Analysts from major banks see the deal strengthening Canada’s position in global gas markets, potentially accelerating LNG exports and drawing in further consolidation in the Montney region.

The report credits CBC News, citing sources from The Canadian Press.

ARC shareholders will receive 0.40 Shell shares plus $8.20 in cash for each ARC share, valuing the offer at about a 27% premium and a roughly 75% stock to 25% cash mix, subject to approvals.

The deal awaits regulatory and shareholder approvals, with market dynamics noted, including Shell’s past exit from oilsands and broader Middle East tensions affecting energy assets.

ARC’s shares traded nervously ahead of the deal, with a decline tied to disappointing results from the Attachie project, helping to create appetite for a fair-value offer.

Regulatory approvals, including under the Investment Canada Act, are required, and the transaction is expected to close in the second half of 2026 after board, shareholder, and regulatory clearances.

Both boards have approved the deal; completion is anticipated in the second half of 2026, pending approvals.

The transaction comes as global energy markets face disruption from Iran’s closure of the Strait of Hormuz, which has reduced oil and LNG flows and spurred interest in diversifying LNG sources outside the Gulf.

Canada’s LNG expansion plans, including Phase 2 of LNG Canada, are moving toward fast-track review, with analysts expecting continued regional consolidation and more investment in Montney producers.

Shell plans to acquire ARC Resources, a Canadian energy company, for about $16.4 billion to offset declining production and boost output by roughly 370,000 barrels of oil equivalent per day.

The deal is expected to deliver double-digit returns and lift free cash flow per share from 2027 onward.