Integrating an acquisition at record speed
How Shell rapidly integrated Pavilion Energy into its treasury and ERP landscape, standardising processes and reducing risk across entities.
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The original article was published by Treasury Today at treasurytoday.com.
Shell Treasury Centre East (Pte) Ltd. is a Singapore‑based entity, founded in 2000, that manages treasury operations for the Shell group, including foreign exchange, funding and borrowings.
The challenge
On 18 June 2024, Shell announced an agreement to acquire Pavilion Energy from Carne Investments Pte. Ltd., a subsidiary of Temasek. The deal closed on 31 March, 2025. The Pavilion Energy group, headquartered in Singapore, comprises eight entities (seven in Singapore, one in Spain) and more than 100 employees.
Shell’s treasury played a central role throughout the acquisition process, particularly in the complex merger control filings. This acquisition is the first to be subjected to the EU Foreign Subsidies Regulation, requiring extensive data collection globally.
The nine-month timeline to deal completion heightened the risk of staff attrition, potentially leading to loss of corporate memory and business knowledge, prompting Shell to prioritise integration from day 1.
Shell evaluated the business model, reviewed key contracts and conducted detailed integration planning, involving multi‑disciplinary teams across Singapore, Europe and Shell’s global finance operations centres.
Shell’s treasury identified several key integration challenges:
- Treasury and finance processes (e.g. cash forecasting, tracking of credit support received and issued) were manual and relied heavily on Excel.
- There was no cash pooling structure. Movement of cash across entities was via inter-company loans and non-trade payable/receivable resulting in material intercompany balances.
- Two entities were funded via complex financing instruments.
The entities maintained a substantial number of financing facilities to support their large-scale business operations. Transitioning these to Shell facilities – at lower cost and without disrupting business continuity – was a significant undertaking.
These included:
- A large number of bank accounts.
- Bank facilities including revolving credit, overdraft, invoice financing and trade finance facilities.
- Parent corporate guarantees (PCGs) issued.
- Bank guarantees/Standby Letter of Credit/PCGs received from trade counterparties.
The solution
TThe integration of Pavilion Energy represents Shell’s fastest treasury and ERP integration to date. Just two months after deal completion, Shell’s Enterprise Resource Planning (ERP) system went live across three Pavilion Energy entities, seamlessly integrating LNG, Downstream LNG and shipping portfolios without disrupting operations. Shell’s treasury developed a comprehensive plan spanning pre and post deal completion.
The solution pre-engaged banks to secure dispensations on change of control clauses and financial covenants, preventing default/cross-default from day 1. Shell directors approved revised bank mandates, and the entities adopted Shell’s treasury policies and control framework on day 1.
Cash management processes transitioned to Shell’s cash banks, enabling full integration, automated ERP posting and cash pooling to Shell’s treasury, rationalised bank accounts and bank facilities, and extended short-term financing facility from Shell’s treasury. Commodities hedging transitioned from margin financing infrastructure with multiple banks to daily margining, supported by Shell’s liquidity. Pavilion Energy entities were onboarded onto the group’s guarantee facilities and trade finance limits were rationalised. A detailed engagement plan was mapped out, which included pairing each Pavilion Energy employee with a Shell “buddy.”
Shell’s cash management banks, Citibank N.A. and Standard Chartered Bank, played a pivotal role in prioritising know‑your‑customer processes and expediting the opening of bank accounts to support day‑one integration.
Best practice and innovation
The exceptional speed and quality of integration of Pavilion Energy set a new internal benchmark, with ERP deployed in just two months, without operational disruption or audit findings. The Shell and Pavilion Energy teams jointly delivered tangible financial and strategic value through significant cost savings, operational efficiencies and process standardisation across the treasury function. Reflecting on the integration, Shell noted:
The integration of Pavilion Energy into Shell is a landmark achievement, being the first major acquisition in the Asia Pacific region to be fully integrated into our systems, infrastructure and ways of working, within a very ambitious timeline.Teo Yian PingTreasurer – Asia Pacific, Shell
Key benefits
Cost Savings and efficiency
- Cost savings.
- Headcount savings.
- Process efficiencies.
Risk and control
- Increased automation.
- Manual intervention reduced.
- Improved visibility.
Infrastructure and connectivity
- Fewer banking partners and bank accounts.
- Increased system connectivity.
- Exceptional implementation (on time and on budget).
Ankur Kanwar, Global Head, Payment and Treasury Solutions, and Head of Transaction Banking, Singapore and ASEAN, Standard Chartered said that Shell’s acquisition of Pavilion Energy involved integrating eight entities (seven in Singapore and one in Spain).
As one of Shell’s primary partner banks, our role was crucial from the initiation of accounts to the complete integration,automation, consolidation and streamlining of financial and bank facilities.
Ankur KanwarGlobal Head, Payment & Treasury Solutions, & Head of TB SG & ASEAN
He also mentioned that these steps were vital in enhancing cost and operational efficiencies, harmonising processes and centrally managing risks, thereby optimally supporting Pavilion Energy’s treasury and operational needs. The outcome was a highly successful and exceptionally swift integration for Shell.
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