Shell is buying BG for $70 billion, creating world's largest liquified natural gas company

Royal Dutch Shell is buying BG for $70 billion — (Image credit: Justin Sullivan/Getty Images)

On Wednesday, Royal Dutch Shell said it will buy BG Group for $69.6 billion in cash and stock, in the first major oil merger in a decade. The deal represents a 50 percent premium on BG shares, and while it won't rocket the Anglo-Dutch company past the world's biggest oil company, ExxonMobil, it will make Shell the world's top producer of liquified natural gas, according to Shell CEO Ben ban Buerden.

Specifically, BG will boost Shell's proved oil and gas reserves by 25 percent, and Shell will have access to BG's Santos Basin offshore oil fields in Brazil, plus natural gas assets in East Africa and Australia. Shell says it expects the deal to close in early 2016.

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Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.