– BG Group plc (BG/ LN) / Shell (RDSB LN): Unconditional clearance by Australian ACCC. Although we were very confident that ACCC clearance was forthcoming, we are slightly positively surprised that clearance was unconditional and not with (limited) behavioural remedies geared to the Queensland /Eastern Australian (domestic) gas market. Following approvals from ACCC, EC and Brazil now, only 2 of the 5 (regulatory) pre-conditions are still outstanding before the Scheme (votes) will get organised:

1) Australian Foreign Investment Review Board (FIRB): We expect this one to be mere formality and get FIRB clearance in before the end of 2015 as a) FIRB normally follows ACCC’s decisions, b) both BG and Shell already have very entrenched and growing interests in Australia.

2) Chinese MOFCOM: Although the more opaque and black box regulator, however all signals and noises (from Shell, from its Chinese JV partners, …) coming from China indicates that approval is coming in Phase 3 – which is expected in January 2016.

With high conviction that Shell will obtain these last 2 approvals in the next 6-8 weeks, the only risk associated to the transaction relates to price evolution of oil: any further significant price drops of oil below $40/bbl might put some pressure on Shell’s board to potentially change or withdraw their recommendation – we believe, however, that such scenario seems unlikely given the high profile and recurring hammering home the message by Shell on how strategic and long-term important BG’s deal is for Shell.

We continue to like the spread (0.4454 RDSB + GBp 383 – BG) at current GBp 95-100 levels, however we would only add more to current positions should oil prices start moving up again

– Rexam plc (REX LN): Parties have submitted remedies to EC, implying that new EC deadline has been extended by 3 weeks till 22 January 2016. No surprises, just needs to understand firstly how many plants parties have been willing to divest, and secondly if they have already identified a single buyer or number of smaller buyers for the divestiture package.