Shell/BG merger boosted by news Brazil will not increase tax levy
The prospects of Anglo-Dutch oil group Royal Dutch Shell (LON:RDS)’s proposed acquisition of smaller rival BG Group (LON:BG) have been bolstered by the news that a tax hike feared in Brazil will now not happen, The Mail on Sunday reported. The National Energy Policy Council in Brazil is to say this week that it has no plans to alter its system for calculating gas and oil royalties, the unsourced report said; a change had been under consideration which could have led to bigger tax bills for oil companies which operate in the country, the item explained.
Some shareholders have opposed Shell’s planned GBP 36bn (USD 51bn) deal with BG amid fears of the increased tax bill in Brazil, the report said.
Shell shareholders are to vote on the deal on Wednesday 27 January, while BG’s investors will vote the following day, the report noted. According to City sources cited in a Sunday Times report, sufficient numbers of shareholders have signalled they plan to vote for the deal that it is now almost a certainty the merger will go ahead.
Mail on Sunday, Sunday Times