LONDON – The UK Competition and Markets Authority (CMA) said Friday that Noble Corp.’s acquisition of The Drilling Company of 1972 A/S – known as Maersk Drilling – raises competition concerns and that it will refer the deal for a further review unless the companies offer a solution to address them.
According to Dow Jones Newswires and several other online reports, the regulator said that the deal could increase operating costs for oil and gas producers in the UK North Sea. Specifically, the CMA said it is concerned about the supply of jackup rigs for offshore drilling in North West Europe.
“The CMA is concerned that the combined businesses would not face sufficient competition after the merger, which could lead to higher prices and lower quality services for oil and gas producers in the North Sea,” the agency said.
The regulator has given the companies five business days to offer a proposal to address its concerns. It will then have a further five days to consider whether to accept them or refer the deal for a Phase 2 investigation.
Noble agreed to buy Maersk Drilling last November in an all-share deal under which shareholders of each company would own 50% of the combined group.