Royal Dutch Shell to make 2,800 redundant as £47bn BG merger clears final hurdle as Chinese authorities give go-ahead

 
Catherine Neilan
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The merger should now be complete early next year (Source: Getty)

Oil giant Royal Dutch Shell is to make 2,800 jobs redundant globally as part of its £47bn mega-merger with BG, equivalent to three per cent of its total workforce.

The jobs will be shed as part of a major restructure that will see BG's business rolled into Shell's when the two companies merge next yaer.

This is "required to achieve the expected benefits of the recommended combination, including previously disclosed and reported-on pre-tax synergies of $3.5bn," Shell said today.

"Office consolidation will be undertaken where practical in certain locations around the world," the oil giant said. "With regards to office footprint rationalisation in the UK, Shell will, following deal completion, undertake a comprehensive review during the course of 2016."

The update follows an announcement by the two conglomerates this morning that the Chinese ministry of commerce (Mofcom) had given the deal the go-ahead.

This follows approval given by authorities in Brazil, the EU and Australia, meaning the deal can take place. The two companies said they now hoped the merger would be completed in early 2016, subject to shareholder approval.

Shell chief executive Ben van Beurden said: "We’re grateful to Mofcom for its thorough and professional review of the recommended combination, and 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."

BG Group's chief executive Helge Lund added: "Following today's approval from Mofcom, all pre-conditional regulatory approvals for the combination have been received and we now move to the next phase. I am pleased that we have continued to deliver a strong operating and safety performance throughout the offer period which is a credit to our teams across the business.

"The proposed combination has strong industrial logic, particularly in deep water production and LNG, and will accelerate the delivery of value to our shareholders."

The deal was first announced in April this year, with Shell offering to pay a premium of around 50 per cent on BG's share price at the time. The stock jumped more than 26 per cent on the news.

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