The European Commission has opened an in-depth investigation into the proposed merger between Saipem and Subsea7 to form a new company called “Saipem7.”
The Commission is concerned the deal could significantly affect competition in some offshore engineering and construction service markets, even though its initial assessment found the companies’ activities are largely complementary in areas such as offshore wind projects and “conventional” offshore projects, it said in a release on Wednesday.
Its main focus is the market for SURF services — short for subsea umbilicals, risers and flowlines — which are pipes and cables installed on or near the seabed to connect offshore wells, often thousands of metres underwater, to production facilities at the surface.
The Commission noted that SURF services are also used in carbon capture and storage (CCS) projects, where carbon dioxide (CO₂) emissions are captured at industrial sites, transported through pipelines and stored permanently in geological formations, often beneath the seabed.
New findings from the Commission’s initial review indicate the global SURF services market is already highly concentrated, with Saipem and Subsea7 two of the three market leaders and “very few credible alternatives.”
Why the Commission is concerned
The Commission’s preliminary view is that the merger could reduce competition in the SURF services market for oil and gas, as well as CCS projects.
It said the combined business would have high market and capacity shares, and that Saipem and Subsea7 compete closely — particularly on the most complex projects.
With only one comparable competitor remaining after the merger, other rivals appear smaller and more limited in their ability to compete broadly.
The Commission also pointed to limited spare capacity and high barriers to entry and expansion in the industry, citing the substantial investment needed for highly specialised vessels used in complex offshore work.
It also said that even though customers are often large and sophisticated companies, they may not be able to resist price rises without sufficient alternative suppliers.
The Commission added it will also assess whether the deal could raise competition issues in related markets, including “trunkline” services — the laying of larger export pipelines — and the decommissioning of obsolete subsea infrastructure, which it said can require similar vessels and capabilities.
The proposed transaction was notified to the Commission on 16 June 2026, and the Commission has 90 working days — until 26 November 2026 — to make a decision.
Saipem is headquartered in Italy, while Subsea7 is listed on the Oslo stock exchange and headquartered in Luxembourg.
