Shell to buy BG group for US$70 bln

09-Apr-15

Royal Dutch Shell PLC has inked an agreement to buy B G Group for US$70 bln, in a deal that marks the most aggressive step yet in the competition to be the world’s dominant supplier of liquefied natural gas. The collaboration draws from potential demand from countries like China, India and others in the developing world will move toward cleaner burning fuels like natural gas instead of coal amid growing pressure to curb emissions. Jorma Ollila, Chairman of Shell 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." Commenting on the Combination, Andrew Gould, Chairman of BG 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."