Shell $SHEL has agreed to acquire Canadian oil and gas producer ARC Resources in a transaction valued at $22 billion Canadian dollars, or about $16.4 billion U.S., including assumed net debt, the companies announced April 27.

Under the terms of the deal, ARC shareholders will receive C$8.20 in cash and 0.40247 of a Shell share for each ARC share — a total of C$32.80 per share. That represents a 27% premium to ARC's closing price on the Toronto Stock Exchange on April 24. The consideration is structured 75% in Shell shares and 25% in cash.

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Production of roughly 370,000 barrels of oil equivalent per day and reserves totaling 2 billion barrels come with the acquisition, Reuters reported, with Shell projecting double-digit returns and higher free cash flow per share beginning in 2027.

ARC is a pure-play producer in Canada's Montney basin, one of the country's largest shale gas and liquids formations. Shell said the acquisition strengthens its integrated gas business and creates a platform for growth in Canada, with potential to accelerate value through its global liquefied natural gas infrastructure.

ARC's board unanimously approved the transaction and recommended shareholders vote in favor. A special meeting to approve the deal is expected in July 2026, requiring approval from at least two-thirds of votes cast. The transaction is also subject to regulatory approvals under Canadian and U.S. competition and investment laws, and is expected to close in the second half of 2026.

"ARC is a high-quality, low-cost and top-quartile low carbon intensity producer that complements our existing footprint in Canada and strengthens our resource base for decades to come," Shell CEO Wael Sawan said in a statement. "We look forward to welcoming our new colleagues into the organization and together, furthering our strategy of delivering more value with less emissions."

ARC CEO Terry Anderson said in a statement that the transaction would allow ARC to "realize this tremendous value and become part of a dynamic global energy leader capable of realizing the full potential of our business."

If the arrangement agreement is terminated under certain circumstances, ARC would owe Shell a $600 million Canadian dollar termination fee. RBC Capital Markets is acting as exclusive financial advisor to ARC and has provided a fairness opinion on the transaction. Shell Canada Limited, a wholly owned Shell subsidiary, is the acquiring entity.

ARC is expected to continue paying its regular quarterly dividend of C$0.21 per share until the deal closes, with the next payment anticipated July 15, 2026.

Shell is buying Canadian oil and gas producer ARC Resources in a $16.4 billion deal

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