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Royal Dutch Shell plc Confirms Deal With Morgan Stanley: Shares Up 2%

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By: MICHEAL KAUFMANJul 11, 2015

Royal Dutch Shell plc (NYSE:RDS.A) plans to establish a strong footing in the natural gas sector. In April 2015, the company finalized its $70-billion deal with BG Group plc (OTCMKTS:BRGYY). If approved by the regulatory authorities, the merger will give Shell access to BG Group’s valuable assets in Brazil and several other countries.

According to Reuters, Shell has purchased the European gas and power trading book from Morgan Stanley (NYSE:MS). The acquisition is expected to help the company achieve a strong footing in gas industry. In addition to the BG deal, the company is also colluding with Russia’s Gazprom OAO (OTCMKTS:OGZPY). Currently, Gazprom is considered the world’s top gas producer.

Reuters reported that on Friday, Shell signed a binding sales and purchase agreement for Morgan Stanley’s portfolio. In regard to the issue, Shell said: “Comprising predominantly physical and financial gas and power trades, the deal further expands Shell’s activities in core energy markets across Europe.”

Morgan Stanley aims to slowly move out of the gas sector. The financial holding company faces several problems, such as regulations to limit banks’ proprietary trading in oils and metals markets. Recently, it also suffered from the sanctions imposed on Russia by the West, and was forced to sell its oil trading business to Castleton. The sanctions caused the deal between Morgan Stanley and Russia’s Rosneft Oil Co. (OTCMKTS:RNFTF) to collapse.

Shell shares closed 2.56% on Friday at $56.84, while Morgan Stanley shares were up 1.42% at $38.64.

SOURCE

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