By Scott Wright
TWO companies which provide offshore accommodation for workers in the oil and gas industry have scrapped plans to merge.
Prosafe of Norway and Bermuda-headquartered Floatel walked away from the deal after serious competition concerns were highlighted following an in-depth investigation by the regulator. The proposed deal was referred for a Phase 2 inquiry by the Competition and Markets Authority in September after initial concerns were raised by the watchdog.
Prosafe and Floatel both supply semi-submersible offshore accommodation support vessels (semi-submersible ASVs) to oil and gas companies. They are described by the CMA as a key facility for certain work in the UK Continental Shelf and the Norwegian Continental Shelf, such as where the water is deep or where weather conditions are harsh and other types of vessel are not suitable.
The CMA provisionally found in January that the merger may result in a substantial lessening of competition and customers may face higher prices, and/or lower quality when tendering for semi-submersible ASVs.
Prosafe and Floatel said they have “mutually decided to discontinue the merger process due to financial uncertainty and process risk.” They added: “The regrettable conclusion is that any near term completion of a value enhancing merger
is unlikely.”
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