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UPDATE 2-EU regulators clear Shell's takeover of BG Group

Published 03/09/2015, 11:49 am
Updated 03/09/2015, 11:57 am
© Reuters.  UPDATE 2-EU regulators clear Shell's takeover of BG Group
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* Deal awaits clearance from China, Australia

* Australia watchdog postpones ruling to Sept. 17

* Shell still expects to complete deal in early 2016 (Adds Australia delay, Shell Australia comment)

LONDON, Sept 2 (Reuters) - Royal Dutch Shell RDSa.L gained EU approval on Wednesday for its $58 billion acquisition of Britain's BG Group BG.L , the second of four key markets needed to clear the deal, but faced a slight delay in securing a decision in Australia.

The European Commission said the transaction would not grant Shell market power in oil and gas exploration, the liquefaction of gas and the wholesale supply of liquefied natural gas (LNG).

The takeover, which will see Shell become the world's top LNG producer and a major deepwater oil player, is on track for completion in early 2016, Shell's Chief Executive, Ben van Beurden, said in a statement.

"Receiving clearance from the European Commission underlines the good progress we are making on the deal," van Beurden said.

The deal, which was worth $70 billion when it was announced in April, received the green light from Brazil in July but still requires mandatory approvals from authorities in Australia and China.

The Australian Competition and Consumer Commission said on Thursday it needed more time to review the takeover and postponed its decision by two weeks to September 17.

"The company will continue to work closely with the ACCC to complete the regulatory review and anticipate completion of the transaction to take place in early 2016," a Shell Australia spokesman said.

The commission said in June it was looking into concerns a takeover could lead Shell's Arrow Energy to put its coal seam gas into BG's Queensland Curtis LNG plant for export, which could drive up gas prices in the eastern Australian market.

U.S. regulators cleared the takeover in June.

Shell announced in July 6,500 job cuts and deep spending curbs in order to reassure investors it would be able to finance the BG acquisition as oil prices are expected to stage only a modest recovery in the coming years.

Shell's share price has slumped by nearly a quarter since the deal was announced, which has driven down the value of its cash and shares offer for BG to $58 billion, based on Wednesday's close.

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