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Shell-BG Deal Delayed

Shell-BG Deal DelayedShell-BG Deal Delayed

Australia's competition watchdog flagged concerns on Thursday that Royal Dutch Shell's proposed $70 billion takeover of BG Group may lessen gas supply competition in eastern Australia and delayed a final decision on the bid to November. The Australian Competition and Consumer Commission said a large number of market participants had expressed concerns that the proposed takeover may lead Shell's Arrow Energy to sell its gas into BG's Queensland Curtis liquefied natural gas plant for export, CNBC reported. "If the proposed acquisition resulted in less supply of gas to the domestic market, therefore this could substantially lessen competition to supply domestic gas users and lead to higher domestic prices and more restrictive contractual terms," ACCC Chairman Rod Sims said in a statement. The commission said it now planned to issue a final decision on Nov. 12. In response to the regulator's concern about gas sales by Arrow Energy, which is 50-50 owned by Shell and PetroChina, Shell said BG already had enough gas to meet all its commitments. The takeover has already been cleared by US and Brazilian anti-trust authorities. It still needs Australia's approval. Shell said it remained confident the deal would be completed in early 2016.

 

Financialtribune.com