The Australian Competition and Consumer Commission (ACCC) has delayed its decision on the proposed acquisition by Shell for the entire share capital of BG Group worth US$70bn to 12 November 2015, over gas supply competition concerns. According to the ACCC, the two companies are already dominant players in the coal-seam gas industry in Australia, as BG holds a majority stake in the $20bn Queensland Curtis LNG project and Shell owns a 50% in Arrow Energy (largest uncontracted gas reserves in eastern Australia). The proposed acquisition could make Shell prioritise gas supply to BG's LNG facilities, lessening competition to supply domestic gas users and raising gas prices.
The acquisition was announced in April 2015. BG and Shell received approval from the United States in June 2015 and from Brazil in July 2015. They expect to receive further regulatory clearances from all the countries where BG has operations, including the European Union, China and Australia, to complete the transaction by early 2016.
The two companies are complementary. By 2020, the combined group will have two strategic growth businesses – deep water and integrated gas – that could potentially each generate US$15-20bn/year of cash flow from operations. It will have upstream and downstream engines potentially generating a further US$15-20bn/year of cash flow and long term positions potentially adding US$10bn/year.