The EU investigates the merger of Saipem and Subsea7 over competition concerns
The European Commission has launched an in-depth investigation into the planned merger between Saipem and Subsea7 due to concerns about reduced competition in the subsea infrastructure and engineering services market. A final decision is expected by November 26.
Petrus
The European Commission has launched an in-depth investigation into the planned merger of service companies Saipem and Subsea7 due to potential risks to competition.
The proposed merger, announced in July last year, involves the creation of a new company, Saipem7, which will operate and implement projects in more than 60 countries.
The investigation will assess whether the merger could significantly impact competition levels in specific offshore engineering and construction service markets. The main concerns relate to a possible reduction in competition in the already concentrated subsea infrastructure market, including subsea cables, risers, and pipelines, as well as in carbon capture and storage (CCS) projects.
A preliminary analysis indicated that the deal could lead to a significant decrease in competition in the SURF services market (subsea systems, risers, and pipelines) for oil, gas, and CCS projects, where there is already a high concentration of market participants.
As a result of the merger, a company will be created with a combined order portfolio worth €43 billion ($50.5 billion), which will be jointly owned by the shareholders of both companies on an equal basis.
The European Commission is also evaluating whether the deal could cause competition issues in other markets, including the construction of trunk pipelines and the decommissioning of outdated subsea infrastructure.
The EU investigation began following a similar review by Australia’s antitrust authorities. A final decision on the merger is expected by November 26.