Shell pursues transition plan after sealing $53 billion BG deal

Mon Feb 15, 2016 4:51am EST
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By Ron Bousso

LONDON (Reuters) - Royal Dutch Shell (RDSa.L: Quote) on Monday sealed the $53 billion (36 billion pounds) acquisition of British rival BG Group to form the world's top liquefied natural gas company, even as slumping oil prices cast a shadow on the upcoming years of transition.

The success or otherwise of the complex merger will define the legacy of Shell Chief Executive Ben van Beurden, seeking to transform Shell into a more specialized group focused on the rapidly growing LNG market and deepwater oil production.

"We will now be able to shape a simpler, leaner, more competitive company, focusing on our core expertise in deep water and LNG," van Beurden said in a statement. In 2014, Shell acquired Repsol's (REP.MC: Quote) LNG business.

Van Beurden's vision won overwhelming support from shareholders, though a number of major investors had voiced concerns that the forecast slow recovery in oil prices would strain Shell's financials and risk its growth plans.

The deal, announced 10 months ago, creates a combined group which will leapfrog Chevron (CVX.N: Quote) to become the world's second-largest public oil and gas company by market value behind Exxon Mobil Corp (XOM.N: Quote).

BG shareholders largely opted to receive shares rather than cash under the proposed mix and match deal, according to a statement. BG becomes a wholly-owned subsidiary of Shell and will be headed by Dutchman Huibert Vigeveno, who has headed the integration planning team and will oversee its implementation.


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