Shell Buying BG Group in $69.7B Takeover Oil companies look to consolidate as oil prices slump By Newser Editors and Wire Services Posted Apr 8, 2015 3:03 AM CDT 2 comments Comments Royal Dutch Shell's CEO Ben Van Beurden speaks during a press conference to give detail on the group's 4th quarter 2013 results in London, Thursday, Jan. 30, 2014. (AP Photo/Alastair Grant) (Newser) – Royal Dutch Shell has agreed to buy British gas producer BG Group for $69.7 billion in cash and stock, the companies announced today. The move gives oil giant Shell a greater stake in natural gas markets in the wake of tumbling oil prices. A joint statement said the boards of both companies are recommending that shareholders approve the deal that will create a more competitive, stronger company for both sides amid today's volatile oil market. Shell said the takeover will add 25% to its proved oil and gas reserves and 20% to production compared with 2014, and boost its position in new oil and gas projects in Australia and Brazil. Shell said that bringing the two companies together would produce financial gains of about $2.5 billion a year. The terms of the offer would result in BG shareholders owning about 19% of the new combined business. "Bold, strategic moves shape our industry," Shell CEO Ben van Beurden said. "BG and Shell are a great fit. This transaction fits with our strategy and our read on the industry landscape around us." BG's CEO Helge Lund said his company also would benefit from the takeover. "BG's deep water positions and strengths in exploration, liquefaction, and LNG shipping and marketing will combine well with Shell's scale, development expertise, and financial strength," he said. Two brief takeaways: The Wall Street Journal notes the move will "enable the two European energy giants to eliminate overlapping costs to help compensate for the toll that lower oil prices have taken on their top lines." "In a call with reporters (today), Mr. van Beurden said that the current period of low oil prices was analagous to the doldrums of the late 1990s, when industry executives like John Browne of BP initiated a wave of mergers," the New York Times notes.