Royal Dutch Shell has confirmed it is in advanced talks to buy UK energy supplier BG Group, in a £47 billion ($69 billion) cash-and-shares offer that highlights how the energy sector is being shaken up by ultra-low energy prices.
The move is designed to boost the British-Dutch group's growth in liquefied gas and deep water exploration, the company said in a statement released to the markets Wednesday.
BG Group has accepted and recommended the bid, whereby its investors will get of 383 pence and just under half a Shell B share, according to newswires.
If the deal goes ahead, BG Group shareholders will own around 19 percent of the combined group. Shell has announced that there is a £750 million cancellation fee if an agreement is not reached.
Oil prices have halved since the middle of 2014 due to a shale oil boom in the U.S. and a decision by Saudi Arabia not to cut production - creating an environment similar to the early 2000s when many super-mergers took place.