Shell Lifts BG Merger Savings Estimate By 40%

Royal Dutch Shell PLC said on Tuesday it expected synergies from its planned $70 billion takeover of BG Group PLC to be 40% higher than previously announced. The oil major said the level of pre-tax synergies now is forecast to be around $3.5 billion, up from the $2.5 billion expected before. The increase stems from a doubling of expected operating cost savings from $1 billion to $2 billion. Given the higher level of synergies, the mega-merger is estimated to work even with Brent oil prices trading around $60 a barrel, Shell said. The BG deal is on track to go through in early 2016, according to the company. BG shares were up 1.5% in London, while Shell rose 0.9%.