NEW YORK (The Deal) -- Royal Dutch Shell's (RDS.A) $74 billion takeover bid for BG Group has cleared its first regulatory hurdle, gaining approval from U.S. authorities -- but tougher tests are still to come.
Hague, Netherlands-based Shell on Tuesday welcomed the early termination of the approval process by the Federal Trade Commission, stating that it demonstrated the progress already made toward finalizing the energy sector's biggest takeover in more than a decade.
"We're well underway with anti-trust and regulatory filing processes in relevant jurisdictions around the world and we are confident that ... the deal will receive the necessary approvals," Shell CEO Ben van Beurden said in a statement. "We remain on track for completion in early 2016."
The most likely regulatory challenge to that timetable will come from Australia, where the Australian Competition and Consumer Commission on June 11 launched its investigation into the takeover.
The review comes at a sensitive moment for both Australia's gas market and the regulator. A day after the ACCC announced the commencement of its inquiry into Shell and BG's deal, it kicked off a year-long review of competition among East Coast gas producers. That inquiry was prompted by complaints from domestic manufacturers. They claim that increasing exports of Australian gas have left them unable to secure long-term supply agreements and forced prices rapidly higher.
Manufacturing Australia, a lobbying group representing building product groups, fertilizer makers and steel companies, claims increased Australian gas prices will cost manufacturers about A$120 billion ($92.2 billion) by 2021 and put about 83,000 jobs at risk.