The mega merger £47 billion (US$72 bn) between oil giants Royal Dutch Shell and BG Group has cleared its biggest hurdle- passing European antitrust regulators.
The merger between the two oil and gas giants has been in the process of being examined by national regulators in the territories where the two companies currently operate, including Brazil, the US, Australia and the EU.
The deal has already passed the regulators of Brazil and the US earlier this year. Europe was seen by most as the toughest hurdle, however the EU saw no objection, with the EU commissioner for competition, Margrethe Vestager, stating the £47bn (US$72bn) acquisition “would not prevent fair competition in the oil market.’
The European regulator added, “The Commission concluded that the takeover would not lead to Shell benefiting from market power in a number of markets, namely oil and gas exploration, the liquefaction of gas and the wholesale supply of liquefied natural gas.”
The merger would make Shell one of the biggest oil and gas operators in the world, with a significant offshore oil and gas portfolio, across most of the world’s regions.
Shell is hoping the deal will put them on a more level playing field with US oil and gas giant ExxonMobil, currently the world’s biggest oil and gas company, with a value in excess of US$ 300 billion.
Royal Dutch Shell CEO, Ben van Beurden, said: “Receiving clearance from the European Commission underlines the good progress we are making on the deal. The transaction is on track for completion in early 2016. The recommended combination with BG is a springboard to change Shell into a simpler and more profitable company, making Shell more resilient in a world where oil prices could remain low for some time.”