Royal Dutch Shell Plc said it agreed a 3.025 billion pound ($4.53 billion) loan from its financial adviser Bank of America Corp. to help fund its purchase of BG Group Plc.
Shell entered into an 18-month bridge loan with Bank of America to help finance the cash portion of the deal, according to a statement on its website. The financing, which can be extended by six months, will pay an initial interest margin of 0.15 percentage point a year for the first three months, according to the statement. The rate will rise by 0.2 percentage point every three months to a margin of 1.55 percentage points after 21 months, the statement shows.
Shell agreed to buy smaller rival BG Group for $70 billion in cash and shares in the oil and gas industry’s biggest deal in at least a decade. Shell will pay 383 pence in cash and 0.4454 of Shell’s B shares for each BG share, the companies said Wednesday. That’s equal to about 1,367 pence a share, valuing BG at about 47 billion pounds.
The merged company, led by Shell Chief Executive Officer Ben van Beurden, will attain a market value twice the size of BP Plc and surpass Chevron Corp.