The merger between major offshore accommodation operators Prosafe and Floatel is raising competition concerns in the UK.
While Norwegian authorities are close to clearing the deal, the Competition and Markets Authority (CMA) in the UK has been investigating the proposed deal and after completing its initial phase 1 investigation, concerns have been raised that the deal could reduce competition in the supply of offshore accommodation support vessels for oil and gas projects on the UK Continental Shelf. It is though that customers of the two companies may face higher prices or lower quality offers due to insufficient competition.
“The CMA’s investigation has found that Prosafe and Floatel are the two largest suppliers in the market, owning the vast majority of semi–submersible offshore accommodation in North West Europe. They compete closely with each other and have consistently won the most contracts over time. Aside from the merging businesses, there are limited alternatives available to customers at present,” CMA said.
Prosafe said in a release that the company has been informed by the UK authorities that the merger cannot be cleared unconditionally in phase one, and that both Prosafe and Floatel are currently considering an acceptable remedy for phase one or whether to enter phase two.
Prosafe currently owns a fleet of nine semi-submersible accommodation platforms with another two newbuildings under construction while Floatel owns five similar units.