Four Competition Regulators Examine The Saipem And Subsea7 Merger
The proposed merger of Saipem and Subsea7 is being examined by four competition authorities across three continents, with the European Commission having opened an in-depth investigation and Australia running a parallel second-phase review. The combination would create a group headquartered in Milan with an order backlog of 43 billion euros, revenues of around 20 billion, some 45,000 employees and a fleet of more than sixty construction vessels.
The two parties agreed terms in early 2025 and signed a binding agreement that July for a fifty-fifty all-share merger of equals, targeting around 300 million euros of annual synergies drawn partly from optimising the combined fleet. The United Kingdom cleared the transaction in November and Brazil in June, though the Brazilian clearance is under appeal from the national oil company, a domestic producers' association and two international majors, with a tribunal ruling still awaited. The European Commission's current deadline is 26 November.
The competitive concern is concentrated in the installation of subsea umbilicals, risers and flowlines, where the two companies are two of the three global leaders. Combining them leaves a single comparable competitor in a market where spare capacity is limited and where the largest deepwater projects can only be executed by a handful of contractors. Brazil's review ran 204 days, included two rounds of market consultation and a physical inspection of the vessels, and ended in unconditional approval from the authority's investigative arm before the appeals were lodged.
An interesting element of the analysis concerns carbon capture. Both the European Commission and the British authority declined to treat carbon capture and storage as a separate supply market, the commission concluding that competing for such projects requires very similar capabilities and assets to traditional oil and gas subsea work, today and in the future. Offshore wind was treated differently and assessed as a distinct market, where the commission found the parties largely complementary, the British authority dismissed concerns partly on differences in vessel capability, and the Australian regulator expressly excluded wind farm works from its review.
The British reasoning is worth noting for what it reveals about market definition. Customers raised concerns about competition for the largest and most complex deepwater projects, but the authority observed that those projects typically fall outside the North Sea and that Saipem has been largely absent from British waters, recording no subsea construction revenues or vessel days there in the past five years. A regulator assessing a global market through a national lens will reach a different answer from one assessing the same transaction on its own terms, which is why the European and Australian reviews remain the ones that will determine the outcome.
