The proposed merger deal between offshore accommodation platform operators Floatel and Prosafe is facing a regulatory hurdles from both Norwegian and UK authorities.
The Norwegian Competition Authority (NCA) has issued a statement of objection to the proposed merger, a move which follows the Competition and Markets Authority (CMA) in the UK also raising concerns with the deal.
“The Norwegian market for offshore accommodation services has a limited number of players with Prosafe and Floatel as the two largest suppliers. Prosafe and Floatel are the only suppliers that can offer modern semi-submersible accommodation units on the Norwegian continental shelf. The Competition Authority is of the opinion that the two suppliers are close competitors, and that they only to a limited extent meet competition from other players,” said Lars Sørgard, director general of NCA.
“We fear that customers after the merger will have few or no competing suppliers when tendering for offshore accommodation services. Reduced competition would lead to increased costs for customers,” added NCA deputy director Marita Skjæveland.
According to Prosafe, the two companies have already presented remedial measures to the NCA, to ensure customers on the Norwegian continental shelf have access to sufficient vessel capacity at short notice and on competitive terms.
Prosafe and Floatel will submit responses to NCA’s considerations.
The two companies now have 15 working days to comment on the authority’s objections, and the authority will make a final decision by a deadline of October 28.
Prosafe currently owns a fleet of nine semi-submersible accommodation platforms with another two newbuildings under construction while Floatel owns five similar units.