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Standard Life Investment not happy with Shell-BG deal

Staff writer |
Standard Life Investment, a major investor in Royal Dutch Shell, has said it will oppose the oil company's proposed takeover of BG Group.

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Standard Life said a weak outlook for oil prices plus risks for BG in Brazil could make the deal "value destructive for Shell shareholders."

Shell announced its intention to buy BG - an oil and gas exploration company - in April 2015 for £47 billion. But Standard Life said on Friday that the risk of further oil price falls and tax and operational risks connected to BG's Brazilian assets make the deal undesirable.

"We have concluded that the proposed terms of the acquisition of BG are value destructive for Shell shareholders," said David Cumming, head of equities at Standard Life Investments.

The firm is the 11th largest holder of Shell's B shares, with a 1.7% stake. Standard Life is also the 16th biggest shareholder in BG, according to data from Bloomberg.

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