The CEO of Royal Dutch Shell, Ben van Beurden makes with the proposed acquisition of the British gas producer BG Group a bold step. The Dutchman, who had the Swiss Peter Voser replaced at the head of Shell last year was aware when he on a Sunday Andrew Gould, the Chairman of BG, called mid-March to propose to him the transaction. The decline in oil prices since the middle of last year the company provides opportunities to buy companies because the ratings are low. On the other hand, exerts the decline in prices also put pressure on the energy companies. The acquisition of BG is a headlong rush.
Long Targeting
Shell wants the British gas producer to take at a price of £ 47 billion (67 billion francs) payment to be made partly in cash and partly in Shell shares. The Board of Directors of the gas company recommends acceptance of the offer. In the proposed transaction, the BG shareholders would receive a share of about 19% to Shell. BG shareholders will receive for each share £ 3.83 in cash and 0.4454 shell-B Securities. This represents a premium of about 50% compared to the BG-share price on Tuesday.
If the assumption is made, would create the world’s second largest oil and gas giant by market capitalization. It is the heaviest transaction in the energy industry for more than ten years. Shell CEO van Beurden, told reporters that the company had already changed always looking for acquisition candidates. BG had already been standing on top of the list. BG is one of the largest producers and distributors of LNG (Liquefied Natural Gas, LNG). Shell is one of the pioneers of LNG. Due to the low ratings from the fallen oil price it is not only a logical but also a compelling transaction, van Beurden said. With the acquisition of Shell can increase the proven oil and gas reserves by 25% and production by 20%. In recent years, the group effort, production and reserves expressed to increase. The company expects the merger (pre-tax) savings of $ 2.5 billion annually. Van Beurden also spoke of it that should be rejected by the collective portfolio investments through 2018 of $ 30 billion. There were among the projects already candidates, but it was decided anything yet.
ungracious Exchange
The transaction represents According to van Beurden a specific concentration of shell on the growth areas of deepwater drilling and natural gas are . In recent years, the company set up, as well as other energy companies, increasingly on natural gas, which can be used in comparison with coal “clean”. Together with BG, Shell would strengthen its position in the market for LNG and among international corporations the distance to the number 2, Exxon Mobil, enlarge. BG holding large and expensive gas projects in Australia, Kazakhstan and East Africa.
In addition, BG is involved in a deepwater project for production of oil off the Brazilian coast. Shell has also been involved in Brazil at deep-sea deposits. The transaction was well little good will among the Shell shareholders. The price of the B shares on the stock market fell by more than 8%. This concerns could be linked to shell too high a price for BG pays. The Group takes on the Cash debt in the amount of $ 20 billion record.
It has also been speculated that potential bidders like Exxon-Mobil to be quenched with a generous offer. Van Beurden however, said that a premium of 50% is customary. From 2016, when the transaction is completed, an increased cash flow should already be observed. The price is also not bet on higher oil note. Moreover, Shell announced a buyback program for the period 2017-2020 of at least $ 25 billion to reassure shareholders. However, the dividend is still the main instrument to distribute profits.
BG with turbulence
BG Group is not to be confused with British Gas. Britain’s third-largest producer of natural gas originated from the privatization of British Gas Group in the 1980s, which was later divided into BG Group as a production unit and in the utility Centrica. Centrica holds the trademark for British Gas in the UK. BG felt the decline in oil prices since the middle of last year, particularly strong.
2014 had the ailing company to report a loss, after he had made allowances of nearly $ 9 billion due to lower prices. Furthermore, it had previously been turmoil in the company’s top: last year lost after only 16 months in office, the previous CEO of the British company, which had to revise earnings estimates downward, his post. In this year, Helge Lund, the former head of the Norwegian group Statoil, for a short time the lead.
No comments:
Post a Comment