London--Energy titan Royal Dutch Shell on Wednesday announced a mega-takeover of British rival BG Group worth £47 billion, consolidating their positions in a sector battered by sliding oil prices.
The cash and shares deal, approved by the BG board and worth the equivalent of $70 billion or 64 billion euros, boosted London's stock market but cast doubt on jobs in the Norh Sea industry.
It will help Anglo-Dutch giant Shell to boost its flagging output thanks to BG's strong position in liquefied natural gas (LNG), a cleaner alternative to coal and nuclear energy.
The new company will be worth twice the value of BP and overtake US energy giant Chevron Corp. upon finalising the sector's biggest deal in a decade, according to Bloomberg News.
BG's share price, which has tumbled over the past year on plunging oil prices, soared by almost 40 percent in reaction to Wednesday's announcement.
"The boards of Shell and BG are pleased to announce that they have reached agreement on the terms of a recommended cash and share offer to be made by Shell," Shell said in a statement.
The offer represents a premium of about 50 percent compared with BG's closing share price on Tuesday, costing Shell "approximately £47.0 billion" for its rival, the statement added.
"The result will be a more competitive, stronger company for both sets of shareholders in today's volatile oil price world," Shell chairman Jorma Ollila said in the release.
It is the first major deal for Helge Lund, formerly chief executive of Norwegian energy giant Statoil, since he took up the reins at BG earlier this year.
At a press conference in London, Shell chief executive Ben van Beurden said there would be savings on manpower but did not detail where these would come.
AFP
