Prosafe and Floatel, owners of the world's two living platforms on the sea, have recently postponed the proposed merger due to skeptical opposition from British and Norwegian antitrust agencies.
According to a statement issued by Prosafe on January 2, Prosafe and Floatel have agreed to extend the termination date of the equity acquisition agreement from December 31, 2019 to June 30, 2020.
Prosafe and Floatel announced in June 2019 that they would merge their businesses. According to the equity acquisition agreement reached between the two parties at that time, Prosafe will acquire Floatel's shares at a consideration, and Floatel's major shareholder will become a major shareholder of Prosafe. After the merger is completed, Prosafe and Floatel shareholders will own 55% and 45% of the new company's shares on a fully diluted basis, respectively.
The merger of the two companies will create the world's largest offshore life platform company. Prosafe owns and operates 9 living platforms, each of which can provide accommodation for 300 to 500 people. In addition, 2 new living platforms can be delivered within the next 5 years. Floatel's fleet has five living platforms, each of which can provide accommodation for 440 to 550 people.
Fearing that the merger could lead to a lack of competition due to market monopolies, UK and Norwegian competition regulators have questioned the merger deal last year. The UK's Competition and Markets Authority (CMA) believes that if the merger, Prosafe and Floatel's customers will face higher prices or lower quality bids due to insufficient competition when conducting tenders for offshore living platforms. The CMA therefore decided to conduct a more in-depth second-stage investigation, which is expected to reach a conclusion in the first quarter of this year.
In addition, in October last year, the Norwegian Competition Authority announced its rejection of the merger of Prosafe and Floatel, arguing that the merger would lead to higher costs for customers of marine accommodation services. In response, Prosafe appealed the Norwegian Competition Authority's decision in November last year, saying it will continue its efforts to obtain permits in Norway and the United Kingdom.
In addition to obtaining antitrust clearance, Prosafe also said that the merger with Floatel would also require lender approval and approval of the Prosafe interim shareholder meeting. (source from eworldship.com)
