Shell and BG agree to create a $434 billion super group

ShellBEN STANSALL/AFP/Getty ImagesSimon Henry, Chief Financial Officer of Royal Dutch Shell, addresses a press conference in central London on January 29, 2015,

Shell and BG Group will create an oil super merger after both parties agreed on a new deal.

Shell, worth £136 billion ($263 million), revealed in a regulatory announcement on the London Stock Exchange that it has valued BG Group at £47 billion.

If the offered deal goes through, it will create a super group worth £224 billion in combined value.

Under the terms of the deal, BG shareholders will be entitled to receive 383 pence in cash for each BG share and 0.4454 Shell B shares for each BG share.

BG shareholders will end up owning 19% of the new combined group.

“Bold, strategic moves shape our industry. BG and Shell are a great fit. This transaction fits with our strategy and our read on the industry landscape around us,” said Ben van Beurden, CEO of Shell in a statement.

“At the start of 2014, Shell embarked on an improvement programme, including divestments and the restructuring of underperforming businesses, whilst at the same time delivering profitable new projects for shareholders. This programme is delivering, at the bottom line.

“BG will accelerate Shell’s financial growth strategy, particularly in deep water and liquefied natural gas: two of Shell’s growth priorities and areas where the company is already one of the industry leaders. Furthermore, 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.”

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