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Energy

Shell presses ahead with BG tie-up despite oil fears

Shell is going to London's High Court for consent to hold shareholder meetings to approve the deal

Royal Dutch Shell (LON:RDSB) is pressing ahead with its £55bn merger with Britain's BG Group (LON:BG.) despite investor concerns about falling oil prices.

Shell said on Monday that it was going to the High Court in London for consent to hold shareholder meetings to approve the deal.

Last week, the two companies received the go-ahead from Chinese competition regulators.

That marked the final pre-conditional approval needed following the green light from Brazil, the EU and Australia, but fresh doubts have emerged about whether shareholders will approve the merger, with some becoming increasingly jittery following the plunge in oil prices during the last year.

On Monday, prices fell further with a barrel of Brent crude dropping 1.7% to US$36.3 and a barrel of US light crude dipping 0.9% to US$35.7.

Standard Life Investments (LON:SL.) last week said the deal no longer made financial sense at current oil price levels.

Shell originally approached BG in April when the oil price stood at about US$55 a barrel.

A major shareholder in BG, Capital Group, reportedly sold about £100mln of shares in BG in the last week.

But Shell said on Monday that it expected meetings of investors in both companies to approve the tie-up to take place on January 27 and 28, 2016, respectively.

"A further announcement will be made in due course," Shell said.

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