The Norwegian Competition Authority has rejected the merger of two of the largest offshore accommodation vessel companies.
In rejecting the proposed business combination of Stavanger-based Prosafe SE and Floatel International to create the world’s largest offshore accommodation vessel owner, the Norwegian Competition Authority (NCA) said the move would “significantly prevent effective competition in the market for offshore accommodation services on the Norwegian continental shelf (NCS).”
Typical charterers of accommodation vessel services are oil and gas operators, with Equinor accounting for 70% of the production activity in the NCS. ConocoPhillips, Aker BP, Shell and Wintershall, Neptune Energy, Var Energi, and Lundin Norway are among others with production activity interests in the NCS.
Both Floatel International and Prosafe SE are working to get clearance for the merger from regulatory bodies in Norway and the UK and have agreed to extend their transaction agreement from 31 December 2019 to 30 June 2020.
Beyond regulatory approval, the merger is also subject to approval of Floatel International’s bondholders and through an extraordinary general meeting of Prosafe SE.
Prosafe has filed an appeal to the NCA’s decision and will continue its efforts to get clearance in Norway.
In the UK, the merger is being reviewed by the UK’s Competition and Markets Authority.
A marriage of Prosafe and Floatel International would unite two of the leaders in accommodation vessels in the offshore energy business.