Shell sees more job cuts as BG deal gets China green light

Mon Dec 14, 2015 7:57am EST
 
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By Ron Bousso

LONDON (Reuters) - Royal Dutch Shell expects to slash thousands more jobs to save costs if its takeover of BG Group goes through as planned early next year following a final green light from China.

The acquisition, which was announced on April 8 and is biggest in the sector in a decade, has been cleared by China's Ministry of Commerce, Shell said on Monday, after earlier approvals from Australia, Brazil and the European Union.

Shell and BG will now send a merger prospectus to their shareholders and hold special general meetings for votes on the deal. If approved, it will face a court hearing 10 days later and could be completed by early February.

Some shareholders, however, have voiced concern over the merits of the acquisition following the sharp slide in oil prices. The fall in Shell's share price since April means the value of the deal has fallen to $53 billion from $70 billion.

Shortly after announcing the green light from China, Shell issued a statement saying it expected to cut about 2,800 roles globally from the combined group.

That would be nearly 3 percent of the group's combined workforce of about 100,000, or equivalent to more than half BG's roughly 5,000 employees.

The Anglo-Dutch oil and gas company had already outlined steps to protect dividend payouts and cashflow following the merger, which include cost savings of $3.5 billion and $30 billion in asset disposals.

The new job cuts are also in addition to previously announced plans to reduce Shell's headcount and contractor positions by 7,500 worldwide.   Continued...

 
The logo of Shell is pictured at the 26th World Gas Conference in Paris, France, June 2, 2015.  REUTERS/Benoit Tessier