Italy’s engineering, drilling, and construction services giant Saipem and the Luxembourg-domiciled Subsea7 have made inroads in bringing their proposed business combination closer to completion, with the green light from Brazil’s antitrust watchdog, the Conselho Administrativo de Defesa Econômica (CADE), clearing a major regulatory hurdle while conditioning the approval on the sale of a pipelaying vessel to preserve market competition.
Saipem and Subsea7 have received the approval from Brazil’s CADE for their proposed combination to create Saipem7, subject to compliance with the commitments set out in a merger control agreement.
The duo has committed to divest the Seven Borealis vessel to address the competition concerns raised by CADE’s tribunal during its review. This commitment includes specific provisions to ensure continuity in the execution of the existing project backlog.
Both companies have emphasized that the divestiture is not expected to materially affect the strategic rationale of the proposed combination. As a result, they have confirmed the synergies previously announced.
The European players underlined: “Subsea7 and Saipem remain firmly committed to the proposed combination and will continue to work constructively with the relevant authorities to secure prompt satisfaction (or, where applicable, waiver) of the remaining conditions set out in the common merger plan approved by the shareholders of both companies.”
This go-ahead in Brazil comes after Saipem and Subsea7 announced the end of the U.S. antitrust review period, giving them the all-clear to close the transaction in America. The duo’s merger is not out of the woods yet, as the conclusion of the European Commission’s in-depth investigation to assess the proposed merger is still ongoing.