Sector News

Shell-BG Deal faces further delay in Australia

October 23, 2015
News

Australia’s antitrust regulator has delayed a decision on Royal Dutch Shell PLC’s $70 billion takeover of BG Group by another week, extending a previous delay of around two months amid concerns over the impact the deal could have on the local gas market.

The Australian Competition and Consumer Commission said on its website Thursday that it now expects to make a decision on Nov. 19, and that the delay would give it “additional time to consider the proposed acquisition.”

In September, the regulator said it would delay a decision on the deal by about two months amid concerns raised by local businesses that Shell would curb local supply in favor of more lucrative exports to Asia through BG’s liquefied natural gas terminal on the east coast.

When Shell agreed to a deal with BG in April, it already owned the largest known undeveloped gas reserves in eastern Australia through a joint venture with PetroChina Co. Earlier this year that project dropped plans to build a new LNG plant and started looking for a way to supply rival plants, including BG’s Queensland Curtis LNG plant, which began operations at the end of last year.

The ACCC’s preliminary view published last month was that a Shell-BG combination would align Shell’s joint venture with PetroChina with the Queensland plant, giving Shell incentive to favor LNG exports over supplying gas to the domestic market. The potential reduction in gas volumes could substantially lessen competition and push up prices, the ACCC said.

“Shell is confident the transaction is good for the development of additional east coast gas supply, and that this will ultimately benefit Australian consumers,” the company said in an emailed statement, adding that it views the latest delay as “an indication of the thorough process being undertaken by the ACCC.”

The deal already has received regulatory approval from the European Union, the U.S. and Brazil, but still needs approvals from Australia and China to go ahead. Shell says the combination remains on track to complete in early 2016.

By Sarah Kent

Source: Wall Street Journal

comments closed

Related News

August 23, 2019

The higher purpose of being a CEO

Borderless Leadership

LinkedIn Twitter Xing EmailWhen I left my second large company experience to become President of a small manufacturing company I did so driven by ego; I fancied the title. Soon […]

August 23, 2019

As Brexit nears, Britain’s drugs, devices and pricing regulators seek the exit

Life sciences

LinkedIn Twitter Xing EmailFirm details on exactly how the U.K. will regulate new medicines is still to be decided after it leaves the EU later this year (caveats on timing […]

August 23, 2019

The Simply Good Foods Company acquires Quest Nutrition for $1bn

Consumer Packaged Goods

LinkedIn Twitter Xing EmailThe Simply Good Foods Company, the owner of Atkins-branded food products, has secured a deal to acquire protein snack maker Quest Nutrition for $1 billion. Quest, which […]

How can we help you?

We're easy to reach