Brazil's competition watchdog CADE has approved, without restrictions, the proposed merger between Italy's Saipem and Norway's Subsea 7, clearing the way for the two offshore engineering and installation contractors to form a combined business to be called Saipem7.
Shares in both companies reacted to the decision, rising by as much as 4% on Wednesday before giving back part of those gains. At 04:08 ET (08:08 GMT) Saipem was trading down 0.77% at 4.4860, while Subsea 7 was maintaining modest upside of 0.23% at NOK 343.60.
Regulatory clearance and remaining challenges
CADE's general superintendence signed off on the transaction unconditionally. That clearance does not eliminate the possibility of further legal or administrative actions: opponents to the merger, including ExxonMobil, Petrobras and TotalEnergies, retain the right to appeal the decision. Those parties have argued that the combined firm could wield pricing power, potentially raising costs for customers and seeking to lock clients into exclusive long-term contracts.
Related asset sale by Saipem
In a separate development, Saipem has reached an agreement to sell its shallow-water drilling operations in Saudi Arabia to ADES for $285 million in cash. The Italian contractor said the transaction aligns with a strategic shift toward deepwater and harsh-environment offshore drilling activities.
The unit being divested operates five jack-up rigs and reported revenues of approximately $170 million in 2025. Saipem and ADES expect the sale to close by the third quarter of 2026, subject to customary regulatory approvals.
Key takeaways
- CADE granted unconditional approval to the proposed merger of Saipem and Subsea 7 to form Saipem7.
- Share prices in both companies initially rose up to 4% after the announcement but later pared gains; Saipem was trading down 0.77% at e4.4860 and Subsea 7 up 0.23% at NOK 343.60 as of 04:08 ET (08:08 GMT).
- Saipem has agreed to sell its Saudi shallow-water drilling business to ADES for $285 million, a unit that operates five jack-up rigs and recorded about $170 million of revenue in 2025; the deal is expected to close by Q3 2026 pending regulatory clearance.
Risks and uncertainties
- The CADE approval can be appealed by stakeholders including ExxonMobil, Petrobras and TotalEnergies, which could delay or complicate the merger process - affecting the offshore services and energy services sectors.
- Regulatory approvals remain outstanding for Saipem's sale of its Saudi shallow-water drilling operations, so the timing and completion of that cash deal are subject to potential regulatory review - a risk for the offshore drilling market and regional service providers.
Market participants will continue to monitor any appeals and the progress of the divestment as the companies and their clients assess how the combination and Saipem's strategic refocus might alter competitive dynamics in offshore engineering, installation and drilling markets.