Shell Announces Shareholder Approval for BG Acquisition

by Ship & Bunker News Team
Friday January 29, 2016

Royal Dutch Shell plc (Shell) hasĀ announced the shareholders of BG Group plc (BG) have voted in favour of a BG takeover by Shell.

It is reported that, on Thursday 99.53 percent of BG shareholders voted in support of the $52 billion acquisition, a merger that is expected to result in the creation of the world's biggest liquefied natural gas (LNG) trader.

BG shareholder support for the merger, which will come into effect on February 15, is said to have come a day after 83 percent of Shell's shareholders approved the deal as well.

As Ship & Bunker reported in April, observers have pointed to BG Group's LNG assets as Shell's key motivation for the takeover.

Shell's CEO Ben van Beurden is reported to be aiming to focus the company's future operations on LNG and deep water oil production.

"I very strongly believe in what Shell is trying to do long term," said BG Chairman Andrew Gould.

"The idea that they try to specialise in their strengths being deepwater and LNG is absolutely the right thing to do."

The acquisition is reported to be expected to grow Shell's oil and gas production by about 20 percent.

Further, with the two companies combined, Simmons & Company International says Shell will overtake Chevron Corporation (Chevron) as the second-largest publicly-traded oil and gas company in terms of market value, and by 2020 will take the place of Exxon Mobil Corp. (Exxon) as the largest publicly-traded oil and gas producer.

Following news of the merger's approval, BG's CEO Helge Lund is said to be resigning the position, with Shell executive Huibert Vigeveno, said to be set to fulfill the role of transitional CEO during the merging process.

It is reported that the integration of the two companies will spur thousands of job cuts, billions of dollars in asset sales, as well as the amalgamation of the two companies' global trading and production operations.

Earlier this month, Ship & Bunker reported that BG has been developing the LNG "ship of the future" which enables a 3 to 5 percent savings in fuel consumption and corresponding emissions.