Brazil clears Saipem–Subsea7 merger with Seven Borealis sale condition

Brazil’s competition authority Cade approved the proposed merger between Saipem and Subsea7 on November 4, subject to commitments intended to preserve competition for deepwater subsea projects.

​The companies have committed to selling Seven Borealis to address the authority’s concerns. The agreement includes provisions to protect the execution of projects already contracted for the vessel.

​According to Ulstein’s original vessel specifications, Seven Borealis measures 182.2 metres in length and 46.2 metres in beam, with S-lay and J-lay capabilities and a main crane rated for lifts of up to 5,000 tonnes over the stern at a 40-metre radius.

​For Brazil, the competition issue concerns SURF EPCI contracts: engineering, procurement, construction and installation of subsea umbilicals, risers and flowlines.

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Cade found that Saipem and Subsea7 compete closely for these projects. Although other contractors operate internationally, vessel specifications, existing commitments, mobilisation costs and project schedules can restrict the alternatives available for a particular Brazilian tender.

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The authority also recognised Petrobras’ negotiating experience, while stressing that customer bargaining power depends on having credible suppliers available.

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Under the agreement, the vessel must be transferred to an independent buyer approved by Cade. Complementary obligations are intended to enable that buyer to compete for SURF EPCI work. The commitments also include monitoring, restrictions on reacquiring the vessel and participation by the combined company in Brazilian deepwater SURF tenders.

​The companies’ case for the merger rests on combining technologies, geographical coverage and fleets, while improving vessel utilisation, procurement and capital allocation.

​The transaction was first announced in February 2025, followed by a binding merger agreement in July. The proposed structure would absorb Subsea7 into Saipem, with the combined parent renamed Saipem7, headquartered in Milan and listed in Milan and Oslo.

​The companies have estimated approximately €300 million in annual cost and capital expenditure synergies from the third year after completion. Following the Brazilian decision, Saipem said the vessel sale would not materially change the transaction’s strategic rationale and confirmed the previously announced synergies.

​Those are expected benefits of integration. Cade’s conditions address the risk that combining two close competitors could weaken competition for Brazilian contracts.

​The Brazilian clearance remains conditional on compliance with the agreement. The November 4 announcement does not represent completion of the merger or the vessel sale, and the companies continue working to satisfy the remaining transaction conditions.

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