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BG Takes the Road to Shell and Back - the mega merger moves forward

By Malcolm Stacey

20 November 2015 00:37

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Hello Share Trundlers. The big Royal Dutch Shell (RDSA) and BG (BG.) merger has been the elephant in the room at many a big discussion on current share trading. It was nearly a year ago, or seems like it, that Shell said it wanted to take over BG. (We are not talking about British Gas here, which is really Centrica (CNA). Confused? You will be.)

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Comments

Phil

20 November 2015, 02:14

Malcolm.

It was my understanding that the Australian regulation is a two part process, the Antitrust authorities and the Foreign Investment review board. The Australian Antitrust commission have cleared it but the deal is still under scrutiny of the Foreign Investment board.

From my own point of view, the Australian Antitrust were always the issue, so this is a major hurdle, in terms of the deal itself, I can’t see either BG or Shell have any choice. As far as the Chinese are concerned, as they have pretty much created on whole industrial revolution on a constant copyright and patent infringement I cannot see they will object, but you never know.

The M&M board have a limit date of Jul 2016, unless both parties request an extension, but as long as it clears all the hurdles, I think the pair of them will be keen to see it done. I have already made the decision that I am in the end game with BG now, even if this deal fails, it will still have been a good share but it is time for me to move on.
Malcolm Stacey

20 November 2015, 04:04

Thanks for the extra information,Phil. I’d also thought of leaving BG, as it is my biggest investment, but after selling a few, I’ve decided to hang on in the fond hopes that the merger will happen and oil values will rise.
alcira16247

24 November 2015, 03:10

Malcolm

There seems to be growing doubts as to whether the merger will actually happen.

Apart from The Qatar Investment Authority offloading shares in Shell and BG worth in the region of a £1 Billion, over the last three weeks, there seems to be persistent pressure on Shell CEO, Ben van Beurden, to the logic of pressing forward with the merger given the collapse of crude.

Its understood in order for the deal to work oil prices needed to be $67 in 2016, $75 in 2017 and $90 by 2018.

With many analysts starting to predict oil prices slumping further and for longer, Shell’s commitment to proceed in its £43 Billion takeover, must be questionable.