The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Shell Gas (“Shell Gas”), a Portuguese subsidiary of the Shell Petroleum Company Limited, by Repsol Butano (“Repsol”), a Spanish undertaking which is part of Repsol Group. This transaction will create a third significant market player along with Galp and BP. The Commission concluded that the combination of the two businesses will not significantly impede effective competition in the LPG market in Portugal or any other part of the European Economic Area (EEA).
Shell Gas is a subsidiary of The Shell Petroleum Company Limited. Shell Gas owns and operates Shell’s LPG (Liquefied Petroleum Gas) business in Portugal.
The Spanish-based Repsol Group is engaged in all aspects of the petroleum and natural gas business. Repsol Butano is the company of the Repsol Group responsible for the LPG business.
The Portuguese LPG market is already concentrated in the hands of five players (in decreasing order of market share: Galp, BP, Shell, Esso and Repsol). Galp acts as a market leader and controls a significant proportion of the LPG production facilities and infrastructure.
Repsol, the leading company in the Spanish LPG market, has been competing on the Portuguese LPG market since 1994. The company has been supplying LPG from its Spanish refineries or terminals and until recently did not have any LPG infrastructure in Portugal. Until now, Repsol’s growth in the Portuguese market has been hampered by the absence of LPG infrastructure in the country, which led to high transport costs and limited operational flexibility. The combination of Shell and Repsol will give them third position in terms of market share behind Galp and BP. The Commission came to the conclusion that Repsol, in its new position, will be better able to compete than it was prior to the transaction.