London: Just hours after the two companies confirmed that talks were underway, an agreement has been announced for Shell to acquire BG Group.
The cash and share offer consists of 383 pence cash and 0.4454 Shell B shares valuing each BG Group share around 1,350-1,367 pence. This represents a premium of 50-52% for BG Group shareholders and values the offer at £47bn ($70bn).
BG shareholders will own approximately 19% of the combined group, and Shell expects the acquisition to add around 25% to Shell’s proved oil and gas reserves.
Ben van Beurden, ceo of Shell commented: “Bold, strategic moves shape our industry. BG and Shell are a great fit. This transaction fits with our strategy and our read on the industry landscape around us.“
Van Beurden said that the acquisition will accelerate Shell’s financial growth strategy, particularly in deep water and liquefied natural gas, both of which are Shell’s growth priorities.