EU Investigates Subsea 7 and Saipem Merger as Stocks Decline

Subsea 7 shares on the Oslo Børs fell following the announcement that the European Commission has opened an investigation into the company’s proposed merger with Saipem. The regulatory probe focuses on whether the deal would create a monopoly or stifle competition in the subsea oil and gas service market, according to reporting from Dagens Næringsliv and Finansavisen.

The European Commission’s decision to scrutinize the transaction introduces a layer of regulatory risk that investors are now pricing into the stock. Finansavisen reports that the investigation is not limited to Europe, as the merger faces scrutiny across four continents, which may negatively impact share prices due to increased uncertainty regarding the deal’s completion.

European Commission probes Subsea 7 and Saipem merger

The European Commission is investigating the “giant merger” between Subsea 7 and Saipem to determine if the combined entity would hold an unfair market advantage. According to Finansavisen, the primary concern for regulators is the potential for a monopoly in the specialized sector of subsea installation and construction.

Dagens Næringsliv notes that the opening of this official investigation increases the uncertainty surrounding the timeline and the eventual outcome of the merger.

Saipem reduces guidance ahead of merger

Adding to the market volatility, Saipem has lowered its financial guidance. Finansavisen reports that the company cut its projections shortly before the merger process with Subsea 7 progressed, a move that has contributed to the downward pressure on the stocks involved.

This development coincided with the news of the European Commission’s probe, compounding the negative sentiment among investors on the Oslo Børs.

Market reaction on the Oslo Børs

Subsea 7 shares reacted negatively to the combination of regulatory scrutiny and Saipem’s lowered guidance. E24 reports that the stock price fell as the market weighed the risk of the merger being blocked or delayed by antitrust authorities.

Finansavisen highlights that the fear of monopoly is a primary driver for the current stock decline, as the market anticipates a prolonged legal and regulatory battle across multiple jurisdictions.