Shell's $70bn takeover of BG Group cleared by Australia's competition watchdog
Shell's $70bn takeover of BG Group cleared by Australia's competition watchdog
Australia's competition watchdog has given the proposed Shell-BG deal the green light
Australia’s competition watchdog has
given Royal Dutch Shell the green light to proceed with its proposed
$70bn takeover of BG Group.
The acquisition, which would transform Shell into the world’s biggest
liquefied natural gas (LNG) trader, is unlikely to substantially lessen
competition, the Australian Competition and Consumer Commission (ACCC)
said.
The clearance is one
of five major hurdles Shell has to overcome in its quest to take over
BG. The FTSE 100 oil giant already received clearance from the Brazilian competition authority in July and the European Commission in September.
However, the deal still needs approval from China and from Australia’s
Foreign Review Board if it plans to go ahead with the merger in early
2016.
Ben van Beurden, chief executive of Shell, said the approval by the ACCC was “a major step forward for the deal”.
“The addition of BG’s integrated gas assets in Australia to Shell’s
global portfolio is one of the main strategic drivers behind the
recommended combination,” he said.
Shell boss Ben van Beurden said the approval is a major step forward for the deal.
Just two months ago the ACCC had raised concerns that the proposed takeover might
hurt gas supply competition in eastern Australia, particularly if
Shell’s Arrow Energy sold its gas into BG’s Queensland gas plant for
export as a result.
At the time, chairman of the Australian competition authority, Rod Sims, warned the merger could “lead to higher domestic prices” and “less competition to supply domestic gas users.”
However, in statement, Mr van Beurden said the Shell-BG combination “is a sign of Shell’s confidence in the Australian economy”.
“It’s also a springboard to change Shell into a simpler, more profitable and resilient company in a world where oil prices could remain low for some time,” he said.
Despite Mr van Beurden’s confidence that the deal will be completed by early next year, just last week fresh doubts about the proposed mega-merger surfaced after the Qatar Investment Authority offloaded around 43 million shares in BG.
Shares in Royal Dutch Shell have tumbled in recent months amid the dramatic slump in the oil price and concerns about the deal.
Shares in the oil major climbed 1.9pc to £16.72 following the announcement, while BG Group shares also ticked higher - up 1.8pc to £10.40.
Shell boss Ben van Beurden said the approval is a major step forward for the deal.At the time, chairman of the Australian competition authority, Rod Sims, warned the merger could “lead to higher domestic prices” and “less competition to supply domestic gas users.”
- Shell shareholders should think carefully about BG takeover
- BG Group profits drop as it nears merger with Shell
However, in statement, Mr van Beurden said the Shell-BG combination “is a sign of Shell’s confidence in the Australian economy”.
“It’s also a springboard to change Shell into a simpler, more profitable and resilient company in a world where oil prices could remain low for some time,” he said.
Despite Mr van Beurden’s confidence that the deal will be completed by early next year, just last week fresh doubts about the proposed mega-merger surfaced after the Qatar Investment Authority offloaded around 43 million shares in BG.
Shares in Royal Dutch Shell have tumbled in recent months amid the dramatic slump in the oil price and concerns about the deal.
Shares in the oil major climbed 1.9pc to £16.72 following the announcement, while BG Group shares also ticked higher - up 1.8pc to £10.40.
Post a Comment