Another Shell shareholder has thrown its weight behind the oil giant's takeover of BG.
Oil prices have nearly halved since Shell made the £47bn bid for BG in April, subjecting the deal to increased scrutiny. One shareholder subsequently warned the deal no longer makes sense with the oil price so low.
But Chris Wheaton, an oil analyst at Allianz Global Investors, today said it's supporting Shell’s takeover of BG.
"The deal puts more of shareholders’ capital to work in LNG and Deepwater, the two businesses within Shell where return on capital and free cash generation are highest; they are where Shell has its biggest and most sustainable competitive advantages."
AllianzGI joins many of the two companies' big shareholders which have said that they back the mega-deal.
Shell shareholders are set to cast their votes on the deal on Wednesday, followed by BG investors the next day. The acquisition is widely expected to go through, needing 50 per cent approval from Shell shareholders and 75 per cent from BG respectively.
"However, we’ve also made it clear to Shell’s management that the acquisition of BG must be a springboard for change within the company," Wheaton added.
"The group needs to become quicker to react, simpler, more efficient, and more focused on cash generation for shareholders to cope with the brutal reality of a more volatile and lower oil price than the world has seen over the last decade.”
Shell's preliminary results showed it expects a near halving in profits in the last three months of 2015, following the further slide in oil prices.