The Boards of Shell and BG have reached agreement on the terms of a recommended cash and share offer to be made by Shell for the entire issued and to be issued share capital of BG.
Under the terms of the Combination, BG Shareholders will be entitled to receive for each BG Share:
•383 pence in cash; and
•0.4454 Shell B Shares
Based on the 90 trading day volume weighted average price of 2,170.3 pence per Shell B Share on 7 April 2015 (being the last Business Day before the date of this Announcement), the terms of the Combination represent:
•a value of approximately 1,350 pence per BG Share; and
•a premium of approximately 52% to the 90 trading day volume weighted average price of 890.4 pence per BG Share on 7 April 2015.
Based on the Closing Price of 2,208.5 pence per Shell B Share on 7 April 2015 (being the last Business Day before the date of this Announcement), the terms of the Combination represent:
•a value of approximately 1,367 pence per BG Share;
•a premium of approximately 50% to the Closing Price of 910.4 pence per BG Share on 7 April 2015; and
•a value of approximately £47.0 billion for BG's entire issued and to be issued share capital.
The Combination will result in BG Shareholders owning approximately 19% of the Combined Group.
Shell expects the Combination to accelerate its growth strategy in global LNG and deep water. The Combination will add some 25% to Shell's proved oil and gas reserves and 20% to production, each on a 2014 basis, and provide Shell with enhanced positions in competitive new oil and gas projects, particularly in Australia LNG and Brazil deep water.
Shell expects the Combination to generate pre-tax synergies of approximately $2.5 billion per annum (which have been reported on) and has also identified further significant opportunities.
In the near term, BG Shareholders will benefit from the dividends enjoyed by Shell Shareholders. Shell today confirms its intention to pay dividends of $1.88 per ordinary share in 2015 and at least that amount in 2016.