Shell-BG Deal Puts Pressure on Big Oil to Consolidate Again
Article by Javier Blas: 12:47 PM BST April 8, 2015 published byBloomberg.com
In the words of Royal Dutch Shell Plc’s boss, the fundamental logic behind his decision to buy BG Group Plc “always existed.”
What pushed the $70 billion deal over the finish line was that it had become “very compelling from a value perspective” after oil prices fell by half to $50 a barrel.
Ben van Beurden is unlikely to be alone among the chief executive officers of the world’s largest oil companies in thinking that valuations are looking very persuasive.
Just as the first deal between BP Plc and Amoco Corp. during a previous oil price slump in 1998 triggered a wave of deals, the Shell-BG merger is likely to push big oil to consolidate again.
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