Partner Article

Shell to takeover BG Group in £47bn deal

In a joint statement this morning BG Group and Shell have agreed on a takeover bid worth £47bn.

Shareholders would receive 383 pence per BG Share and 0.4454 Shell B Shares.

The combination will result in BG Shareholders owning approximately 19% of the Combined Group.

Shell expects the merger to generate pretax synergies of approximately $2.5 billion a year.

This mega-merger will result in a company with a combined market capitalisation of over £200bn.

Shell expect the combination to help with growth and will add 25% to Shells oil and gas reserves and 20% to production, each on a 2014 basis.

Chairman of Shell, Jorma Ollila, said: “This is an important transaction for Shell, accelerating the delivery of our strategy for shareholders.

“The result will be a more competitive, stronger company for both sets of shareholders in today’s volatile oil price world. “BG shareholders will receive significant value through the premium being offered for their shares.

“They will become shareholders in Shell, accessing an attractive dividend policy, a share in the significant synergies and the compelling upside and enhanced operating capability of the combined group. “We believe that the combination is in the interests of both our companies and their shareholders.”

Chairman of BG, Andrew Gould, said: “This offer represents an attractive return for BG shareholders.

“BG has a strong portfolio of operations including growth assets in Australia and Brazil and a highly competitive LNG business, as well as an enviable track record of exploration success.

“The BG Board remains confident in BG’s long-term prospects under the leadership of Helge Lund. Shell’s offer, however, allows us to accelerate and de-risk the delivery of this value.

“The structure of the offer will provide BG shareholders with an attractive premium and a substantial cash return as well as enabling them, if they wish, to participate in the benefits of the combination through the share component.

“For these reasons, the BG Board recommends the offer.”

The news comes after Shell announced 250 job losses, last month, in the North Sea due to falling oil prices and the need to remain sustainable.

It is also set against the backdrop of George Osborne announcing tax cuts for companies that operate in the North Sea in his 2015 budget.

This was posted in Bdaily's Members' News section by Sophia Taha .