Shell’s bid under review

Press, 4 March 1988, Page 8

Shell’s bid under review

The Commerce Commission yesterday deferred for further study an application by Shell New Zealand Holding Company, Ltd, to acquire up to 46.2 per cent of Petrocorp in conjunction with Todd Corporation, Ltd. $ The announcement was made by the commission before the announcement that the Government had agreed to sell its 70 per cent shareholding to Fletcher Challenge. The commission had formed the “tentative view” that the proposed Shell-Todd shareholding would be a controlling interest. The chairman of the commission. Mr John Collinge, said that the advice available to the commission indicated that the merged concern would have effective control of about- 79 per cent of estimated recoverable natural gas reserves and,

apparently, a monopoly on transmission and transpsort of natural gas in the North Island. The group would also have retail interests in natural gas in circumstances where licensed franchise areas existed. Mr Collinge said that the proposal raised competition issues such as whether potential producers of natural gas would be deterred and whether the retail market would be affected. The commission would investigate further unless the parties withdrew the application, or the commission decided it was unlikely 7 to proceed. The commission had previously consented to Fletcher Challenge’s buying Petrocorp on the ground that it had no significant gas industry interests and there were no competition implications in that proposal.