Shell plc has signed a $22-billion deal to acquire ARC Resources Ltd., bringing together the lead partner in Canada’s first operating liquefied natural gas project with a major producer in one of the continent’s most profitable shale regions.
The purchase price of $32.80 per share, payable 75 per cent in ordinary Shell shares and 25 per cent in cash, represents a 27 per cent premium to ARC’s closing price on the Toronto Stock Exchange on April 24, 2026. Under the terms of the deal, ARC shareholders will receive 0.40247 of a Shell share and CAD $8.20 in cash for each ARC share held.
Why Shell Is Buying ARC
The acquisition is a strategic move by Shell to deepen its presence in Canada’s Montney shale basin, one of North America’s largest and most productive natural gas plays, and to bolster its integrated LNG value chain. ARC, which has operated for 30 years, is considered a low-cost, top-quartile producer with a strong track record in responsible development.
Shell CEO Wael Sawan said the deal aligned with the company’s broader strategy. “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,” he said. “We look forward to furthering our strategy of delivering more value with less emissions.”
ARC President and CEO Terry Anderson described the transaction as a milestone for the company’s three-decade history. “Through this transaction, we will realise this tremendous value and become part of a dynamic global energy leader capable of realising the full potential of our business and delivering on Canada’s exciting energy future,” he said.
What Shareholders Will Receive
The deal structure offers ARC shareholders near-term cash liquidity alongside ongoing equity exposure through Shell shares, which are listed on the London Stock Exchange. Shell currently pays a quarterly dividend of US$0.372 per share, providing ARC shareholders who receive Shell stock with access to one of the world’s largest integrated energy companies and its existing shareholder returns programme.
ARC’s board of directors unanimously approved the transaction and is recommending that shareholders vote in favour of the deal. Board chair Hal Kvisle said the agreement delivers compelling value and brings together two companies with shared commitments to safety, operational excellence, and community. A special shareholder meeting to vote on the transaction is expected to be held in July 2026, where approval by at least 66⅔ per cent of votes cast will be required.
Regulatory and Closing Timeline
The transaction is subject to regulatory approvals, including under the Investment Canada Act, and is expected to close in the second half of 2026. It also requires clearance under Canada’s Competition Act, the Canada Transportation Act, and the US Hart-Scott-Rodino Antitrust Improvements Act. Court approval from the Court of King’s Bench of Alberta is also required.
Should the arrangement agreement be terminated under certain circumstances, ARC would be required to pay Shell a termination fee of $600 million. ARC is expected to continue paying its regular quarterly dividend of $0.21 per share until closing, with the next payment anticipated on July 15, 2026.
RBC Capital Markets is serving as exclusive financial advisor to ARC and has provided a fairness opinion to the ARC board. Burnet, Duckworth & Palmer LLP is acting as lead legal counsel to ARC, with Freshfields LLP advising on UK and US matters and Baker Botts LLP handling US regulatory counsel.
For more information visit www.arcresources.com
