Royal Dutch Shell to Acquire BG for £47 Billion

Oil giant Royal Dutch Shell Plc has agreed to acquire Reading-based BG Group Plc for approximately £47 billion (US$ 70 billion) in cash and shares. BG buys, ships, markets and sells liquefied natural gas (LNG). According to the press release, BG shareholders will receive 383 pence a share in cash, plus 0.4454 B shares in Shell. In turn, shareholders of BG will own about 19% of the combined company. The combined company would have a market value 2x BP Plc and surpass Chevron Corporation. In a statement by Shell, the deal would add 25% to the combined company’s existing oil and gas reserves and 20% to annual production. This is the largest deal in the oil and gas industry in over a decade.

Sovereign funds directly control more than 7% of BG’s shares as of March 2015.

Sovereign Wealth Funds

Sovereign funds directly control more than 7% of BG’s shares as of March 2015. Norges Bank Investment Management (NBIM), the manager of Norway’s sovereign wealth fund, as of March 2014 owns 5.05% of BG, followed by China’s SAFE Investment Company at 2.04% of BG shares.

Shell was advised by Bank of America Merrill Lynch. BG was advised by Goldman Sachs and its legal advisor was Robey Warshaw LLP.


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