Royal Dutch Shell has officially acquired 100% of BG Group today (15 February) in a US$70 billion mega merger that leaves Shell as one of the biggest oil and gas companies in the world.
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Shell CEO Ben van Beurden. Image from Shell. |
Shell has now surpassed Chevron as the world’s second-biggest non-state oil company as of this morning. The merger raises Shell’s market capitalization to $177 billion. However, ExxonMobil still remains the world’s most valuable oil company with a market value of $337 billion, according to Bloomberg.
The BG takeover will add to Shell’s oil and gas reserves by about 25%; and 20% to production, including LNG and deepwater assets in Brazil and Australia. According to Simmons & Co., the merger has the potential to increase Shell’s Brazil production from 52,000 boe/d in 2014, to an estimated 550,000 boe/d by the end of the decade.
“BG adds attractive deepwater and integrated gas positions and will act as a catalyst for accelerating the re-shaping of our business,” Shell CEO Ben van Beurden said in January, following BG Group shareholder approval.
The deal follows the sanctioning from the UK court last week on 11 February, and the delisting of BG from the London Stock Exchange this morning.
Now that the acquisition is complete, Shell has warned that it will result in some 10,000 staff and contract positions from both sides, in an effort to streamline and integrate the two companies. A timeline for the job cuts has not been revealed.
Shareholders from both companies overwhelmingly approved the merger at the end of January.
Less than a year ago in April, Shell made the $70 billion cash and share offer to BG.
Read more:
UK court sanctions Shell, BG merger
Shell, BG merger gets final approval
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