Fees from Shell's BG purchase could be among 10 biggest

Wed Apr 8, 2015 11:20am EDT
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By Freya Berry and Sinead Cruise

LONDON (Reuters) - Fees from Royal Dutch Shell's $70 billion takeover of British energy firm BG could be among the top 10 most lucrative transactions on record, according to estimates from Thomson Reuters and Freeman Consulting. 

Shell's cash and share offer, recommended by the board of BG on Wednesday, could earn its three financial advisers a combined $182.6 million in fees, according to the estimates.

That would make the deal the eighth-biggest global payout for an M&A transaction. It is the biggest acquisition to be announced this year.

It is expected that Bank of America Merrill Lynch will earn approximately $82 million advising Shell, while Goldman Sachs and advisory boutique Robey Warshaw LLP will earn approximately $50.3 million each for their work for BG.

The largest ever fees from an M&A deal were the $530.7 million collected by banks on the acquisition of Mannesmann AG by Vodafone in 1999.

The limited number of advisers on the Shell/BG deal contrasts with many major deals which have historically involved at least two and sometimes three or four financial advisers to each party.

Nine banks shared the spoils when Glencore took over Xstrata in 2012, while seven are handling the merger of Holcim and Lafarge and related asset sales.

None of the parties involved has provided details on their likely earnings from the BG deal.   Continued...

Ben van Beurden (L), chief executive officer of Royal Dutch Shell, shakes hand with Andrew Gould, chairman of the BG Group, during a news conference at the London Stock Exchange, April 8, 2015.  REUTERS/Stefan Wermuth