Shell in £47bn bid to buy BG Group

Recent tumbling oil prices have encouraged petroleum giant Royal Dutch Shell PLC and BG Group PLC, Britain’s third largest energy company are “in advanced discussions” over a possible merger, in what could be one of the mega deals of 2015.

Their mega-fusion could produce a company with a combined market capitalisation of more than £200bn ($296bn; €274bn). Shell has until 5 May to make an offer. Back in February 2015, BG Group, wanted to write down the value of its oil and gas assets by nearly £6bn ($9bn) due to the oil price slump. Shell also announced in January 2015, that it would be cutting spending by nearly £10bn over the next three years. Shell’s £177bn market capitalisation dwarfs that of BG, which now stands at £31bn after a 20% fall in its share price over the last year.

If the deal goes through, then the new BG Group boss, Helge Lund, is in for a huge payout.

A purchase of BG would also give Shell access to the company’s highly prized offshore Brazilian oil assets, significant undeveloped gas resources in East Africa and a huge liquefied natural gas project in Australia that is ramping up this year.