Prosafe and Floatel merger falls through

The decision follows an in-depth investigation by the Competition and Markets Authority which highlighted serious competition concerns

Two major offshore accommodation platform operators Prosafe and Floatel have “mutually decided” to discontinue their merger process due to financial uncertainty and process risk.

The decision follows an in-depth investigation by the Competition and Markets Authority (CMA) which highlighted serious competition concerns.

Prosafe and Floatel both supply semi-submersible offshore accommodation support vessel (ASVs) to oil and gas companies, which are used to provide accommodation space for employees working offshore and are a key facility for some types of work in the UK Continental Shelf and the Norwegian Continental Shelf.

The CMA had launched a Phase 2 inquiry in September 2019 after the initial competition concerns led to the proposed merger being referred to a group of independent CMA panel members for an in-depth investigation.

Last month, it provisionally found the merger may result in a “substantial lessening” of competition and customers may face higher prices and/or lower quality when tendering for semi-submersible ASVs.

The competition watchdog proposed that blocking the merger would be the only way of addressing the concerns.

Prosafe and Floatel said in a statement: “Prosafe and Floatel International have mutually decided to discontinue the merger process due to financial uncertainty and process risk. The regrettable conclusion is that any near-term completion of a value enhancing merger is unlikely.”

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