CADE Reaches Agreement and Approves Merger Between Saipem and Subsea7

The Administrative Council for Economic Defense (CADE) approved today (4 November 2026) the merger between Saipem and Subsea7, subject to the signing of a Merger Control Agreement (ACC). The transaction involves a strategic market for oil and gas exploration and production in deepwater and ultra-deepwater environments, particularly in Brazil’s pre-salt fields.

Among other segments, the companies operate in the installation of subsea systems that connect wells and equipment on the seabed to production units, enabling the transportation of resources extracted from reservoirs to the surface. It was in this segment that CADE’s review identified competition concerns.

Known by the acronym SURF, these systems are essential to major offshore projects and require specialised engineering, advanced technology and vessels capable of operating under highly complex conditions. Projects encompassing the engineering, procurement, construction and installation of these systems are known as SURF EPCI.

To preserve competition in SURF EPCI, the agreement establishes, as its main commitment, the divestiture of a specialised rigid pipelay vessel to an independent purchaser, subject to CADE’s prior approval. Approval of the transaction is conditional upon full compliance with the agreement.

A Strategic Sector for Brazil’s Pre-Salt and National Development

The availability of companies and vessels capable of carrying out subsea projects has a direct impact on the costs, timelines and feasibility of implementing new oil and gas production systems. The importance of these services reflects the role of the pre-salt fields in Brazilian production and their contribution to energy supply, exports, public revenues, and the development of a supply chain and technological capabilities.

New oil discoveries further underscore the importance of subsea infrastructure. Once the development of a field is deemed economically viable, turning reserves into actual production depends on large-scale investments and the availability of suppliers capable of providing solutions suited to the technical characteristics of each project.

In this context, preserving competition in the procurement of these services helps ensure that producers have alternatives, encourages efficiency and supports the investments required to develop Brazil’s oil and gas production.

Competition Analysis in Procurement Processes

The opinion issued by the reporting Commissioner, Camila Cabral Pires Alves, examines how companies compete for major contracts in the sector. These are known as bidding markets, in which competition takes place through tenders or other procurement procedures.

Drawing on academic literature, CADE’s guidelines and domestic and international precedents, the opinion explains that the mere existence of a tender does not, in itself, guarantee effective competition. It is necessary to assess which companies have both the ability and the incentives to submit competitive bids and execute projects under the conditions and within the timelines required by customers.

The analysis examined data on global capacity to meet demand, taking into account technical differences between projects, the availability of specialised vessels and the actual conditions under which those assets could be mobilised to Brazil. It also considered demand prospects and the compatibility between vessel availability periods and the windows scheduled for project procurement and execution.

Although other relevant suppliers operate in the market, including TechnipFMC, McDermott and Allseas, their ability to provide competitive alternatives varies according to the characteristics of each procurement process. Vessels that are technically suitable may already be committed to other projects, while differences between project schedules and vessel availability windows may limit the simultaneous participation of competing suppliers. In addition, the mobilisation of international vessels depends on economic, logistical and operational conditions that do not always make their deployment in Brazil feasible.

The review therefore found that Saipem and Subsea7 are close competitors, both in terms of their competitive capabilities and their participation in tenders. The analysis showed that, despite the presence of other operators and vessels in the global market, the number of suppliers effectively capable of competing on comparable terms may be limited, given the technical requirements of the projects, asset availability and execution windows. The competition concern thus stems from the elimination of rivalry between two significant and closely competing suppliers, potentially reducing competitive pressure in procurement processes that are strategic to the development of Brazilian oil fields, particularly in deepwater and ultra-deepwater environments.

Internal Documents and International Cooperation

The supplementary investigation conducted by the reporting Commissioner’s office expanded the information available for the review. The work brought together procurement data, bids, negotiation records, customer submissions and the companies’ internal documents, with technical support and cooperation from foreign authorities.

Internal documents played a prominent role. Presentations, planning records and assessments of competitors made it possible to compare the arguments submitted to CADE with the information that informed the companies’ business decisions.

The analysis examined how the companies selected the projects they intended to bid for, planned the use of their vessels and assessed their competitors.

Customer Bargaining Power and Claimed Efficiencies

The opinion acknowledges Petrobras’s experience in negotiating terms, reorganising projects and attracting suppliers. It nevertheless points out that a customer’s bargaining power depends on the alternatives available to it. Rejecting a bid or postponing a project does not necessarily create another supplier capable of carrying it out within the desired timeframe.

The analysis also considered the efficiencies claimed by the companies, such as improved fleet utilisation. It assessed the substantiation of these efficiencies and whether they could be passed on to Brazilian customers to an extent sufficient to offset the reduction in competition.

Commitments Under the Agreement

The agreement provides for the divestiture of a specialised pipelay vessel capable of operating on projects at depths exceeding 1,500 metres, including in Brazil’s pre-salt fields. The identity of the asset remains subject to restricted access.

The aim is to enable an independent supplier to compete for projects involving the engineering, procurement, construction and installation of subsea systems, known as SURF EPCI.

The opinion highlights the importance of prior approval of the purchaser and of monitoring the implementation of the agreement. The assessment of the commitments takes into account the principles set out in CADE’s Antitrust Remedies Guidelines, with particular attention to the suitability of the measures, their feasibility and the mechanisms for monitoring compliance.

The divestiture is accompanied by complementary obligations designed to enable the purchaser to use the vessel to compete in SURF EPCI projects, as well as mechanisms to monitor compliance with the agreement.

The agreement also establishes a commitment for the merged entity to participate in tenders for SURF projects in deepwater areas in Brazil. This behavioural measure complements the divestiture and seeks to further safeguard competition in Brazilian procurement processes.

The agreement also includes commitments not to reacquire the vessel and measures to ensure the continuity of projects already contracted for the asset, thereby preventing the transfer from adversely affecting customers.

Contributions to CADE’s Enforcement Practice

The opinion highlights the importance of examining the actual conditions of competition in markets organised around major contracts. Market shares are assessed alongside suppliers’ capabilities, their decisions on whether to participate in procurement processes and the alternatives effectively available to customers.

This approach raises broader questions about the scope of traditional competition assessment criteria and provides input for the further development of CADE’s guidelines, including its Guidelines for the Analysis of Horizontal Mergers (Horizontal Merger Guidelines).

Merger Case No. 08700.008758/2025-77