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The Mail on Sunday: How Browne planned to merge with Shell and create the world’s biggest firm

By Glen Owen
6 May 2007

LORD BROWNE was determined to secure his legacy by masterminding a mega-merger with Shell to create the largest company in the world, according to Jeff Chevalier.

The proposal to form a corporate giant called BPShell has been the subject of City rumours for years. But only now can it be revealed how tantalisingly close Lord Browne came to pulling off his coup.

Mr Chevalier describes how Lord Browne moved, with characteristic ruthlessness, after his arch rival was plunged into turmoil over oil reserves in 2004.

In the spring of that year, Shell had been hit by the resignation of its chairman and two other senior executives after it was revealed that the company had overstated its reserves by nearly 25 per cent Industry analysts said that the ructions left the company vulnerable to a hostile bid by a rival.

Five months later, Lord Browne made his first move, flying from his flat in Venice to open talks about a proposed merger at Shell’s offices in the Netherlands.
The following year, after BPs financial advisers had calculated that the cost savings resulting from such a merger would top £5 billion a year, Shell’s chief executive Jeroen van der Veer flew to Venice to discuss directly with Lord Browne how ‘Project Fairground’, as it was codenamed, could be completed in the face of various political and regulatory hurdles.

At the time, Shell executives were admitting privately that a merger was part of its ‘scenario planning’ exercises after a post-crisis shake-up of the management structure had smoothed the path to any union.

Mr Chevalier says Lord Browne was truly excited’ at the prospect of a merger and ‘spent weeks talking about it… it was the major thing on his mind’.

The new company would have generated phenomenal combined revenues of £300 billion a year but the proposal was eventually dropped for regulatory reasons.

Mr Chevalier said: ‘John was mad that his exit from BP would not be “historic”. John would have been proud to have created the largest company in the world.’
At the time, it was assumed that BP would have the whip hand in any merger – effectively taking over its rival – but following its recent difficulties analysts now say a weakened BP could fall victim to a takeover by Shell.

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

2 Comments on “The Mail on Sunday: How Browne planned to merge with Shell and create the world’s biggest firm”

  1. #1 pardeep singh chahal
    on Jun 21st, 2007 at 20:40

    hi i am pardeep from alberta calgary i want job and get good educationin u r company ples tell me what should i do
    thanks
    see a

  2. #2 Yousef
    on Jun 7th, 2007 at 19:04

    Could be happened…why not!

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