Saipem and Subsea7, two giants in the engineering and construction services industry, have taken an important step towards finalizing their merger by receiving approval from Brazil's antitrust authority, Conselho Administrativo de Defesa Econômica (CADE). This approval removes a significant regulatory hurdle and allows the two companies to move on to the next stages of their merger.
Conditions for Merger Approval
CADE has conditioned the approval of the merger on the sale of a pipelaying vessel to maintain competition in the market. This action specifically addresses competition concerns raised during the authority's review. Saipem and Subsea7 have committed to divesting the vessel Seven Borealis to alleviate these concerns. This divestment includes specific conditions that will assist in the execution of existing projects.
Strategic Stability Post-Merger
The two companies have emphasized that this divestment will not have a significant impact on the strategic reasons for the merger, and they continue to stress the synergies previously announced. These two European companies have stated that they will continue to cooperate with the relevant authorities to swiftly meet the remaining conditions in the joint merger plan, which has been approved by the shareholders of both companies.
This approval in Brazil came after the completion of the antitrust review period in the United States, allowing the two companies to finalize their deal in America as well. However, the outcome of the European Commission's in-depth review of this merger is still unclear, and the two companies must await the final result of this review.
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