US regulators approve Royal Dutch Shell-BG Group $70 bn merger
17 June 2015
US regulators yesterday approved Royal Dutch Shell's proposed $70-billion acquisition of British rival BG Group.
The US Federal Trade Commission has cleared the deal, which still requires regulatory approval from the European Union, China, Australia and Brazil.
"We're well underway with the anti-trust and regulatory filing processes in relevant jurisdictions around the world and we're confident that, following the usual thorough and professional review by the relevant authorities, the deal will receive the necessary approvals," Shell CEO, Ben van Beurden, said in a statement.
A potential merger with BG would create a company with a market capitalisation of more than $296 billion (£200 billion) and annual revenues of $440 billion.
The combined company would overtake Chevron Corp as the world's second-largest oil and gas producer and close the gap with market leader Exxon Mobil.
A successful BG deal would be Shell's largest acquisition after its $7-billion purchase of the 22-per cent stake in Shell Canada that it did not already own.
The acquisition will add some 25 per cent to Shell's proven oil and gas reserves and 20 per cent to production, and provide it with an enhanced position in competitive new oil and gas projects, particularly in Australia LNG and Brazil deep water.
BG Group, Britain's third-largest energy company, was formed in 1997 after the break-up of UK's state-owned utility British Gas.
The Reading-based company operates in 24 countries across Africa, Asia, Australasia, Europe, North America and South America and produces around 680,000 barrels of oil equivalent per day.
It is the largest supplier of LNG to the US and will be the largest contracted supplier to China by 2017.
The London Stock Exchange-listed company posted revenues of $19 billion last year.
A potential deal would give Shell the offshore Brazilian oil blocks of BG Group as well as its undeveloped gas blocks in East Africa and its massive $24-billion Queensland
Curtis liquefied natural gas project in Australia.