Shell has cleared its first hurdle in order to progress its takeover of BG Group, the supermajor announced on 16 June. Shell received an early termination of the US antitrust waiting period from the US Federal Trade Commission. The company said it remains on track to complete the merger by early 2016.
“Securing early termination of the US antitrust waiting period from the FTC at this early stage is a clear demonstration of the good progress we’re making on the deal,” said Shell CEO Ben van Beurden. “We’re well underway with the antitrust 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.”
In April, Shell made a US$70 billion cash and share offer for UK-headquartered deepwater and LNG-focused BG Group. Analyst firm GlobalData called the merger, "the largest mega deal since Exxon and Mobil merged in 1998."
The proposed deal requires review and approval by relevant antitrust and regulatory authorities, and support from both sets of shareholders. It will add some 25% to Shell’s proven oil and gas reserves and 20% to production, including LNG and deepwater assets in Brazil and Australia, and enable an increase in asset sales to $30 billion by 2016-18.
Analyst firm Simmons & Co. said at the time that the deal made "immense strategic sense" for Shell. "If one takes a long-term view on LNG markets and commodity prices, the acquisition will create an LNG behemoth with unmatched scale and flexibility. The combined group’s equity LNG capacity is expected to reach 45 MTPA by 2018 vs. Shell’s current capacity of 26 MTPA in 2014 (an increase of 78%)," Simmons & Co. said.
Image: Shell CEO Ben van Beurden
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