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Shell to Buy BG Group for $69.6 Billion

Screen Shot 2015-04-08 at 08.12.04Shell to Buy BG Group for $69.6 Billion

Deal the latest sign of how tumbling energy prices are shaking up the global oil-and-gas industry

WALL STREET JOURNAL ARTICLE BY SELINA WILLIAMS and IAN WALKER

By SELINA WILLIAMS and IAN WALKER

Updated April 8, 2015 3:19 a.m. ET

LONDON—Petroleum giant Royal Dutch Shell PLC has agreed to buy BG Group PLC for £47 billion ($69.6 billion) in cash and shares, the latest sign of how tumbling energy prices are shaking up the global oil-and-gas industry.

BG shareholders will get 383 pence in cash; and 0.4454 Shell B shares for each share held, giving them 19% of the enlarged group, which will be one of the world’s leading liquefied natural gas firms. The price is a 50% premium to BG’s closing share price of 910.4 pence on Tuesday.

The deal, which confirms an earlier report by The Wall Street Journal, brings together two companies that have been buffeted by a sharp drop in oil and gas prices since last summer and would enable the two European energy giants to eliminate overlapping costs to help compensate for the toll that lower oil prices have taken on their top lines.

“The result will be a more competitive, stronger company for both sets of shareholders in today’s volatile oil price world,” Shell Chairman Jorma Ollila said in the statement.

However, shares in Shell fell 5% in early trading in London, while BG stock rose 37%.

FULL ARTICLE

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