Investments  

Shell and BG Group agree £47bn takeover deal

Shell and BG Group agree £47bn takeover deal

A major £47bn deal has been agreed between energy behemoth Royal Dutch Shell and rival BG Group.

A statement on the stock exchange this morning announced the Anglo Dutch group would buy the entire share capital of BG Group for “approximately £47bn”.

The move will mean Shell increases its proven oil and gas reserves by 25 per cent and 20 per cent to production.

Article continues after advert

This will be a major boost for the company given the recent falls in oil prices have made exploration and drilling reltively more expensive.

Another sweetner to the deal is that Shell will now have was it called “enhanced positions in competitive new oil and gas projects”, especially in liquified natural gas in Australia and an oil province off the coast of Brazil.

BG shareholders will receive 383p in cash and 0.4454 of Shell B shares, equivalent to 1,350p per BG share based on 90-day trading volumes.

The move represents roughly a 50 per cent mark-up on BG’s value.

The deal will result in BG shareholders owning approximately 19 per cent of the combined group.

Shell said it expected to pay a dividend of $1.88 per ordinary share in 2015 and “at least that amount” in 2016.