The UK’s Competition and Markets Authority (CMA) is to examine whether Baker Hughes’ acquisition of wells services firm Altus Intervention meets merger regulations.
The services giant announced in March that it would buy Norway-headquartered wells specialist Altus for an undisclosed sum, with a view to integrating the business into its oilfield services segment.
Baker Hughes (NASDAQ:BKR) pointed to the company’s ability to help operators enhance production from mature oil and gas fields as a particular motivation for the deal.
However, the CMA has now said it will investigate whether the proposed deal – set to be conducted by the services group’s Dutch unit, Baker Hughes Nederland Holdings B.V. – meets the provisions of the Enterprise Act 2002 and whether this may result in a lessening of competition within the UK market.
The CMA issued its notice on Tuesday 28 September, offering any interested parties the invitation to comment by 11 October.
Under statutory timelines, it must therefore reach a decision on whether to refer the merger for a further ‘Phase 2’ investigation by 22 November 2022.
Established in Norway in 1980, Altus employs around 1,100 people globally with operations across 11 countries and four key regions: UK & West Africa, Norway & Denmark, Americas and Middle East & Asia Pacific.
Its staff base includes more than 500 workers in Portlethen, near Aberdeen.
Speaking at the time of its acquisition announcement, Baker Hughes executive vice president Maria Borras, said the addition would support the group’s strategy to transform core oil and gas operations by enhancing technological capabilities and providing customers with higher-efficiency solutions.
“We value the Altus Intervention team’s deep expertise and look forward to bringing these fully integrated well intervention solutions to our global customer base,” she said.
The deal had been expected to close in the second half of 2022, though it remains to be seen whether the CMA’s probe will result in any delays.
Baker Hughes was asked at the time to confirm whether any overlap or redundancies can be expected for the workforce. A spokesperson said: “Altus Intervention’s technologies and solutions are complementary to our portfolio. We are working on integration planning and will have more information to share after closing.”
The investigation is the latest in a series within the oil and gas market this year which have probed high-profile deals, including CHC’s takeover of Babcock’s helicopter operations, and the merger of offshore drilling providers Maersk Drilling and Noble Corporation.