Why Shell Is Acquiring The BG Group? CEO Explains

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Royal Dutch Shell plc (ADR)RDS and BG Group plc (ADR)BRGYY announced today that the former has agreed to acquire the latter for $70 billion. Royal Dutch Shell CEO Ben van Beurden was on CNBC Wednesday to explain why the company is acquiring BG Group.

 

Bringing New Things To The Party

 

"This is as much about gas than it is about oil, as a matter of fact probably even a little bit more about gas," Beurden said. "So, if you look at BG's portfolio very, very strong portfolio in areas where indeed you also have some strength, but that brings new thing to the party as well particularly in places like Australia, in places like the Atlantic basin, in the U.S."

 

Driving Value

 

He continued, "So, what we will see is by combining these two portfolios we are not only going to have a much stronger basis in terms of supply points and demand points in integrated gas and LNG, we are going to have really scale in the portfolio and it is this scale that brings optionality and that's what drives value in the integrated gas business."

 

Creating A Great Company

 

"We are very, very good at that, BG is pretty good at that as well. So, bring it together will really create a great company when it comes to integrated gas and we have done this before on a slightly smaller scale of course when we integrated the Repsol's assets in our LNG portfolio last year," Beurden concluded.

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Posted In: CNBCMedia
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