LONDON, Jan. 28 (UPI) -- All but a small fraction of 1 percent of the shareholders in BG Group voted in favor of the tie-up with Royal Dutch Shell, the company said Thursday.
Shareholders convened in London, meeting well past midday to consider the terms of the agreement. BG Group announced that, at the meeting's conclusion, 99.53 percent of the shareholders gave their consent to the deal.
Speculation over the possibility of the merger emerged in December when The Daily Telegraph in London suggested some shareholders may be wary of the deal. The Telegraph reported investment firm Capital Group unloaded about $150 million worth of shares in BG Group. The divestment came one week after other investors said the deal doesn't make sense, given the steep drop in crude oil prices.
Crude oil prices are off about 2.5 percent since that report was published, though big declines last week means Brent, the global benchmark price, is down about 8 percent for the year.
The $7 billion combination will be one of the largest mergers of its kind since Exxon and Mobil joined in the 1990s. More than 80 percent of the shareholders in Shell voted Wednesday in favor of the deal.
Shell CEO Ben Van Buerden said it the time the positive vote from his shareholders reflected the "strategic logic" of the combination. Reflecting on the BG vote Thursday, the CEO said the tie-up made the combined entity better positioned in the current market.
"BG adds attractive deep water and integrated gas positions and will act as a catalyst for accelerating the re-shaping of our business," he said in a statement.
Shell said combining with BG Group would mark the start of a new chapter for the company. Costs will move lower by about $4 billion for 2016, but also result in widespread redundancies. About 10,000 staff and director contractor positions will be eliminated across both companies.
For the combined group, Shell in a prospectus last year said capital investments for 2016 would be around $33 billion, lower than previously forecast by $2 billion, or 5.7 percent.
Analysis emailed from consultant group Wood Mackenzie said the deal offers some advantages, but challenges remain in the weak oil economy.
"Shell has outlined a post-BG strategy of 'grow to simplify', but it will not be plain sailing and a 'lower for longer' oil price scenario has added to the challenges Shell faces," its research note read.
If approved, the transaction would be finalized Feb. 15.