Shell to buy BG Group in $70B energy deal | Business News

Shell to buy BG Group in $70B energy deal

8 Apr 2015 | Author: | No comments yet »

European stocks rise as energy shares rally.

THE HAGUE, Netherlands (AP) — Royal Dutch Shell has agreed to buy British gas producer BG Group for 47 billion pounds ($69.7 billion) in cash and stock, the companies announced Wednesday. Consolidations through takeovers and mergers are among the ways energy companies are seeking to reduce costs and become more efficient as oil prices have slumped. A joint statement said the boards of both companies are recommending that shareholders approve the deal that will create a more competitive, stronger company for both sets of shareholders in today’s volatile oil price world. Shell said the takeover will add 25 percent to its proved oil and gas reserves and 20 percent to production compared with 2014, and boost its position in new oil and gas projects in Australia and Brazil. “Bold, strategic moves shape our industry,” Shell CEO Ben van Beurden said. “BG and Shell are a great fit.

The benchmark index rose 1.6 percent on Tuesday as FedEx’s 4.4 billion-euro ($4.8 billion) bid for Dutch package delivery firm TNT Express sparked a rally in the sector. This transaction fits with our strategy and our read on the industry landscape around us.” “The addition of BG’s competitive natural gas positions makes strategic sense, ahead of the long-term growth in demand we see for this cleaner-burning fuel,” he said. “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,” he said. Shares in Sky rose 3.6 percent after sources said French media conglomerate Vivendi was looking at a possible acquisition of the pay-TV group, which has a market value of 17.6 billion pounds. First-quarter S&P 500 earnings are projected to have declined by 2.8 percent from a year ago – which would make the quarter the worst for results since the third quarter of 2009 – hurt by the surging dollar, falling oil prices and another severe winter. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles.

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