Shell Buying BG Group For $70 billion
Posté le 9 avr. 2015
Shell’s acquisition trumps GSK as the biggest U.K-only deal
BG Group’s has been an epic story in the oil & gas industry. In the past 10 years, its production growth, reserve increase rate, total shareholder return and other main indicators have ranked among the forefront of the industry. Especially when it comes to organic growth, E&P and liquefied natural gas, BG Group has experienced extraordinary performance when most of giants are dwindling.
Since 2011, however, BG Group’s business in Brazil and Australia has tread in limbo. This has been partly a result of the increasing interference from government supported Brazilian company Petrobras and the severe insufficiency of human resource in Australia. In 2013, the retirement of legendary CEO, Sir Frank Chapmen, who served in BG Group for more than 40 years and was knighted for his great contribution to the oil and gas industries, also caused a certain impact on BG Group’s development.
The aftermath of Shell’s BG acquisition is predictable: a wave of new acquisitions are coming as big deals are known to happen when the oil market is bottoming.
Last time big oil reached bottom was 1998, consequently when Exxon merged with Mobil and BP merged with Amoco. It has since been nearly twenty years that the layout of oil majors hasn’t been changed. If the deal is reached, Shell would become the second largest oil company. As oil majors seek to drive out costs following the rout in oil, Shell’s move might trigger more deals worldwide.
S.Z