In April 2015, Shell offered to pay 0.4454 of its B shares and 383 pence in cash for each BG share in a deal valued at $70 billion. The offer entailed a sizable 50%-plus premium for the BG Group by assuming a $90/bbl forward oil price. Shell had to seek approval from at least 50% of its shareholders, and BG Group would require the backing of 75% of its shareholders for the deal to go through. On January 8, 2016, Standard Life, a major shareholder in both Royal Dutch Shell plc and BG Group, announced that it would vote No to a merger between Shell and BG at a Shell shareholder meeting to be held on January 27, stating that "the proposed terms of the acquisition of BG are value-destructive for Shell shareholders." However, the same investor would vote Yes at a BG shareholder meeting on January 28. A volatile oil market further complicated the M&A decision. With oil prices in the low $30s/bbl, the market was worried that Shell's view of the future was overoptimistic. Shell top executives needed to make a business case to win shareholder support, which might turn into a case of overpromising and underdelivering to investors. Learning objective: The case offers an opportunity to study the pros and cons of a deal on both sides, as well as to evaluate the strategic benefits and the price tag. Students gain an understanding of three valuation techniques - discounted cash flows (DCF), net asset value (NAV) and market multiples - and of the sensitivity of the deal value to changes in forward oil prices. The incomplete and uncertain nature of firm valuation is revealed and the reality that financial analysis often depends on many assumptions.

This case was developed to record corporate governance reform at ICBC within the context of China's banking reform. It describes the evolution of governance in China, the challenges faced by leaders at all levels, the choices made and the results of these hard decisions. The challenges and discussion are relevant to Western companies in terms of understanding the corporate governance structure adopted by large Chinese enterprises. The success of the bank and its unique governance structure bring much inspiration from East to West. Learning objectives: Participants can explore the different issues behind ICBC's governance reform. At undergraduate level in a political economy program, students can discuss the strategies involved in transforming from a centrally planned economy to a free market economy and the systematic design required to make any reform work. In MBA programs, participants can discuss issues related to corporate restructuring, governance structure, IPOs, as well as competitive strategy. At executive and board level, participants can focus on the banking governance structure and the pros and cons of the ICBC system. By the end of the class discussion, participants should have gained an insight into working with large Chinese companies. They should be able to grasp the problems arising from conflicts of interest among shareholders, directors, supervisors, the management team, strategic investors, the communist party and regulators. They should also understand the inner workings of these stakeholders, in particular the incentives of each stakeholder group, which differ greatly from those in the West. Participants will realize how corporate governance could be managed differently and how complex it could become. The discussions offer participants the opportunity to reflect on governance practices in the West and borrow elements that could be useful.