Brazilian regulators express concern over proposed Subsea7-Saipem merger

Oil majors operating in Brazil – as represented by the Instituto Brasileiro de Petróleo e Gás (IBP) – have closed ranks to oppose a proposed merger between Subsea7 and Saipem, according to a Reuters report.

Prompted by the IBP, Brazil’s antitrust agency CADE (the Administrative Council for Economic Defense) has asked the two firms to provide its probe with new data on Friday, the report said. 

The proposed resulting new firm, to be called Saipem7, would have a strong enough position to impose additional costs, delay projects and pressure some clients into exclusive long-term contracts, IBP said in a November filing to CADE.

The IBP represents major oil and gas producers  operating in Brazil. 

Last Friday, weeks after receiving the comment from IBP, CADE asked both firms for more data, saying it lacked information necessary for analysis of the proposed merger.

In separate statements to Reuters, both Subsea7 and Saipem said they were engaging with CADE and relevant authorities in line with terms of their merger agreement filed in July.

The IBP declined to comment, and CADE officials referred Reuters to public documents.