Saipem, Subsea 7 deal to be hit with EU antitrust investigation, sources say
Overview of the Saipem and Subsea 7 Merger and Antitrust Concerns
By Foo Yun Chee
Background of the Merger
BRUSSELS, July 10 (Reuters) - Italian energy contractor Saipem's merger with Norwegian peer Subsea 7 is set to face a full-scale EU antitrust investigation because of competition concerns about the deal, people with direct knowledge of the matter said.
The companies announced the deal in February last year to create a leading global player in offshore energy services, from drilling and engineering to laying subsea infrastructure for offshore oil and gas projects. Both operate a fleet of vessels for these services.
EU Antitrust Investigation Details
Expected Timeline and Possible Remedies
The European Commission will likely kick off an in-depth investigation at the end of its preliminary review on July 22, the people said. The companies could stave it off by offering remedies to address antitrust worries but this is seen as unlikely, the sources said.
Potential Remedies
Potential remedies could include the companies reducing their capacity or selling off some of their vessels, one source said.
The Commission, which acts as the EU competition enforcer, and Saipem declined to comment.
Market Impact and Global Regulatory Response
Client Base and International Approvals
Saipem counts Saudi Aramco, QatarEnergy, Abu Dhabi's ADNOC and other national energy companies among its clients while Subsea 7's customer base is more focussed on international oil firms such as BP and Equinor.
Other Regulatory Actions
The deal was cleared unconditionally in Brazil last month, which has triggered lawsuits by some companies opposed to the merger. The Australian antitrust regulator last week ordered an in-depth investigation over concerns the deal could reduce competition in key offshore oil and gas services.
(Reporting by Foo Yun Chee, Editing by Louise Heavens)
