Brazil says yes to Saipem-Subsea7, final obstacles in Brussels and Australia

MILAN – Once the biggest obstacle has been overcome, the two suitors are ready to get married. Or almost. The court of the Conselho Administrativo de Defesa Econômica (Cade), the Brazilian Antitrust, has approved the merger between Saipem and Subsea7 which will lead to the creation of Saipem7, a European player in the engineering and construction of large plants serving the energy sector, with approximately 21 billion euros in revenues and an aggregate order book of 43 billion. Now only the last mile remains.

Green light (with remedies) in Brazil

The Brazilian authorization was among the most awaited in the long process towards the merger. It is precisely in the South American country that the operation between the Italian and Norwegian groups had encountered the greatest opposition. Last June, in fact, the Cade technical body had authorized the wedding without attaching any conditions. But Petrobras and other companies had appealed, asking for the sale of some specialized vessels to preserve competition in the market for deep-water offshore services.

Last month, Saipem and Subsea7 filed briefs with the court asking it to confirm the unconditional green light, against Petrobras' objections. Today the Cade approves the merger, but requires the sale of the Seven Borealis ship, specialized in the laying of pipelines and capable of operating on projects with depths exceeding 1,500 metres. This, explains a note, "in response to some competitive concerns". The companies therefore obtained a remedy, although much lighter than what was requested. The managers of the future Saipem7 confirm the announced synergies - around 300 million euros on an annual basis - and expect that the sale of the ship will not have "significant impacts on the strategic rationale of the merger".

The last mile

The authorization process is in its final stages. With Brazil, Saipem7 has obtained the green light from 11 out of 16 authorities, including the Competition and Markets Authority of the United Kingdom and the Italian government for golden power. However, the appeal lacks the approval of the Australian Competition Authority (ACCC) and the antitrust decision of the European Commission.

The first will express its opinion on 22 December, while Brussels, after deciding to deepen the analysis, paused the investigation on 25 August, without providing the market with a new date. The previous deadline was December 16th.