A formal inquiry has been launched by the competition watchdog into the merger of CHC and Babcock helicopters.
The Competition and Markets Authority (CMA) has until November 18 to decide whether to clear the combination of the two businesses or refer it to a further investigation.
During the phase 1 inquiry, the competitions regulator will be assessing whether the move will “result, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.
An initial enforcement letter was issued in June which marked the launch of the CMA’s involvement, but not yet a formal investigation.
Earlier this month, Babcock announced the £10m sale of its Aberdeen-headquartered helicopter business had been “completed”, however the CMA process has remained ongoing.
The CMA granted several derogations in the meantime to allow certain elements of the deal to proceed, such as CHC making the payments strictly necessary to become the parent guarantor of Babcock Offshore.
Other elements include extending CHC’s insurance coverage to Babcock operations, assistance with cash flow, major incident assistance if required and liaising on employee benefits.
To ensure the business operates “separately and independently”, Babcock has also been rebranded as “Offshore Helicopter Services UK Limited”.
The £10million deal between CHC and Babcock was announced by the latter as “completed” on September 1, however the CMA said its process remains ongoing.
The watchdog has power to review the merger even after the deal is complete.
Babcock and CHC first announced the deal, covering around 500 employees, in March.
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