Shell One Step Closer to BG Group Acquisition

The Australian Competition and Consumer Commission, or ACCC, has given its approval to the acquisition of BG Group by Royal Dutch Shell. Shell’s attempt to purchase BG Group for $70 billion has met with concerns from many Australians about the lack of competition that such a merger may create.

Despite these concerns, the ACCC put no conditions on the acquisition, stating that it could find no workable and enforceable method for fostering greater marketplace competition as it related to the union of the two companies. The ACCC acts as a watchdog group and is responsible for overseeing all major corporate mergers that take place in Australia. The commission’s approval was the latest step in Shell’s bid to acquire BG group and has been pending since mid-September.

The decision by the ACCC followed closely on the announcement of a planned pipeline that would increase the supply of natural gas to Queensland. The pipeline is widely seen as a balancing factor which will keep prices in Queensland from rising, despite diminished competition for customers.

Shell CEO Ben van Buerden called the ACCC’s approval of the acquisition a “major step forward” in the process of completing the deal. Mr. van Buerden also touted Shell’s decision as a sign of its confidence in the future of the Australian economy, which has been in a slump since the slowdown of the Chinese economy and the subsequent reduced demand for raw materials and commodities. The purchase of BG Group, if it proceeds according to schedule, is expected to be completed sometime early next year.