This proposal would value Shell Canada’s fully diluted minority share capital at approximately C$7.7 billion. Shell already owns a 78% stake in Shell Canada.

The proposed acquisition is a further step in Shell’s plan to simplify the group’s structure. Once Shell Canada is fully combined with the group, the business will benefit from a simplified organization, additional economies of scale and portfolio development, Shell believes.

Canada is an important growth area for Shell, and the company intends to be a major investor in the country for many years to come. Shell Canada has already built a substantial position in Canada’s oil sands and is embarking on a major expansion of production and upgrading capacity.

Shell has requested that Shell Canada’s board establish a special committee of independent directors to supervise the preparation of a formal independent valuation and to review and make a recommendation with respect to the proposed offer.

Shell’s formal offer, when made, will be conditional on more than 50% of the outstanding shares (calculated on a fully diluted basis) held by the minority shareholders of Shell Canada being tendered, as well as other customary conditions.