Shell, BG shareholders to vote on merger in January

BG Group said it sent a petition related to the merger to a high court in London.

Some of the largest shareholders in Royal Dutch Shell, the giant petroleum and energy group, are expected to publicly back the company’s $53bn (£35bn) takeover of BG amid concern the deal could be sabotaged by those who want it scrapped. The companies are expected to release documents today. The European Union antitrust regulators recently gave the nod for Royal Dutch Shell to buy BG Group, which will lead to the creation of one of the richest and biggest oil companies. Investors and analysts believe that the transaction is risky, considering how the crude environment is continuously deteriorating.

The Qatar Investment Authority and Henderson and Aberdeen Asset Management are also believed to be keen to support the deal.

Shell originally approached BG in April when the oil price stood at about US$55 a barrel.

Due to the drop in world oil prices, Shell said it was revising down its estimate for capital expenditure next year to $33 billion from the previous estimate of $35 billion. Three analysts have rated the stock with a sell rating, nine have issued a hold rating and seventeen have given a buy rating to the stock.

When the Anglo-Dutch energy company announced the deal, it was expecting oil prices to recover to $90 per barrel by the end of the decade.

Shell said the addition of the BG business, especially its offshore oil production in Brazil and liquefied 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. Macquarie reissued an outperform rating and set a GBX 1,900 ($28.28) price objective on shares of Royal Dutch Shell Plc in a report on Monday, December 7th. However, it is highly likely that shareholders of the companies will not vote in favor of the deal, if crude oil prices remain at low levels.