The Shell-BG Group Tie-Up: Yes or No? Case Solution
This is just an excerpt. This case is about STRATEGY & EXECUTION
PUBLICATION DATE: October 04, 2016
In April 2015, Shell used to pay 0.4454 of its B shares and 383 cent in money for each BG share in an offer valued at $70 billion. Shell had to look for approval from at the very least 50% of its investors, and BG Group would need the support of 75% of its investors for the offer to go through. With fuel oil rates in the low $30s/bbl, the market was stressed that Shell's perspective of the future was overoptimistic. Shell leading execs required to create an organisation case to win investor assistance, which may turn into a case of overpromising and underdelivering to financiers. Trainees acquire an awareness of 3 evaluation strategies - reduced money circulations (DCF), net property worth (NAV) and market multiples - and of the level of sensitivity of the offer worth to modifications in forward oil rates.
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