The merger between oil giants Royal Dutch Shell (LON:RDSA) and BG Group (LON:BG) has been given unconditional clearance by China, completing the pre-conditional approval process.
The merger is said to be worth $70 billion, and the merged company would supply around 30 percent of China’s natural gas imports by 2017.
Shell CEO Ben van Beurden said in a statement: “We will now seek approval from both sets of shareholders as we move towards deal completion in early 2016.”
However, shareholder approval has been called into question of late, after one of the company’s biggest stakeholders Qatar Investment Authority sold off shares in both companies worth nearly £1 billion. The QIA, led by the Qatari royal family, is one of Shell’s biggest investors with a 4.88 percent stake.
Shell have seen their share price fall by by 25 percent since announcing its bid for BG in April, with shares in BG Group falling 17 percent. Initially CEO Van Beurden said oil price needed to be around $67 a barrel in 2016, $75 in 2017 and $90 by 2018 for the deal to be sustainable; however, the price of Brent crude is currently around $43 a barrel and the company are pushing on with the deal.
Royal Dutch Shell are currently trading up 0.83 percent at 1465.61 pence per share, with BG group up 2.47 percent.
14/12/2015