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Shell’s Arrow Energy Cleared by Australia, China to Purchase Bow

December 16, 2011, 2:21 AM EST

By James Paton

Dec. 16 (Bloomberg) — Arrow Energy Ltd., the natural gas producer owned by Royal Dutch Shell Plc and PetroChina Co., won approval from Australia’s Foreign Investment Review Board to buy Bow Energy Ltd. for A$535 million ($534 million).

The transaction was also cleared by Chinese authorities, Brisbane-based Bow said today in a statement. The decisions follow approval earlier this month by the Australian Competition & Consumer Commission.

Arrow, seeking additional resources for a liquefied natural gas venture in Queensland state, agreed in September to increase its takeover offer to A$1.52 a share in cash from A$1.48. The accord was 72 percent more than Bow’s price of 88.5 cents in Sydney before Arrow made its initial offer Aug. 22.

Brisbane-based Bow was valued at between A$1.14 and A$1.53 a share by independent analyst Grant Samuel, the company said Nov. 17. Samuel found the deal “highly attractive,” given the uncertain economic and market conditions, the premium given to shareholders and the “remote prospect of Bow shares trading above A$1.52 per share in the foreseeable future,” Bow said.

Arrow, also based in Brisbane, plans the fourth LNG venture in Queensland to meet rising Asian demand, following approvals for more than $50 billion in developments led by BG Group Plc, Santos Ltd. and ConocoPhillips. The acquisition may allow Arrow to expand output at the venture’s first two units by as much as 15 percent, it said in September.

Bow expects the transaction to be completed Jan. 11, it said last month.

–Editor: Keith Gosman,

To contact the reporter on this story: James Paton in Sydney at [email protected]

To contact the editor responsible for this story: Andrew Hobbs at [email protected]

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