The FINANCIAL — The transaction was cleared as it will not grant Shell market power in oil and gas exploration, LNG liquefaction or LNG wholesale supply. Shell will also not be able to prevent competitors from using its gas infrastructure in the North Sea.
The European Commission has approved under the EU Merger Regulation the acquisition of BG Group by Royal Dutch Shell. The Commission concluded that the takeover would not lead to Shell benefiting from market power in a number of markets, namely oil and gas exploration, the liquefaction of gas and the wholesale supply of liquefied natural gas (LNG). Moreover, the Commission found that Shell would be unable to shut out its competitors from access to its liquefaction facilities that supply LNG into the European Economic Area (EEA) or from gas transportation and processing infrastructure in the North Sea.
The Commission focussed its investigation on the markets where the activities of Shell and BG Group overlap, namely in the exploration for oil and gas reserves, the supply of natural gas and the liquefaction and supply of LNG.
The Commission found that after the transaction the merged entity’s market share would remain limited in the exploration for oil and gas reserves, the liquefaction of LNG and the wholesale supply of LNG. Moreover, a number of strong competitors would remain active in these markets after the merger. The Commission concluded that the takeover would not allow Shell to influence prices and that these markets would remain competitive after the transaction, according to the European Commission.
Moreover, the Commission found that Shell and BG Group would be unlikely to prevent competitors from accessing some of Shell’s LNG liquefaction facilities used to supply LNG into the EEA or from its natural gas transportation and processing infrastructure in the North Sea. This is mainly because significant additional liquefaction capacity is being built and will come on-stream in the near future, while significant spare oil and gas transport and processing capacity exists in the North Sea region.
The Commission therefore concluded that the transaction would not raise competition concerns.
The transaction was notified to the Commission on 29 July 2015.