Brazil has confirmed the merger between Saipem (Saipem) and Subsea 7 (Subsea 7) with the condition of selling a specific ship. This decision was made by Brazil's competition regulatory body (CADE) to address competitive concerns. The merger of these two companies will create an underwater engineering powerhouse with an annual revenue of approximately €21 billion ($23.6 billion) and a combined backlog of €43 billion ($48.5 billion).
Details of the Merger and Its Conditions
Following the agreement to sell the ship Seven Borealis, which is capable of undertaking deep and ultra-deep projects, CADE issued the merger approval. This ship is recognized as a key factor in the competition between two major contractors in the Brazilian underwater engineering market, especially in projects related to Petrobras and the country's pre-salt fields. The agreement also includes conditions to ensure that the buyer can compete for future contracts at sea while maintaining the execution of previously registered projects in the backlog of these companies.
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Implications of the Merger and Subsequent Oversight
Saipem and Subsea 7 emphasized that the sale of this ship will not have a significant impact on the strategic rationale for the merger and will generally not affect the anticipated annual synergies of about €300 million ($338 million). However, the Brazilian approval does not signify the end of the regulatory process. The European Commission initiated a deeper investigation into this agreement in July 2025, raising concerns about reduced competition in the underwater systems market. Brussels also paused its review in August 2025, awaiting additional information from the companies.
Additionally, this deal remains under the scrutiny of regulatory bodies in Australia, where the competition authority is conducting a thorough assessment of its impact on marine engineering services.
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