EU Approves Shell's Takeover of BG Group -- Update
03 September 2015 - 12:09AM
Dow Jones News
By Tom Fairless and Ian Walker
BRUSSELS--Oil giant Royal Dutch Shell PLC cleared a significant
hurdle toward its planned takeover of U.K.-based oil and gas firm
BG Group PLC on Wednesday, after Europe's highest antitrust
regulator approved the deal unconditionally.
The two companies agreed the $70 billion cash and share deal in
April in the latest sign of how tumbling energy prices are shaking
up the global oil-and-gas industry.
The European Commission, the European Union's top competition
authority, concluded after a brief investigation that the deal
wouldn't allow Shell to influence the prices of oil and natural gas
in Europe and that those markets would remain competitive.
The EU's decision keeps the companies on track to close their
merger in early 2016 said Shell's Chief Executive, Ben van Beurden.
Shareholders still need to vote on the deal and are expected to
receive formal documents late 2015 or early 2016.
In a statement, Mr. van Beurden said the transaction was "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."
The green light from Brussels is the second of five
preconditions that Shell has said it needs to close the deal. The
first, from Brazil's competition authority, came in July. Approvals
from China's competition authority, and from Australia's antitrust
and foreign investment regulators, are still outstanding. U.S.
antitrust authorities also approved the deal in June.
"Receiving clearance from the European Commission underlines the
good progress we are making on the deal," Mr. van Beurden said.
In a statement, the EU said it had focused its investigation on
three broad markets where the two companies' operations
overlap--the exploration for oil and gas reserves, the supply of
natural gas and the liquefaction and supply of liquefied natural
gas.
The regulator concluded that Shell's market share would "remain
limited, " and competition strong, in oil and gas exploration and
the liquefaction and wholesale supply of liquefied natural gas. It
also found that the two companies would be unlikely to hinder
competitors from accessing Shell's gas liquefaction facilities
supplying Europe, or its natural gas transportation and processing
infrastructure in the North Sea.
"This is mainly because significant additional liquefaction
capacity is being built and will come onstream in the near future,
while significant spare oil and gas transport and processing
capacity exists in the North Sea region," the commission said.
The combined group is expected to make substantial disposals of
noncore operations following completion of the deal, the companies
said at the time. Subject to achieving what the Shell board
considers to be reasonable value for such operations, Shell expects
these disposals to reach $30 billion during 2016 to 2018.
Write to Tom Fairless at tom.fairless@wsj.com and Ian Walker at
ian.walker@wsj.com
Access Investor Kit for "BG Group Plc"
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB0008762899
Access Investor Kit for "Royal Dutch Shell PLC"
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB00B03MLX29
Access Investor Kit for "Royal Dutch Shell PLC"
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB00B03MM408
Access Investor Kit for "BG Group Plc"
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0554342032
Access Investor Kit for "Royal Dutch Shell PLC"
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US7802591070
Access Investor Kit for "Royal Dutch Shell PLC"
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US7802592060
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 02, 2015 09:54 ET (13:54 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
Shell (LSE:SHEL)
Historical Stock Chart
From Apr 2024 to May 2024
Shell (LSE:SHEL)
Historical Stock Chart
From May 2023 to May 2024