By Nicholas Earl
The Competition and Markets Authority (CMA) has raised concerns over Baker Hughes’ proposed acquisition of Altus.
The watchdog fears the deal could result in oil and gas operators in the UK facing inferior terms for well intervention services.
Well intervention services are essential services used by oil and gas operators to manage well production, provide well diagnostics and modify a well’s state or configuration.
Both Baker Hughes and Altus supply various well intervention services in the UK, including to operators on the UK ‘s continental shelf.
The CMA’s Phase 1 investigation found that Baker Hughes and Altus are the two largest providers of both coiled tubing and pumping services in the UK and compete very closely in the supply of these services currently.
After the deal, Baker Hughes would face competition from only one other major supplier – Halliburton – and a small number of other suppliers that are much weaker competitors in the UK.
Consequently, the CMA is concerned that the loss of rivalry between the merging companies could lead to higher prices, reduced choice and lower quality services for businesses in the UK that purchase coiled tubing and pumping services.
Colin Raftery, senior director of mergers at the CMA, said: “Our investigation showed that Baker Hughes’ purchase of Altus would take out an important supplier and few remaining competitors would be left in the market. We will move to an in-depth investigation unless the companies can address our concerns.”
Baker Hughes and Altus have five working days to submit proposals to address the CMA’s competition concerns.
The CMA would then have a further 5 working days to consider whether to accept these in principle instead of escalating the issue, by referring the case to a Phase 2 investigation.
The post CMA raises consumer concerns over proposed Baker Hughes-Altus deal appeared first on CityAM.
