By Phil Boeyen, ShareChat Business News Editor
Friday 17th November 2000
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The decision, which was expected after the market closed on Friday, was made as the market opened this morning.
In making its decision the Commission says the clearance is subject to Shell divesting a range of assets including all FCE's interests in the Kupe, Tariki, Ahuroa, Waihapa, Ngaere, Ngatoro, McKee, Kaimiro and Mangahewa fields.
Shell must also divest 10% of the shares in the Maui field and 3.7% of shares in the Pohokura field, which will reduce Shell's post-acquisition interest to less than 50%.
The Commission says further that Shell must get rid of any interest in Kapuni Gas Contracts, Challenge Petrol, and New Zealand Refining.
Chairman, John Belgrave, say the Commission was satisfied that, subject to the divestment undertakings, Shell would not acquire or strengthen dominance in any of the relevant markets for current gas production, gas production after 2009, and production of LPG.
"These divestments provide a significant amount of gas that, together with other constraints, will provide effective competition to Shell in the current gas production market and the market after 2009."
The Commission says the divestment of the Tariki, Ahuroa, Waihapa, and Ngaere fields is significant in the LPG production market as it provides an LPG producer independent of Shell that, together with other independent producers of LPG, will constrain Shell effectively in this market.
The clearance marks another step in the Fletcher Challenge restructuring plan, which included the sale of Energy to Shell and Apache for $4.3 billion, setting up Forests and Building as stand-alone companies, and setting up a new entity called Rubicon.
Under the terms of the Energy sale shareholders in FEG will receiveUS$3.34 per share in cash, an entitlement to receive one Capstone share for every 70 FEG shares, and one share in Rubicon for every FEG share held.
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