ACCC approve Shell takeover of BG Group
AFTER months of uncertainty, the competition regulator Australian Competition and Consumer Commission has approved the massive Royal Dutch Shell - BG Group merger.
BG Group, the parent company of natural gas company QGC which has operations across the Surat Basin, confirmed today the ACCC had given unconditional merger clearance to Shell's recommended cash and share offer in a deal worth $US70 billion.
ACCC Chairman Rod Sims said the proposed acquisition would be unlikely to substantially lessen competition in the wholesale natural gas market in Queensland or eastern Australia.
The ACCC considered whether the proposed acquisition would reduce the supply of gas, or reduce competition to supply gas, to domestic customers by aligning Shell's interest in Arrow Energy with BG's LNG facilities in Queensland.
"The ACCC concluded that as Arrow is not currently focussed on supplying domestic customers, and appears unlikely to be so in the future, aligning Arrow with an LNG operator would not change competition for the supply of gas to domestic customers," Mr Sims said.
BG Group said the approval was one of five regulatory clearances which were pre-conditions to the combination and this is the third pre-condition to be satisfied, following the clearance obtained from the Brazilian competition authority in July and the European Commission, on September 2.
The two remaining pre-conditional approvals are from Australia's Foreign Investment Review Board and China's Ministry of Commerce.
The proposed transaction will also require support from both BG Group and Shell shareholders.
The pre-conditions and conditions to the combination are set out in the announcement of the proposed offer released in April.
Based on 2014 data, the combination will add 25% to Shell's proved oil and gas reserves and 20% to production and provide Shell with enhanced positions in competitive new oil and gas projects, particularly in Australia LNG and Brazil deep water.