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The European Commission has approved Shell’s previously announced proposal to acquire British oil and gas firm BG Group in a $70bn deal.

The European antitrust regulator cleared the deal, stating that it would not give Shell market power to benefit in sectors such as oil and gas exploration, liquefaction of gas and the wholesale supply of liquefied natural gas (LNG).

Shell will also not be able to prevent competitors from using its North Sea gas infrastructure.

The commission also found that Shell would be unable to stop its competitors from gaining access to its liquefaction facilities or from gas transportation and processing infrastructure in the North Sea.

Prior to giving the clearance, the commission investigated on the markets where the activities of Shell and BG Group overlap.

The markets include the exploration for oil and gas reserves, the supply of natural gas and the liquefaction and supply of LNG.

"The EU concluded that Shell will not be able to influence prices and the markets would remain competitive post-transaction."

The EU concluded that following the takeover, Shell will not be able to influence prices and the markets would remain competitive post-transaction.

Shell expects that the combination will add 25% to the company’s proved oil and gas reserves and 20% to production, each on a 2014 basis in addition to generating pre-tax synergies of about $2.5bn a year.

The acquisition will also provide Shell with improved positions in competitive new oil and gas projects, particularly in Australia LNG and Brazil deepwater.

This is the second regulatory approval for the deal after it received a green light from Brazilian regulatory authorities.

The deal still requires mandatory approval in Australia and China.

Image: Royal Dutch Shell head office, Carel van Bylandtlaan, The Hague. Photo: courtesy of PL van Till.