Shell Plans to Complete BG Merger by Feb. 15, Cuts Spending Plan
LONDON, Dec 22 (Reuters) - Royal Dutch Shell said on Tuesday it planned to complete its proposed $53 billion takeover of BG Group by Feb. 15, outlining plans for further spending cuts next year in the face of low oil prices.
Shell also lowered the capital spending plan for next year for the combined group by $2 billion to $33 billion, saying it would bolster its ability to weather the industry's downturn and to maintain dividend payments.
Shell said the addition of the BG business, especially its offshore oil production in Brazil and liquified natural gas facilities in Australia, will offer $3.5 billion of cost savings and strengthen its ability to maintain dividends at $1.88 per share even as oil prices are expected to stage a slow recovery from 11-year lows.
"The Board is confident that the financials of the group will be further strengthened by this transaction," Shell Chairman Chad Holliday said in a statement.
"This should improve Shell's ability to cover both dividends and investments. The result will be a more competitive and stronger company, for both sets of shareholders, in today's volatile oil price world," he said.
Shell and BG both issued on Tuesday their prospectuses seeking approval of the deal by their shareholders at Shell's shareholder meeting on Jan. 27 and BG's meeting on Jan. 28.
The Anglo-Dutch company said it expected the acquisition to be completed by Feb. 15 and BG said its chief executive Helge Lund and chief financial officer Simon Lowth would both leave the company once the deal is concluded.
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