San Francisco: Shell Oil’s planned merger with BG Group, provisionally approved by Brazil’s competition authority – known as Cade – 15 days previously, got final clearance from that body on Friday.
That means it has satisfied the first of several preconditions.
The 15-day waiting period was to allow for any appeals but now Cade’s unconditional approval is final.
This $70-billion cash and shares merger still needs similar clearances in Australia, China and Europe. The preconditions were set out in the April 8 deal announcement and with processes well under way in those jurisdictions, too, the combined group could be completed by 2016.
British oil multinational BG has a substantial Brazil portfolio and its acquisition by Shell could see Brazil account for 20 per cent of the Dutch energy giant’s output by the end of the decade.
In its assessment just over a fortnight ago, Cade found that the new merged entity would not endanger competitiveness because its combined market share would still be less than other producers.
But if it finally comes to fruition the deal will add to Shell’s proven oil and gas reserves worldwide by 25 percent and to production by 20 percent. It would also make Shell-BG the leading foreign oil company in Brazil.