Following a turbulent few months during which falling oil prices have resulted in thousands of job cuts, billions of dollars in stranded assets and a string of less-than-impressive earnings, Royal Dutch Shell has reached an agreement with BG Group to acquire the smaller rival for $69.6bn. The deal, made up of both shares and cash, represents a 52 percent premium price on BG’s shares, as of April 7, and could create a new entity worth close to $300bn.
In the past six months, the price of oil has plummeted some 50 percent, and even the biggest names in the business are struggling to acclimatise to a new low price environment. However, the acquisition, which represents one of the biggest of the year so far, will go some way towards bolstering Shell’s competencies in deep water and LNG.
