Royal Dutch Shell's £47bn swoop on BG Group is a classic piece of opportunism.
BG Group had been going through a torrid time even before the collapse in oil and gas prices and its new chief executive, Helge Lund, is only days into the job.
BG's share price, prior to news of this deal, was down by a fifth during the last year and, to that extent, BG was a sitting duck for a company that, on and off, has been linked with a bid for it for nearly two decades.
For Shell, there are plenty of attractions. BG's expertise in exploration is a key one: as analysts at the stockbroker Brewin Dolphin note, during six of the last seven years, BG has added more to its oil and gas reserves than it has extracted from them.
During the same period, on average, Shell has only replaced a quarter of the oil and gas it has extracted with new discoveries.
So, at a time when it is becoming more difficult and more costly to find new sources of oil and gas, acquiring BG will increase its proven reserves by a quarter and its production by a fifth, bringing Shell some highly prized and potentially lucrative assets.
These include BG's deep-water assets in Brazil, where the company has little presence and exploration assets in East Africa, where Shell has been conspicuously unsuccessful in finding oil and gas.
Acquiring BG will also bring significant liquefied natural gas assets, making Shell the world No1 in the field, while a further attraction is that many of these are in Australia – a rather more stable part of the world with a better legal system than many of the countries in which oil and gas majors have to operate – even though there will undoubtedly be questions from the competition authorities Down Under.
There will also be significant cost savings as a result of this transaction, which may be why Shell is so confident that the deal will boost its profits in 2017, only a year after the deal is due to be completed.
This will enable Shell to keep on paying its dividends, which account for £1 in every £8 paid out by British companies, a fact making the successful completion of this deal hugely important to the UK's pension funds and savers.
For BG Group, which has more than half a million small shareholders courtesy of its former status as part of the old British Gas, there may be some relief.
There was a feeling in the City that, while it owned some very attractive exploration assets, it lacked the financial firepower to convert them into production assets. There will be no such doubts once the muscle of Shell's much larger balance sheet is applied to them.
Many mergers and acquisitions end up destroying shareholder value yet, in the oil and gas sector, the really successful transactions – think of the way Lord Browne bulked up BP by buying Atlantic Richfield and Amoco at the end of the 1990s or Exxon's merger with Mobil in 1998 – have been done when crude prices are low.
This deal, then, can be seen as Shell placing a stupendous bet on a recovery in oil and gas prices.
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