Commission opens in-depth investigation into proposed merger between Saipem and Subsea7

This article is brought to you in association with the European Commission.

The European Commission has opened an in-depth investigation to assess, under the EU Merger Regulation, the proposed merger between Saipem and Subsea7 to become “Saipem7”. The Commission is concerned that the proposed concentration may significantly impact effective competition in some offshore engineering and construction service markets.

The Commission has preliminarily found this merger to be largely complementary in some areas, including offshore wind projects and so-called conventional offshore projects.

However, at this stage it appears that the merger would further consolidate the SURF services market. In oil and gas production, SURF (subsea umbilicals, risers, and flowlines) is the subsea infrastructure that connects offshore wells, often located thousands of metres below sea level, to production facilities above the surface. It comprises different types of pipes and cables which are installed on, or near, the seabed. SURF services are also used in carbon capture and storage projects (‘CCS’), where very similar capabilities and assets, as for traditional oil and gas SURF, seem to be necessary to compete effectively for these projects today and in the future.  

CCS involves capturing carbon dioxide (CO₂) emissions from industrial facilities and power plants, transporting the CO₂ through pipes and permanently storing it in geological formations often deep beneath the seabed to prevent it from being released into the atmosphere.

The global SURF services market is already highly concentrated. Saipem and Subsea7 are two of the three market leaders with very few credible alternatives.

The Commission’s preliminary concerns

The preliminary investigation indicates that the transaction may significantly reduce competition on the already highly concentrated SURF services market for oil and gas and CCS projects.

In particular, the Commission preliminarily found that:

• Saipem and Subsea7 are two of the three leading suppliers in the world, and the merged entity would have high market and capacity shares in these markets;
• Saipem and Subsea7 compete closely with each other, especially regarding the most complex and remunerative projects;
• With only one comparable competitor remaining, the other possible rivals seem to be considerably smaller and limited in their ability to compete across the board;
• Spare capacity is limited, and barriers to entry and expansion are very high in this capital-intensive industry, which is partly explained by the substantial investments linked to the highly sophisticated vessels needed, especially for the most complex projects;
• While customers are in many cases sophisticated and large players notably active in the oil and gas sector, they may not be able to resist price increases in the absence of sufficient credible alternative suppliers.

Consequently, the transaction may lead to the loss of significant competition in the market for SURF services, possibly with higher prices and reduced innovation as a result. During its in-depth investigation, the Commission will also examine whether the transaction may give rise to coordinated effects in these markets.

The Commission will also assess whether the transaction may lead to competition concerns in other, closely related markets, such as the markets for trunkline services, which involves the laying of larger export pipes, and for the decommissioning of obsolete subsea infrastructure, which appears to require similar vessels and capabilities as their installation. The Commission will also further investigate whether the transaction gives rise to anticompetitive vertical or conglomerate effects.

The Commission will now carry out an in-depth investigation into the potential effects of the transaction to determine whether its initial competition concerns are confirmed.

The proposed transaction was notified to the Commission on 16 June 2026. The Commission now has 90 working days, until 26 November 2026, to take a decision.

The opening of an in-depth investigation does not prejudge its outcome.

Companies and products

Saipem, headquartered in Italy, is an engineering and construction company, active worldwide in the energy infrastructure and services sector. It provides engineering, procurement, construction and installation (“EPCI”) services for both offshore and onshore energy projects. For offshore projects, that includes SURF and conventional developments, offshore wind projects and CCS infrastructure.

Subsea7, listed on the Oslo stock exchange and headquartered in Luxembourg, is a global provider of offshore EPCI services. It specialises in subsea infrastructure, including SURF projects, conventional offshore developments, offshore wind projects and CCS infrastructure.

Merger control rules and procedure

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the EU Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the European Economic Area or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

In addition to the current transaction, there are currently three ongoing phase II merger investigations: the proposed acquisition of Anglo American’s nickel business by MMG; the proposed acquisition of joint control of TERCAT by TIL and Hutchison PortsT and the proposed joint venture between UPM and Sappi.

For more information

More information will be available on the Commission’s competition website, in the public case register under the case number M.12236.