The proposed US$70 billion mega merger between oil and gas super major Shell and BG Group, has been given the green light from Australia’s competition regulators.
To go through, the deal has to pass six different regulatory bodies, one from the European Union; Brazil; the US; China; and two from Australia.
With todays announcement, the deal has cleared four: EU; Brazil; US and Australia’s competition regulator, edging the deal closer to realisation.
The merger’s latest hurdle, the Australian Competition and Consumer Commission (ACCC), was asked to see if it could find any issues with reduced competition in Australia’s domestic LNG market connected with the deal.
Some companies within Eastern Australia, had made complaints to the regulator that the deal would force up the price of LNG on the wholesale market, however, the regulator said they could find no grounds for this stating:
“The ACCC’s view is that the proposed acquisition would be unlikely to substantially lessen competition in the wholesale natural gas market, in either Queensland or eastern Australia more broadly,”
Shell CEO Ben van Beurden said: ”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, making ACCC approval a major step forward for the deal,”
The oil and gas super major was looking to complete the US$70 billon merger during the first half of 2016, making it the world’s biggest LNG producer.
However all sides now wait with baited breath for approval from the last two hurdles- Australia’s Foreign Investment Review Board and China’s Ministry of Commerce.Last updated on 11:38AM - 23/11/15