminal settlement was announced.

BP is now the fourth-biggest non-state oil company by market value, having fallen behind Royal Dutch Shell Plc and Chevron Corp. since the spill. Exxon remains the world’s most valuable oil company; at $394 billion, it’s almost three times the size of BP.

Exxon is looking for ways to expand, and a merger between BP and Shell to create a European energy champion is also possible, sources told Bloomberg, asking not to be identified discussing a private matter.

Officials for Exxon and Shell declined to comment.

Click here to read the complete Bloomberg report.

And see "Related Content" below to read previous reports about BP possibly being purchased.