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The Guardian: Royal Dutch Shell… should merge, either with BP or Total

Tuesday 5 December 2006

Oil giant Royal Dutch Shell added 28p to £18.04. A hefty note from ABN Amro suggests the company should merge, either with BP or Total. “In our opinion, the creation of an oil mega-major would generate important strategic and financial benefits for the companies and significant value for shareholders,” wrote ABN.

“BP-Royal Dutch Shell and Royal Dutch Shell-Total are feasible combinations.

The regulatory responses to both would be manageable.

“Despite the need to divest some downstream activities, we believe the synergy potential of both combinations would be material, with pre-tax cost savings and revenue enhancements of up to $10.3bn per annum.”

The bottom line is ABN is recommending a buy with a £21.50 target price. It says this could rise to £30 in the event of a merger.

Full article

http://business.guardian.co.uk/marketforces/story/0,,1963939,00.html

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