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Royal Dutch Shell’s proposed $70 billion acquisition of BG could trigger pre-emption rights

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Extracts from an article by Daniel McCarthy published 9 April 2015 by Micro Cap Observer

Royal Dutch Shell’s proposed $70 billion acquisition of BG could trigger pre-emption rights

The proposed takeover of BG Group by Royal Dutch Shell in a $70 billion deal could be short-sighted, and capable of triggering pre-emption rights in gas and oil fields in a backlash that could undermine the value and integrity of the deal.

Anglo-Dutch oil giant, Shell revealed the main reason for its attempt to acquire BG Group was because of its position on gas prospects in Brazil, where BM-S-9 and BM-S-11, the two exploration oil blocks controlled by BG in Brazil.

However, BG revealed in its annual report published recently that: “In certain specific circumstances, it is possible that BG Group’s partners in BM-S-9 (Petrobras and Repsol Sinopec Brasil) have a right of first refusal to acquire BG Group’s interest…in the event of a change of control of BG Group Plc.”

For strategic reasons, both BG and Shell would rather not make any comments on the BM-S-9 rights.

FULL ARTICLE

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