28th Jan 2016 14:41
LONDON (Alliance News) - Royal Dutch Shell PLC is set to formally complete its mega-merger with BG Group PLC next month after BG shareholders gave the deal the green light at a general meeting held Thursday.
BG Group said 99.55% shareholders voted in favour of the merger between the two giants at a general meeting, with over 87% approving the court-sanctioned scheme of arrangement at a related court meeting.
The approval follows on from over 83% of Shell shareholders approving the deal on Wednesday.
Shell needed more than 50% of votes cast at the meeting to approve the deal whilst BG needed more than 75%.
With both sets of shareholders in favour of the deal, completion of the deal relies on the court sanctioning the scheme of arrangement by which the merger is being facilitated. A court hearing will be held on February 11, with the deal becoming effective on February 15 if all goes to plan.
There were concerns that shareholders, especially Shell shareholders, would potentially reject the deal following concerns raised in recent months about the value of the deal given the slump in world oil prices since the deal was announced in April last year.
Standard Life Investments was one of Shell's only shareholders to publicly state it would vote against the deal, describing it as "destructive for Shell shareholders." But the giant clearly had the support it needed, as it was backed by Institutional Shareholder Services, a prominent proxy advisory body.
BG Group did not comment on the shareholder result Thursday, as it waits for the deal to be formally completed, but Shell Chief Executive Ben van Beurden welcomed the result.
"I am very pleased that BG shareholders have voted in favour of the combination and look forward to welcoming them onto our register when the transaction closes," said van Beurden.
"BG adds attractive deep water and integrated gas positions and will act as a catalyst for accelerating the re-shaping of our business. We now look forward delivering the benefits of the combination as quickly as possible following completion," he added.
One of the main attractions to BG is its liquefied natural gas portfolio in South America, mainly in Brazil, which will allow Shell to increase its focus on deepwater and LNG operations whilst replenishing its reserves amid natural field declines across its upstream portfolio after years of struggling to replace them.
Shell has previously said it will hold a capital markets day on June 7 to update the market about its plans following the acquisition.
BG Group shares were trading up 2.4% to 1,054.0 pence per share on Thursday afternoon. Shell 'A' shares were up 3.4% to 1,512.50p whilst 'B' shares were up 3.6% to 1,514.50p.
By Joshua Warner; [email protected]; @JoshAlliance
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