MELBOURNE, Dec 3 (Reuters) - Royal Dutch Shell on Thursday won approval from Australia's Foreign Investment Review Board for the company's proposed $70 billion takeover of BG Group Plc, leaving China as the last regulatory hurdle to the deal.
The approval included an unusual condition designed to prevent disputes with the Australian Taxation Office (ATO) with the merged group, amid Australia's push to clamp down on profit shifting and tax avoidance by multinationals.
"I have approved the...proposal by Royal Dutch Shell plc (Shell) to acquire BG Group plc (BG), subject to the condition that Shell provides an ongoing commitment to engage with the ATO in a transparent manner regarding its tax affairs in relation to acquisition of BG and integration of BG into Shell's operations," Australian Treasurer Scott Morrison said in an emailed statement.
Shell and BG said they are now awaiting clearance from China's Ministry of Commerce, adding that the deal remains on track to be sealed in early 2016.
"I am very pleased to receive this news. The FIRB approval is an important step towards deal completion," Shell Chief Executive Ben van Beurden said in an emailed statement.
The condition imposed by Australia requires Shell to agree with the tax office how it will approach transfer pricing, loans between different arms of the company and other issues before filing tax returns from the merged group.
The undertaking will not affect the value of the merger, as Shell already has what is called a "cooperative compliance" approach to taxation in Australia, a spokesman said.
"This not only ensures stability and certainty for business and the government but also reduces inefficiencies for all parties and minimises disputes," Shell Australia Chairman Andrew Smith told a Senate tax hearing on Nov. 18.
Shell last month won approval from Australia's competition watchdog for the deal, despite concerns raised by major gas users in the country's east.
Beijing is pressing the Anglo-Dutch company to sweeten long-term gas supply contracts worth tens of billion dollars with state-owned China National Petroleum Corp, China National Offshore Oil Corp (CNOOC) and Sinopec to secure approval for the deal, industry sources close to the talks have told Reuters.
(Reporting by Sonali Paul; Editing by Shri Navaratnam)
Copyright 2017 Thomson Reuters. Click for Restrictions.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you