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.”