Why Shell’s $73 Billion Merger Could be Cheating Dividend Investors
By Adam Galas: May 21, 2015
Royal Dutch Shell‘s (NYSE: RDS-A ) $73 billion buyout of BG Group(NASDAQOTH: BRGYY ) would be the second-largest oil merger in history, but long-term Shell investors should be asking whether the company overpaid. In examining the terms of the deal, and what Shell plans to do with BG’s assets, I think it becomes evident that some skepticism of this deal is warranted.
Terms of the dealBG stockholders will receive .4454 shares of Shell class B shares plus $5.94 per share in cash for each share of BG stock. The $73 billion price tag represents a 52% premium for BG Group, and if the deal is approved BG shareholders would own 19% of Shell when the merger is completed in 2016.
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