Royal Dutch Shell (LON:RDSA) has inked a deal to sell its liquefied petroleum gas (LPG) business in Hong Kong and Macau to support services group DCC (LON:DCC), the Anglo-Dutch group has said. The move is part of the oil major’s efforts to offload $30 billion worth of assets in three years to shore up its balance sheet in the wake of the acquisition of BG Group.
Shell’s share price has jumped in today’s session, tracking oil prices higher. As of 08:18 BST, the shares were changing hands 1.33 percent higher at 2,127.50p, outperforming the benchmark FTSE 100 index which is currently 0.43 percent better off at 7,353.55 points. DCC’s share price meanwhile has rallied 2.42 percent to 7,190.00p.
Shell announced in a statement this morning that it had agreed a conditional sale of its LPG business in Hong Kong and Macau to DCC’s energy unit for a total enterprise value of $150.3 million. The oil major noted that it will be entering into a long-term brand license agreement with DCC Energy as part of the deal to ensure that the Shell brand remains visible across the business.
“This sale supports Shell’s strategic commitment to focus Downstream activities on areas where we can be most competitive,” John Abbott, Shell Downstream Director, said in the statement, adding that the sale marked another step in the group’s “ongoing portfolio optimisation strategy to deliver $30 billion of divestments between 2016 and 2018”.
In analyst news, Barclays remains bullish on Shell, having reiterated its ‘overweight’ stance on the group this week, valuing the shares at 2,750p. According to MarketBeat, the Anglo-Dutch oil giant currently has a consensus ‘buy’ rating, and an average price target of 2,323.19p.