Norway Oil Fund Supports Shell-BG Group Merger
Source: Dow Jones News
By Kjetil Malkenes Hovland
OSLO--Norway's sovereign-wealth fund, the world's biggest, said Wednesday that it would vote in favor of Royal Dutch Shell PLC's (RDSA.LN) takeover of BG Group PLC (BG.LN) later this month, as a substantial shareholder in both companies.
"Norges Bank Investment Management considers that the transaction accelerates value for BG Group PLC shareholders and is in the best long-term interest of Royal Dutch Shell PLC shareholders," the fund manager, a part of Norway's central bank, said in a statement.
The $789 billion Norwegian fund, formally named the Government Pension Fund Global, said it would support the merger at Shell's extraordinary shareholders meeting on Jan. 27, and at BG Group's shareholder meeting on Jan. 28.
"The combination of BG Group and Shell creates a world leader in deep-water and energy, and puts the company in a good position given the current environment with a low oil price," said a spokeswoman for the fund.
The fund held 2.02% of Shell and 5% of BG Group at the end of 2014, worth $4.33 billion and $2.30 billion, respectively.
At the Jan. 27 meeting of Shell's shareholders, the fund is set to "approve combination and authorize the Royal Dutch Shell PLC board to implement the combination, and authorize the Royal Dutch Shell PLC board to allot new Royal Dutch Shell PLC shares in connection with the combination," it said.
At the Jan. 28 meeting of BG Group's shareholders, the fund will "authorize the BG Group PLC board to implement the scheme of arrangement, and approve certain amendments to the articles of association of BG Group PLC required in connection with the combination," it said.
On Jan. 8, an influential advisory group recommended shareholders to approve Shell's takeover deal. Institutional Shareholder Services, which advises many of Shell's top shareholders, said there was credible evidence the Anglo-Dutch oil giant was paying a reasonable price for its smaller rival.
For Shell, the BG deal marks a bold move at a time of deep market uncertainty. Shell and its competitors have committed to deep spending cuts, lower costs and slash jobs. The company said on Wednesday its fourth-quarter profit dropped 50% on the year.
The Norwegian fund started last year to announce its voting intentions ahead of key meetings and decisions. It has previously announced support for proposals to ask BP PLC and Shell for more information on carbon risk, and to improve shareholder rights at AES Corp.
Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com
(END) Dow Jones Newswires
January 20, 2016 06:40 ET (11:40 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Source: Dow Jones News
By Kjetil Malkenes Hovland
OSLO--Norway's sovereign-wealth fund, the world's biggest, said Wednesday that it would vote in favor of Royal Dutch Shell PLC's (RDSA.LN) takeover of BG Group PLC (BG.LN) later this month, as a substantial shareholder in both companies.
"Norges Bank Investment Management considers that the transaction accelerates value for BG Group PLC shareholders and is in the best long-term interest of Royal Dutch Shell PLC shareholders," the fund manager, a part of Norway's central bank, said in a statement.
The $789 billion Norwegian fund, formally named the Government Pension Fund Global, said it would support the merger at Shell's extraordinary shareholders meeting on Jan. 27, and at BG Group's shareholder meeting on Jan. 28.
"The combination of BG Group and Shell creates a world leader in deep-water and energy, and puts the company in a good position given the current environment with a low oil price," said a spokeswoman for the fund.
The fund held 2.02% of Shell and 5% of BG Group at the end of 2014, worth $4.33 billion and $2.30 billion, respectively.
At the Jan. 27 meeting of Shell's shareholders, the fund is set to "approve combination and authorize the Royal Dutch Shell PLC board to implement the combination, and authorize the Royal Dutch Shell PLC board to allot new Royal Dutch Shell PLC shares in connection with the combination," it said.
At the Jan. 28 meeting of BG Group's shareholders, the fund will "authorize the BG Group PLC board to implement the scheme of arrangement, and approve certain amendments to the articles of association of BG Group PLC required in connection with the combination," it said.
On Jan. 8, an influential advisory group recommended shareholders to approve Shell's takeover deal. Institutional Shareholder Services, which advises many of Shell's top shareholders, said there was credible evidence the Anglo-Dutch oil giant was paying a reasonable price for its smaller rival.
For Shell, the BG deal marks a bold move at a time of deep market uncertainty. Shell and its competitors have committed to deep spending cuts, lower costs and slash jobs. The company said on Wednesday its fourth-quarter profit dropped 50% on the year.
The Norwegian fund started last year to announce its voting intentions ahead of key meetings and decisions. It has previously announced support for proposals to ask BP PLC and Shell for more information on carbon risk, and to improve shareholder rights at AES Corp.
Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com
(END) Dow Jones Newswires
January 20, 2016 06:40 ET (11:40 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
