Brazil regulators approve Shell’s $70-billion acquisition of BG Group

By KATERINA PETROFF
Bloomberg

Royal Dutch Shell obtained regulatory approval from Brazil to buy BG Group, clearing another antitrust hurdle to completing the $70 billion acquisition.

Cade, as the regulator is known, published a decision approving the deal without restrictions in Brazil’s official gazette Wednesday.

The transaction won’t undermine competitiveness in Brazil’s oil and gas market as other producers would have a higher market share than the combined company, Cade concluded, citing data by oil regulator ANP.

Brazil follows the US in approving the industry’s biggest deal in at least a decade. Shell’s purchase at a 50% premium, announced in April, gives the Anglo-Dutch company liquefied natural gas (LNG) assets in Australia and oil and gas fields in Kazakhstan and Brazil. It still needs approval from countries including China.

In Brazil, Shell owns stakes in offshore fields in partnership with state-controlled Petrobras, which is selling assets to reduce the industry’s heaviest debt load.

After announcing the deal, Shell CEO Ben Van Beurden traveled to Brazil to meet with President Dilma Rousseff, reiterating his commitment to the country and interest in new opportunities.

Brazil is set to account for 20% of Hague-based Shell’s output by the end of the decade, with BG’s Brazil portfolio seen by analysts including Jefferies as a key growth driver.

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