UK regulator to further probe Prosafe-Floatel merger after competition concerns raised

The UK Competition and Markets Authority will refer the proposed merger between Prosafe and Floatel to Phase 2, after the first phase raised competition concerns.

Illustration only: A Prosafe accommodation rig / ©Prosafe
Illustration only: A Prosafe accommodation rig / ©Prosafe

The proposed combination would create the world’s largest owner of semi-submersible accommodation rigs.

The UK CMA said that – after completing its initial Phase 1 investigation – it was concerned that the deal could reduce competition in the supply of flotels for oil and gas projects on the UK continental shelf.

At the time, the CMA said that Prosafe and Floatel’s customers would face higher prices or lower quality offers when tendering for offshore accommodation rigs due to insufficient competition. It then said that if Prosafe and Floatel were unable to address the CMA’s concerns, the deal would be referred for an in-depth Phase 2 investigation, to be carried out by a group of independent CMA panel members.

In a statement on Tuesday, Prosafe said it had been informed by the Competition and Markets Authority in the UK that they will refer the merger to Phase 2.

“Prosafe confirms that the company will apply for a three-week extension in order to evaluate whether to enter Phase 2,” Prosafe said.

To remind, the Norwegian Competition Authority said on Monday it was considering intervening against Prosafe’s acquisition of Floatel.

“The transaction involves the two closest competitors in the Norwegian market for offshore accommodation services. The Competition Authority has today notified the parties that it is considering blocking Prosafe’s acquisition of Floatel,” the regulator said.

Offshore Energy Today Staff

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