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 The acquisition, which was announced on April 8 and is biggest in
the sector in a decade, has been cleared by China's Ministry of
Commerce, Shell said on Monday, after earlier approvals from
Australia, Brazil and the European Union.
Shell and BG will now send a merger prospectus to their shareholders
and hold special general meetings for votes on the deal. If
approved, it will face a court hearing 10 days later and could be
completed by early February.
Some shareholders, however, have voiced concern over the merits of
the acquisition following the sharp slide in oil prices. The fall in
Shell's share price since April means the value of the deal has
fallen to $53 billion from $70 billion.
Shortly after announcing the green light from China, Shell issued a
statement saying it expected to cut about 2,800 roles globally from
the combined group.
That would be nearly 3 percent of the group's combined workforce of
about 100,000, or equivalent to more than half BG's roughly 5,000
employees.
The Anglo-Dutch oil and gas company had already outlined steps to
protect dividend payouts and cashflow following the merger, which
include cost savings of $3.5 billion and $30 billion in asset
disposals.
The new job cuts are also in addition to previously announced plans
to reduce Shell's headcount and contractor positions by 7,500
worldwide.
Shell B shares were down 1.6 percent by 1217 GMT, while BG shares
traded 0.3 percent lower.
A BG spokesman said the company would remain focused on its business
plan until the deal is completed.
INVESTOR CONCERNS
The combination will transform Shell into the world's top liquefied
natural gas (LNG) trader and a major offshore oil producer focused
on Brazil's rapidly-developing sub-salt oil basin that would rival
Exxon Mobil's position as the world's biggest international oil
company.
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Shell has nevertheless had to battle a sharp slide in oil prices,
which have fallen from $55 a barrel in April to below $40 a barrel,
which some investors said undermined the deal.
"The deal doesn't make financial sense at the current oil price. You
have got to be pretty bullish on the current oil price to make this
deal work." David Cumming, Head of Equities at Standard Life
Investments, told BBC Radio on Monday.
Analysts at Credit Suisse, however, said the deal still made
strategic sense.
"Yes, it is tough when one looks at spot oil prices ... We are in
the camp of 'Yes', not just because of the strategic rationale
longer term, but also because of Shell's CEO and Chairman, who we
think are the right people at the helm in this environment," the
bank said.
Last month, sources told Reuters that the Chinese Ministry of
Commerce had pressed Shell to sweeten long-term LNG supply contracts
as the world's top energy consumer faces a large surfeit over the
next five years.
The integration of the two companies has been planned by a joint
committee in recent months but could encounter some difficulties as
BG's small and relatively nimble operations are merged with Shell's
much larger structure.
(Additional reporting by Adam Rose; editing by Mark Potter and David
Clarke)
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