Shell agrees to buy BG Group for £47 billion

LONDON, April 8, 2015 – Shell announced its plans to purchase UK exploration company BG Group on Wednesday. The £47-billion purchase would increase Shell’s proved oil and gas reserves by around 25 percent and production by around 20 percent. The deal is expected to be completed in 2016.

The acquisition would provide Shell with a greater presence in Brazil’s deepwater sector and Australian LNG and make the super-major the largest global producer of LNG.

“BG’s deep water positions and strengths in exploration, liquefaction and LNG shipping and marketing will combine well with Shell’s scale, development expertise and financial strength,” Helge Lund, CEO of BG, said in a statement.

Representatives of the two firms said Shell would satisfy the terms of the contract with a combination of cash and BG shares valued at 52 percent of the average trading value over the past three months. BG Group shareholders are set to own around 19 percent of the new entity.

Shell has also announced plans to divest itself of £20.2 billion in assets from 2016 to 2018 in addition to implementing a share buyback program worth around £17 billion between 2017 and 2020.

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