Centrica Plc, the owner of British Gas, said that its hostile bid for North Sea oil and gas company Venture Production Plc was approved by the European Union.

On Friday, Centrica confirmed that its offer had become mandatory, allowing its advisers to buy shares at 845 pence, its offer price, which values Venture at £1.3 billion.

By the end of trading yesterday, it had acquired a further 2,606,049 shares, or 1.7 per cent of Venture, meaning it now owns or controls 41.9 per cent of the Aberdeen-based company. It is seeking 50 per cent.

Centrica, which also operates under the Scottish Gas brand, has extended the time shareholders have to accept the offer by more than a fortnight to 14 September.

The European Commission was reviewing whether the takeover would damage competition in the North Sea oil and gas exploration sector and ruled that the market share of the combined group would not be so large as to create issues.

"As the combined market share of the parties would remain moderate in the markets for the exploration and production of natural gas and crude oil, the transaction would not give rise to any horizontal competition concerns," it said.

Centrica's offer was rejected almost immediately by the Venture management, which has insisted from the outset of the approach that Centrica's offer "substantially undervalues" the company.

In a statement, Venture said the Centrica offer did not fairly reflect the value of Venture's reserves. It urged shareholders to ignore the offer, and not to sell to Centrica.

"The Centrica offer does not fairly reflect the value of Venture's reserves - let alone the significant going-concern value or the key strategic benefits that the board believe Venture would bring to Centrica," the company said.

Two major investors controlling about 13 per cent of the natural-gas producer had in July rejected Centrica's offer.

Larry Kinch, a founding shareholder of Venture with a 7.4 per cent holding, and ArcLight Capital Partners LLC, which has 5.4 per cent, said any bid under 1,000 pence a share undervalued the company.

Centrica has about 15.5 million gas and electricity customers in the UK.