Canadian energy company ARC Resources said on Tuesday its shareholders have voted overwhelmingly in favour of being acquired by Shell, clearing one of the last major hurdles for what ranks among this year’s biggest energy sector transactions.
Shareholders gathered at a special meeting where 99.54% of votes cast backed the arrangement, a margin that underscores how little resistance the deal has faced since it was first unveiled.
Deal background
Shell and the Calgary-based natural gas  producer entered into a definitive arrangement agreement in late April, under which Shell will acquire all outstanding ARC shares in a cash-and-share transaction valued at approximately $22-billion including assumed net debt. The $16.4-billion headline figure reflects the equity value of the deal, with Shell shares making up 75% of the consideration paid to ARC shareholders and cash making up the remainder.
Under the terms, ARC shareholders are entitled to consideration of $32.80 a share, calculated using the closing price of Shell shares on the London Stock Exchange and the pound sterling-to-Canadian-dollar exchange rate published by the Bank of Canada as of April 24. That represented a 27% premium to ARC’s closing share price on the Toronto Stock Exchange on the last trading day before the deal was announced, and a meaningful premium to its 20-day and 30-day volume-weighted average trading prices over the same period.
The acquisition is central to Shell’s strategy of expanding its natural gas footprint in North America, giving it a substantially larger position in the Montney formation, a resource-rich shale play straddling Alberta and British Columbia that has become one of the continent’s most closely watched natural gas and natural gas liquids basins. ARC’s asset base includes operations at Attachie, Kakwa, Ante Creek, Sunrise, Greater Dawson and Septimus and Sundown.
Shell has pointed to the long-duration nature of ARC’s Montney acreage, and particularly the long-term resource potential at Attachie, as a key driver behind the deal. The company has also flagged the strategic value of ARC’s undeveloped natural gas properties located adjacent to its own operations that connect into LNG Canada, the liquefied natural gas export terminal in which Shell holds a 40% interest through its Phase 1 development. A potential Phase 2 expansion of LNG Canada remains subject to a final investment decision.
Shareholder considerations
In outlining the deal to shareholders, ARC’s board pointed to several factors behind its recommendation to vote in favour. Chief among them was the ability for shareholders to choose between retaining equity exposure to Shell’s global integrated energy platform through Shell shares, or monetising some or all of that holding given their liquidity.
The board also highlighted Shell’s shareholder returns policy, which commits to distributing 40% to 50% of cash flow from operations through a progressive dividend, currently growing at 4% annually, combined with ongoing share buybacks. Shell’s buyback announced alongside its first-quarter 2026 results marked its 18th consecutive quarter of repurchases of at least $3-billion, while its interim dividend for the quarter came to $0.3906 a share.
Beyond the financial terms, the ARC board said Shell’s investment-grade credit rating and diversified global portfolio should reduce cash-flow volatility for the combined business, improve its cost of capital, and reduce its exposure to pricing set within a single basin. Shell has also indicated it intends to maintain a significant operational presence in Western Canada and to integrate ARC’s workforce into its Canadian operations, a commitment the ARC board said would support continuity for employees, host communities and Indigenous partners in the regions where it operates.
Regulatory progress and next steps
ARC said several regulatory approvals required to close the transaction have already been secured, including clearance under Canada’s Competition Act and Canada Transportation Act, as well as approval under the US Hart-Scott-Rodino Antitrust Improvements Act.
Shell has also cleared a procedural hurdle tied to its capital returns programme. The company paused its $3-billion share buyback programme last month to comply with securities law requirements ahead of the shareholder vote, and the Alberta Securities Commission has since granted Shell exemptive relief related to its share repurchase programmes in the UK and the Netherlands, satisfying another condition of the arrangement.
With shareholder approval secured, the companies now await a hearing before the Court of King’s Bench of Alberta, scheduled for Wednesday, which represents the final approval step in the plan of arrangement. Assuming the court signs off, the transaction is expected to close in the second half of 2026.
