Shell → BG Group
Royal Dutch Shell's £47bn cash-and-share takeover of BG Group, agreed in April 2015 during an oil-price downturn and completed in February 2016, bought the liquefied natural gas and Brazilian deep-water positions at the centre of Shell's strategy, and was funded partly by $30bn of asset sales.
A £47bn cash-and-shares offer that made Shell the largest supplier of liquefied natural gas.
- Value
- $70B
- Announced
- April 2015
- Completed
- February 2016
- Sector
- Energy
- Deal type
- acquisition
- Acquirer
- Shell (Netherlands)
- Target
- BG Group (United Kingdom)
Why it mattered
BG, a FTSE 100 company, produced about 680,000 barrels of oil equivalent a day in 25 countries, was the largest supplier of LNG to the United States and was bringing on two growth projects: LNG made from Queensland coal-seam gas, and deep-water fields in Brazil's Santos Basin. Helge Lund had joined as chief executive from Statoil only two months before Shell's offer.
Shell offered 383p in cash and 0.4454 Shell B shares for each BG share — about 1,367p, a premium of roughly 50% to the previous close — valuing BG at about £47.0bn and leaving its shareholders with 19% of the combined group. Shell said the deal would add some 25% to its proved reserves and 20% to production, lift its equity LNG capacity from 26m tonnes a year in 2014 to 45m in 2018, and generate about $2.5bn a year of synergies. Shell also promised $30bn of asset sales in 2016–2018 and a share buyback of at least $25bn from 2017 to 2020.
Clearances came from Brazil, the EU and Australia, and China's commerce ministry cleared the deal unconditionally on 14 December 2015. Shell's shareholders approved it on 27 January 2016 with 83% in favour, BG's the next day, and the takeover completed on 15 February 2016.
What it left behind
The purchase made Shell the world's second-largest non-state oil company, ahead of Chevron. Lund left on completion; in 2019 he became chairman of BP. The disposals largely followed — $27bn of the $30bn was done by July 2018 — but the buyback, promised for 2017, began only that month, after Shell had cut its debt and ended its scrip dividend. The oil collapse of 2020 then forced Shell's first dividend cut since the Second World War. Having announced a move of its headquarters to London, the company dropped "Royal Dutch" from its name in January 2022, and under Wael Sawan, chief executive since 2023, it completed the purchase of ARC Resources in Canada, on 2 September 2026 at an enterprise value of about $16.5bn. A share-heavy purchase made in a commodity downturn can work if the disposals that fund it are committed up front; the promised shareholder rewards still wait on the oil price.