Objections against Prosafe’s acquisition of Floatel

The Norwegian Competition Authority is considering intervening against Prosafe’s acquisition of Floatel. The transaction involves the two closest competitors in the Norwegian market for offshore accommodation services.

The Competition Authority has today notified the parties that it is considering blocking Prosafe’s acquisition of Floatel.

– The Norwegian market for offshore accommodation services has a limited number of players with Prosafe and Floatel as the two largest suppliers. Prosafe and Floatel are the only suppliers that can offer modern semi-submersible accommodation units on the Norwegian continental shelf. The Competition Authority is of the opinion that the two suppliers are close competitors, and that they only to a limited extent meet competition from other players, says Lars Sørgard, Director General of the Norwegian Competition Authority.

Other suppliers on the Norwegian continental shelf offer accommodation units that are not fully comparable to the semi-submersible units of the parties, and are not able to compete for all contracts.

– We fear that customers after the merger will have few or no competing suppliers when tendering for offshore accommodation services. Reduced competition would lead to increased costs for customers, says deputy director Marita Skjæveland.

Prosafe has proposed remedies with a view to remove the competition concerns identified by the Competition Authority. However, the Authority’s preliminary assessment is that these will not sufficiently address the Authority’s concerns.

The Competition Authority emphasises that the objections against the acquisition are preliminary and that a final decision has not yet been adopted.

According to the Competition Act, the parties now have 15 working days to comment on the Authority’s objections. The Authority then has 15 working days to make its final decision. The deadline for a final decision is 28 October 2019.