By Dmitry Zhdannikov and Karolin Schaps
LONDON, April 7 (Reuters) - Sometimes it takes little morethan five people to put together a $70 billion oil mega-merger.
Shell's purchase of smaller rival BG, the thirdlargest oil and gas merger ever, was prompted by a phone call ona Sunday in the middle of March between Shell's ambitious andacquisitive CEO Ben Van Beurden and BG's veteran chairman AndrewGould.
Helping to make it happen were three bankers who haveadvised on some of the oil industry's biggest takeovers --Alastair Maxwell from Goldman Sachs, Julian Mylchreest from Bankof America Merrill Lynch and former Morgan Stanley star dealmaker Simon Robey, now with his own boutique firm Robey Warshaw.
That contrasts with smaller deals which would normallyrequire a small army of bankers and advisers on both sides. Italso shows that big mergers can be done at a lightning speed bysenior executives with big ambitions.
Less than two months ago, Goldman's Maxwell played down theprospect of mega-mergers as oil majors were more focused on costcutting and maintaining dividends.
By March, he was advising BG on the deal together with RobeyWarshaw. BAML is the sole adviser to Shell.
Explaining how the deal came together in under a month, VanBeurden said on Wednesday: "I called Andrew (Gould) up and wehad a very good and constructive discussion about the idea andit very quickly seemed to make sense to both of us".
That first call was made on March 15.
"What has happened in the last month, apart from it being alogical deal it has also become a very compelling deal from avalue perspective," Van Beurden said.
"NEW SHELL"
Both Van Beurden and Gould promised to turn companies aroundsince taking on their roles in 2014 and 2011 respectively.
The difference though is that for Van Beurden, 56, thepromise signalled a start of what will probably be a long haul.For Gould, 68, the deal with Shell is likely to be a final "BigBang" project before retirement, according to banking andindustry sources.
Gould worked as CEO of oil services giant Schlumberger in 2003-2011 and last year he hired Helge Lund as BG'sCEO from rival Statoil.
"The deal was Shell-driven. It was all about "New Shell" andthe repositioning of Shell," a source familiar with the dealsaid on condition of anonymity because he isn't allowed to speakpublicly to the press.
He said Shell first made an approach to BG and only at thatpoint did it contact advisers: "Unlike a merger of equals, thiswas not a slow dance... The issue wasn't who got what job, verymuch about the financial terms".
On Wednesday Gould said Lund will "probably move along"following the merger, expected to close in early 2016. Themerger could trigger payouts to Lund of as much as $47.8 millionfor his first year at BG.
SHELL CATCHES UP
BG with its huge and costly projects in Kazakhstan, Brazil,Australia and East African has been rumoured to be up for salefor over a decade with Shell and rival U.S. giant ExxonMobil being named as potential contenders.
The Shell-BG deal will create a company which by 2018 willproduce more oil and gas than Exxon, currently the world's toplisted oil company, according to analysts from Jefferies.
It also signals a possible return of a mega-mergers frenzyunseen since the turn of the century when an oil price crashtriggered a wave of deals in which BP bought Amoco andArco, Exxon bought Mobil and Chevron bought Texaco.
"Most mega-mergers of the early 2000s were done by veryambitious, relatively young and long-tenure CEOs," said a bankerfrom a major Wall Street bank not involved in the deal.
He said one of the reasons while the mega-mergers were notrepeated when oil prices crashed again in 2008 was a shortage ofsuch CEOs and a rapid oil price recovery that followed in 2009.
"Shell missed out on the late 1990s mega-merger wave due totheir complex shareholding structure," said Christian Stadler,of Warwick Business School, something that was resolved with areorganisation in 2005.
BAML's Mylchreest, who previously worked for Citibank, wasamong those advising Shell on its structure review over a decadeago.
Robey and Maxwell worked for the famous Morgan Stanley M&Ateam, which advised BP on its acquisitions of Amoco and Arco,deals that have helped to define the industry. (Additional reporting by Alexander Smith; Editing by KeithWeir)
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