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The oil and gas Anglo-dutch giant Shell will buy the British company BG for £47 billion in cash and stock, the two companies revealed in a statement on the eight of April. As a result of the move, BG shareholders will own around 19% of the combined group, which will add 25 to Shell's proved oil and gas reserves and 20% to production. The position of the two in new oil and gas projects will be strenghtened, particularly concerning Australian LNG and Brazil deep water.
“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." said Jorma Ollila, Chairman of Shell.
Ben van Beurden, CEO of Shell, added: “Bold, strategic moves shape our industry. BG and Shell are a great fit. This transaction fits with our strategy and our read on the industry landscape around us. [...] BG will accelerate Shell’s financial growth strategy, particularly in deep water and liquefied natural gas: two of Shell's growth priorities and areas where the company is already one of the industry leaders. Furthermore, the addition of BG's competitive natural gas positions makes strategic sense, ahead of the long-term growth in demand we see for this cleaner-burning fuel.
. BG has a large global LNG portfolio with multiple production sources around the world, including Egypt, Trinidad and Australia. The company has also several projects under development in the US Gulf coast, Canada’s west coast and East Africa. Its fleet includes around 25 owned and leased LNG carriers – one of the largest in the world. Shell has more than 40 owned or leased LNG tankers and the energy giant is linked to around one-third of the world’s LNG carrier operations. The acquisition will then create the world's most important producer and supplier of LNG, at a time that high uncertainty due to declining Asian prices and a still unrecovered European demand.
The press release is available here.
