On 6.23.2026, GS cleared, without restrictions, the merger between two of the leading service providers of services associated with the offshore production of oil and natural gas, Saipem and Subsea7 – a transaction that will result in the creation of Saipem7. In clearing the transaction, the GS recognized that the profile of the customers (mostly oil and gas companies) would be able to discipline market participants’ behavior.
The analysis of the transaction was marked by intense debates between the applicants and other industry agents, particularly regarding the definition of the market for the installation of SURF system components (subsea umbilical, risers and flowlines), infrastructure used to connect subsea hydrocarbon production and processing systems to oil and gas platforms.
According to GS, the main competition concerns arising from the transaction are concentrated in the deepwater SURF installation segment. Although the transaction results in approximately 40% market share in terms of installed capacity, the GS concluded that this figure alone would not be sufficient to indicate competition risk. This is because the significant available capacity and the level of idle capacity observed in the sector would mitigate risks of the merged entity exercising market power. In addition, the GS highlighted that the profile of the parties’ customers would enable them to discipline the supplier’s behavior through strategies such as chartering vessels for extended periods to conduct SURF installations thereby limiting the possibility of charging supra-competitive prices.
Despite GS’s approval, the review of the transaction has not yet been concluded. On 07.09.2026, the Brazilian Association of Oil and Gas Exploration and Production Companies (ABEP) and Petrobras appealed the decision, arguing that the transaction would generate more significant competitive effects than those identified by the GS. The appellants requested that the transaction be blocked or, alternatively, that structural and behavioral remedies be imposed.
The case deserves attention beyond the transaction itself, as it highlights an interesting issue in merger review: to what extent can purchasing power offset elevated levels of concentration among suppliers? In clearing the transaction, GS placed weight on the ability of key customers to discipline the behavior of the merged entity. Petrobras’ appeal, however, shows that the actual extent of that disciplining power remains a matter of debate.
Under the rapporteurship of Commissioner Camila Cabral, it will now be up to CADE’s Tribunal to decide whether to uphold or overturn the GS’ findings, and, potentially, indicate what evidence it deems necessary to recognize purchasing power as an effective mitigating factor against market power.
Want to understand how these topics impact your business? Our Competition and Antitrust team is ready to help you navigate them.
