Tuesday, January 18, 2022
69.3 F
Fort Worth

Shell to buy BG Group in $69.7 billion takeover

🕐 1 min read

THE HAGUE, Netherlands (AP) — Royal Dutch Shell has agreed to buy British gas producer BG Group for 47 billion pounds ($69.7 billion) in cash and stock, the companies announced Wednesday. The move gives oil giant Shell a greater stake in natural gas markets in the wake of tumbling oil prices.

Consolidations through takeovers and mergers are among the ways energy companies are seeking to reduce costs and become more efficient as oil prices have slumped.

A joint statement said the boards of both companies are recommending that shareholders approve the deal that will create a more competitive, stronger company for both sets of shareholders in today’s volatile oil price world.

Shell said the takeover will add 25 percent to its proved oil and gas reserves and 20 percent to production compared with 2014, and boost its position in new oil and gas projects in Australia and Brazil.

“Bold, strategic moves shape our industry,” Shell CEO Ben van Beurden said. “BG and Shell are a great fit. This transaction fits with our strategy and our read on the industry landscape around us.”

The terms of the offer would result in BG shareholders owning about 19 percent to the new combined business.

Shell said that bringing the two companies together would produce financial gains of about $2.5 billion a year.

Van Beurden said BG was a good fit for Shell looking to the future.

“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,” he said.

BG’s CEO Helge Lund said his company also would benefit from the takeover.

“BG’s deep water positions and strengths in exploration, liquefaction, and LNG shipping and marketing will combine well with Shell’s scale, development expertise and financial strength,” he said.

Related Articles

Our Digital Sponsors

Latest Articles

Get our email updates

Stay up-to-date with the issues, companies and people that matter most to business in the Fort Worth.

  • Restaurants
  • Technology
  • and more!

FWBP Morning Brief

FWBP 5@5

Weekend Newsletter

  • Banking & Finance
  • Culture
  • Real Estate

Not ready to subscribe?

Try a few articles on us.

Enter your email address and we will give you access to three articles a month, to give us a try. You also get an opportunity to receive our newsletter with stories of the day.

This field is for validation purposes and should be left unchanged.