European Commission
The European Commission has launched an in-depth antitrust investigation into the proposed merger between Saipem and Subsea7, citing concerns that the deal could significantly reduce competition in key offshore engineering markets.
The transaction, which would create a new company branded Saipem7, is now under scrutiny as regulators assess its potential impact on the global market for subsea umbilicals, risers, and flowlines (SURF) services, as well as the rapidly expanding carbon capture and storage (CCS) sector.
According to the Commission, the merger would combine two of the world’s three leading SURF contractors in a market that is already highly concentrated. Preliminary findings suggest the deal could leave customers with only one comparable competitor capable of executing the industry’s most technically demanding offshore projects.
SURF systems form the backbone of offshore oil, gas, and CCS developments, linking subsea wells—often located thousands of metres below sea level—to production facilities on the surface through a network of pipelines, risers, and control cables. The same expertise and vessels are increasingly being deployed in CCS projects, where carbon dioxide is transported and permanently stored in geological formations beneath the seabed.
While the Commission found the proposed merger to be largely complementary in areas such as offshore wind and conventional offshore engineering, it concluded that the combination could substantially strengthen the companies’ position in the SURF market.
Brussels warned that the merger could significantly weaken competition for both oil and gas developments and CCS projects, where Saipem and Subsea7 compete head-to-head, particularly on the largest and most profitable contracts.
The Commission also highlighted the industry’s exceptionally high barriers to entry. Building and operating the sophisticated installation vessels required for complex subsea projects demands substantial capital investment, while limited spare capacity across the sector makes expansion difficult for smaller competitors.
Although many customers are major international energy companies with significant purchasing power, regulators believe they may have insufficient alternatives to counter potential price increases should the merger proceed without remedies.
“As a result, the transaction may lead to the loss of significant competition in the market for SURF services, potentially resulting in higher prices and reduced innovation,” the Commission said.
The investigation will also assess whether the merger could affect adjacent offshore markets, including trunkline installation services for large export pipelines and the decommissioning of ageing subsea infrastructure, both of which rely on similar assets and technical capabilities.
In addition, regulators will examine whether the combined company could create anti-competitive vertical or conglomerate effects across the wider offshore services sector.
The merger was formally notified to the European Commission on 16 June 2026. Under the EU Merger Regulation, the Commission has 90 working days—until 26 November 2026—to reach a decision.
Officials stressed that the launch of a Phase II investigation does not prejudge the outcome of the review.
