Baker Hughes’s takeover of Altus Intervention could lead to “higher prices, reduced choice and lower quality services” in the UK oil and gas sector, competition authorities have warned.
The Competition and Markets Authority (CMA) launched a probe into the deal in August to examine whether it would negatively impact the UK wells services market.
It has now found that, should the deal go ahead, Baker Hughes would only face competition from one other major supplier – Halliburton.
The firm would also have competition from “a small number of other suppliers that are much weaker competition in the UK”.
Baker Hughes signed the deal to acquire wells specialist Altus Intervention in March – which employs around 1,200 people globally, including more than 500 in Portlethen near Aberdeen.
The CMA said it is concerned that the loss of rivalry could impact prices, reduce choice and lower quality services for UK firms that purchase coiled tubing and pumping services.
Senior director of mergers, Colin Raftery, said: “Well intervention services are an integral part of managing oil and gas wells. Competition is vital to avoid higher prices or poorer quality of services for oil and gas operators active in the UK.
“Our investigation showed that Baker Hughes’s purchase of Altus would take out an important supplier and few remaining competitors would be left in the market. We will move to an in-depth investigation unless the companies can address our concerns.”
Baker Hughes has five working days (from yesterday) to address the CMA’s concerns.
The authority will then consider whether to refer the deal to a more in-depth “Phase 2” investigation, which typically lasts around 24 weeks.
Headquartered in Norway, Altus operates in 11 countries including the UK.
Altus Intervention was established in 1980 and went on to set up bases in areas including the US and the Middle East.
Accounts published on Companies House show that the firm’s Portlethen base had an average of 536 employees in 2020.
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