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 The success or otherwise of the complex merger will define the
legacy of Shell Chief Executive Ben van Beurden, seeking to
transform Shell into a more specialized group focused on the rapidly
growing LNG market and deepwater oil production.
"We will now be able to shape a simpler, leaner, more competitive
company, focusing on our core expertise in deep water and LNG," van
Beurden said in a statement. In 2014, Shell acquired Repsol's
LNG business.
Van Beurden's vision won overwhelming support from shareholders,
though a number of major investors had voiced concerns that the
forecast slow recovery in oil prices would strain Shell's financials
and risk its growth plans.
The deal, announced 10 months ago, creates a combined group which
will leapfrog Chevron <CVX.N> to become the world's second-largest
public oil and gas company by market value behind Exxon Mobil Corp.
BG shareholders largely opted to receive shares rather than cash
under the proposed mix and match deal, according to a statement. BG
becomes a wholly-owned subsidiary of Shell and will be headed by
Dutchman Huibert Vigeveno, who has headed the integration planning
team and will oversee its implementation.
SPECTACULAR GROWTH
Signs at BG's headquarters in Reading outside London were replaced
by Shell's red-and-orange logo over the weekend, according to
company sources.
Incumbent CEO Helge Lund, former head of Norwegian oil major Statoil
who led it through a period of spectacular growth, is set to step
down and has yet to indicate his plans.
Shell has said it will cut thousands of jobs from the combined group
and sell $30 billion of assets over the next three years in order to
finance the deal, buy back shares and support dividends, which it
has vowed to maintain or increase.
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Shell is betting heavily on a rapid growth in the global LNG market
over coming decades as the world turns to less polluting sources of
energy. Yet with oil prices near a 12-year low, a struggling global
economy and major restructuring under way of its oil and gas
operations across the globe, the merger is set to be a challenge
even for 126-year-old Anglo-Dutch company.
Shell saw its income drop 87 percent in 2015.
"The financials will work in time, admittedly perhaps not as
originally hoped, but we still see this deal as accretive within a
two- to three-year timeframe," said Jason Kenney, analyst at Grupo
Santander, who estimates the acquisition will increase Shell's oil
and gas production to around 4.7 million barrels of oil equivalent
by 2020.
"The deal means Shell will have little need to explore near or
medium term, or to invest in highly capital-intensive unconventional
projects," Kenney added.
(Additional reporting by Karolin Schaps; Editing by David Holmes)
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