Shell's $70 Billion Takeover Could Herald Wave of Mergers
Oil and gas company Shell has agreed to buy British rival BG Group for $69.7 billion in a deal that may signal a new wave of mega-mergers as the energy industry tries to adapt to lower prices.
April 08, 2015 at 06:04 PM
4 minute read
Oil and gas company Shell has agreed to buy British rival BG Group for $69.7 billion in a deal that may signal a new wave of mega-mergers as the energy industry tries to adapt to lower prices.
Royal Dutch Shell said Wednesday it will pay the equivalent of 13.67 pounds in cash and stock for each share of BG Group, 50 percent more than Tuesday's closing price. The deal will boost Shell's oil and gas reserves by 25 percent, including offshore projects in Australia and Brazil, and give it a bigger presence in the fast-growing liquefied natural gas market, Shell said.
Other energy giants may follow suit as they look to boost growth through acquisitions after increased production in the U.S. helped trigger a plunge in oil prices. The last wave of oil mergers took place in the 1990s after new production from the North Sea, Alaska and Mexico led to excess global capacity and companies linked up to protect themselves, or bought weaker rivals at lower prices.
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