Energy majors Shell and BG Group have received the European Commission’s approval for a £47 billion (€63.9 billion) merger, but they still need Australian and Chinese approvals before they can finalize the deal.
The Commission said on Wednesday that the BG takeover would not give Shell any unfair advantages in the oil and gas exploration or liquefied natural gas (LNG) markets. “Moreover, the Commission found that Shell would be unable to shut out its competitors from access to its liquefaction facilities that supply LNG into the European Economic Area or from gas transportation and processing infrastructure in the North Sea,” it said.
The deal, announced in early April, would merge two of Europe’s, and the world’s, biggest energy producers and LNG exporters. But the Commission’s nod is just one of five that Shell and BG need before it all becomes final. The Brazilian competition authority CADE gave its approval in July, but Australia’s separate antitrust and foreign investment authorities and China’s antitrust authority have yet to weigh in.
Rumors of a BG takeover had been flying around for years, with BP also sizing up the company at one point. But it was the oil price slump that suddenly weakened the company, pushing it to accept an offer from its Anglo-Dutch rival.
A merged Shell and BG would become the largest private LNG company in the world, with an expected production capacity of 45 million tons by 2018 — which is 80 percent more than Shell’s capacity at the end of 2014. Global LNG production reached 246 million tons in 2014. The company would have LNG import and export facilities in the U.S., Trinidad and Tobago, Australia, Equatorial Guinea, Egypt, Nigeria, Russia and Southeast Asian countries.
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