Shell gets EU clearance for BG Group takeover

The European Commission has given unconditional merger clearance to Royal Dutch Shell for its £47bn recommended cash and share offer for BG Group.

The EU 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.

Moreover, it said 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 in a statement: “The Commission found that after the transaction the merged entity's market share would remain limited in the exploration for oil and gas reserves, the liquefaction of LNG and the wholesale supply of LNG. Moreover, a number of strong competitors would remain active in these markets after the merger. The Commission concluded that the takeover would not allow Shell to influence prices and that these markets would remain competitive after the transaction.”

Shell said the approval is one of the five regulatory clearances that are pre-conditions to the combination and this is the second pre-condition to be satisfied, following the clearance obtained from the Brazilian competition authority, CADE, in July.

Other pre-conditional approvals are required from Australia and China and regulatory filings have been submitted for each of these approvals.

The proposed transaction will also require support from both BG Group and Shell shareholders.

Shell’s chief executive officer 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.”

At 1445 BST, Shell shares were up 0.1% at 1,648p and BG Group was 1.1% higher at 975.70p.