By Ron Bousso, Karolin Schaps and Sinead Cruise
LONDON (Reuters) - Royal Dutch Shell's takeover of BG Group may look less attractive after the slide in oil prices but the fact the same investors own nearly half of both firms means the deal is still likely to go through.
Investors holding about 43 percent of Shell's shares also hold 53 percent of BG, according to Reuters data. For example, Blackrock, Franklin Mutual Advisers and Norges together hold more than 12 percent of Shell and nearly 7.5 percent of BG.
Investors will be voting separately on the deal at meetings expected next month after the takeover received its final regulatory seal from China this week and a rejection of the takeover could entail losses all round, making it more painful for those with shares in both companies.
BG shares would likely collapse, while Shell would lose a rare opportunity to increase its production base over the next few decades by snapping up a smaller company with some key assets, investors and analysts say.
"I think the vote will be positive for the deal," said Niels Lammerts van Bueren, portfolio manager at Dutch arbitrage fund TRZ Funds that trades shares in both companies. "Indeed, with the cross-holdings very few holders will be voting against as that will cost them money."
Few investors and analysts have challenged the strategic sense of a merger that will make Shell the world's top liquefied natural gas (LNG) trader and a key player in Brazil's rapidly developing offshore oil production.
But the 30 percent slump in oil prices to below $40 a barrel since the takeover was announced in April has left investors worrying about whether Shell will be able to maintain its dividend if the $54 billion takeover goes through.
Shell's acquisition of BG is largely based on the assumption that oil prices will rise over time to cover the relatively high costs of production in areas such as Australia and Brazil.
The deal, which offered a 50 percent premium to BG's April 7 share price and was worth $70 billion then, includes a cash payment which Shell plans to cover by increasing its debt.
Like its rivals, Shell slashed its 2015 spending by about 20 percent, cut thousands of jobs, delayed or scrapped huge projects and increased borrowing in the face of the oil price slump, but maintained its dividend payouts.
The Anglo-Dutch company has announced further cost savings and job cuts for when the deal is completed, which it said would allow it to cope with a low oil price environment.
Still, while investor concerns remain, and Shell shares have trailed in rivals including Exxon Mobil and BP in recent months, the chances of an investor revolt are slim, according to analysts and investors.
To pass, a majority of voting BG shareholders, who also represent at least 75 percent of the outstanding shares, must approve the deal. For Shell, it requires a majority.
"I still think there is good industrial logic for the two companies to be put together and the potential synergies may well be even more valuable in the current tough environment for oil companies," said Richard Marwood, senior investment manager at AXA Investment Managers, which owns Shell and BG stock.
Shell Chief Executive Officer Ben van Beurden and Chief Financial Officer Simon Henry have held numerous meetings this year with investors around the world to bolster support.
"Shell have played their hand and need to close. The last thing they want is for BG to end up back on the market at a lower price that will lead to other suitors asking for a dance," said Robin Milway, Portfolio Manager, New Capital Global Equity Conviction Fund at EFG Asset Management, which owns both stocks.
The takeover has more impetus following last week's climate deal in Paris as it is expected to boost demand for less polluting natural gas, said Richard Hulf, manager of Artemis Global Energy Fund, an investor in Shell and BG.
"The other key part of the deal is phenomenal growth in Brazilian production. The timing is impeccable. Add to that the fall of Petrobras and you have even more of the world's best upstream assets falling into Shell's lap."
"It's all good," Hulf said.
(Editing by David Clarke)