Arrow acquisition cleared by the competition regulator

Arrow-EnergyThe proposed acquisition of Arrow Energy Ltd., a coal seam gas producer in Australia, by Royal Dutch Shell Plc and PetroChina Co. has finally got clearance by the Australian Competition and Consumer Commission. The competition regulator said today that it would not oppose the acquisition of Arrow Energy Ltd. ACCC was reviewing the transaction since more than a month.

"Taking into account the significant competing gas suppliers and abundant gas reserves that would remain post acquisition, the ACCC considered that the proposed acquisition was unlikely to substantially lessen competition in any relevant market," said ACCC today.

Royal Dutch Shell and PetroChina offered a joint takeover bid of $A3.5 billion or $A4.70 per share to Arrow Energy last month. Arrow has already advised its shareholders to accept the offer.

The acquisition of Arrow would give Shell and PetroChina an important presence in the Australian coal seam gas industry. Both the companies are planning to increase their liquefied natural gas production from coal seam gas in the Asia Pacific region.

However, the acquisition has another hurdle as it needs the approval from Australia's Foreign Investment Review Board and the shareholders of Arrow. The shareholders of Arrow will take the decision on the bid in a meeting scheduled in July this year.