Business
Petrobras & Others Urge Cade to Safeguard Competition in Subsea Market
Petrobras & Others Urge Cade to Safeguard Competition in Subsea Market
About this update from Saipem S.p.a.
Per Reuters, Petróleo Brasileiro S.A. - Petrobras PBR, one of the largest integrated energy firms in Brazil, alongside Exxon Mobil Corporation XOM and TechnipFMC plc FTI, has petitioned Brazil’s antitrust regulator Cade to closely examine the proposed merger between Norway-based Subsea 7 S.A. SUBCY and Italy-based Saipem.Concerns Over Market ConcentrationCompetition is considered a crucial factor in ensuring innovation, fair pricing and reliable services in Brazil’s energy sector. However, the merger between Subsea7 and Saipem, which is set to create a new company called Saipem7, poses risks of excessive concentration in subsea oil and gas services. Nearly half of the vessels available for Petrobras’ subsea engineering, procurement, construction and installation contracts already belong to Subsea7 and Saipem, and therefore, such consolidation could drive up costs, limit options and undermine competition in projects vital to the company’s operations.ExxonMobil, a U.S.-based integrated energy firm, also warned that the merger would create a heavy concentration of contractors in the subsea umbilicals, risers and flowlines segment, potentially limiting competition and reducing customer options.TechnipFMC, one of the leading manufacturers and suppliers of products, services and fully integrated technology solutions for the energy industry, added that the deal could all but eliminate opportunities for rival companies to participate in Brazil’s public tenders.Terms of the Subsea7 & Saipem MergerIn July 2025, Saipem and Subsea7 signed a binding merger agreement, formalizing the terms outlined in their memorandum. The merger will form Saipem7, a new global energy services leader, with projected revenues of about €21 billion and a combined backlog of €43 billion. Saipem7 will leverage its complementary strengths in geography, technology and fleets, with no single country accounting for more than 15% of its backlog, ensuring a diversified global presence. Shareholders of Saipem and Subsea7 will each hold 50% of the new entity, with Subsea7 investors receiving 6.688 new Saipem shares for each Subsea7 share they hold. The merger is expected to deliver annual synergies of roughly €300 million, creating significant value for shareholders. Both companies stress the deal’s strategic value in meeting the demands of increasingly large and complex client projects.Safeguardin...