Royal Dutch Shell confirms plans to shed more jobs as its proposed £47bn takeover of BG clears its final competition hurdle.
Royal Dutch Shell has confirmed plans for 2,800 more job losses, on top of 7,500 previously announced, should its takeover of BG Group proceed.
The oil giant made the announcement after the proposed £47bn bid cleared its final regulatory hurdle when the Chinese authorities offered no objections.
The deal, which will give Shell greater access to the market for cleaner liquefied natural gas (LNG) as the World moves to combat climate change had already been approved by other world regulatory bodies.
China’s decision means that shareholders in both companies can now proceed with votes early next year as planned.
However, the collapse in oil prices has further reduced, for BG shareholders, the value of the share element of the cash and stock offer.
Shell said in a statement that it expected the additional job losses would be achieved worldwide to meet “the expected benefits of the recommended combination, including previously disclosed and reported-on pre-tax synergies of $3.5bn (£2.3bn)”.
Its move was a reflection of the continuing decline in the value of commodities, with Brent crude oil currently trading above $37 (£24) a barrel.
A spokesperson added: “The recommended combination remains on track for completion in early-2016 and our focus is on completing the transaction as quickly as possible and then delivering a world-class integration.
“The structure of the transaction, including the equity component, means that both sets of shareholders share the benefits of the combination in any expected oil price environment.
“The combination enhances Shell’s dividend potential in any expected oil price environment.”
It had earlier welcomed the regulatory decision by China.
Shell chief executive Ben van Beurden said: “I am delighted we now have all the pre-conditional approvals needed to move to the next important phase.
“This is a strategic deal that will make Shell a more profitable and resilient company in a world where oil and gas prices could remain lower for some time.”
Shell, along with its rivals in the commodities sector, has suffered from the economic slowdown in emerging markets, especially China.
It has coincided with a boom in US shale oil production which has flooded the market at a time of weak demand.
Shell slumped loss of $6.1bn (£4bn) in its third quarter, after taking a $8.2bn (£5.4bn) hit from ditching long-term projects and the impact of lower oil and gas prices.
Source: SKY NEWS