Shell clears last hurdle for BG Group merger

THE HAGUE, Netherlands, Dec. 14 (UPI) -- After clearing the last regulatory hurdle, Royal Dutch Shell said its planned merger with BG Group will require restructuring and a reduction in head counts.

The Chinese Ministry of Commerce cleared the planned merger between the two energy companies, paving the way for the largest integration of its kind since Exxon and Mobil merged in the late 1990s.

"Following previously announced approvals in Brazil, the European Union and Australia, [Chinese] clearance marks the final pre-conditional approval required for the combination," the company said in a statement.

With the last step in the approval process completed, BG Group Chief Executive Helge Lund said integration would result in a stronger industry footprint.

"The proposed combination has strong industrial logic, particularly in deep water production and LNG, and will accelerate the delivery of value to our shareholders," he said in a statement.

Both companies expect the $70 billion merger will be completed in early 2016. In a separate statement Monday, Shell said it expects some restructuring will be required as a result of the merger

"Shell currently expects an overall potential reduction of approximately 2,800 roles globally across the combined group, or approximately 3 percent of the total combined group workforce," the company said. "These reductions are in addition to the previously announced plans to reduce Shell's headcount and contractor positions by 7,500 globally."

When reporting financial results earlier this year, both companies said the weakness in energy markets should last at least through the middle of 2016.

Shell said changes are still subject to engagement with employees potentially affected by the deal.

"Further detailed work will be undertaken on the details of the proposed operational and administrative restructuring as part of ongoing integration planning," it said.