The European Commission said
on Thursday it had opened an in-depth four-month investigation into plans by Norway's Aker Maritime ASA
to buy a 26.7 percent stake in Anglo-Norwegian engineering firm Kvaerner (KVAER.OL)
"The Commission's initial investigation has shown that the transaction may create or strengthen a dominant position on the markets for contracts for construction of oil and gas platforms (EPCI contracts) as well as the modification and maintenance of such platforms," the Commission said in a statement.
It said the combined company would have a high market share in both markets particularly on the Norwegian Continental Shelf of the North Sea.
"In the course of its in-depth investigation, the Commission will further analyze the scope of the geographical market in particular with regard to ECPI contracts in order to better examine the competitive effects of the transaction," the statement said.
The statement continued to reveal that the Commission would also study "the strategic position of the oil companies as the customers in the relevant markets."
The Commission said Aker Maritime had offered to divest some businesses to enhance competition on both markets, but that these undertakings were unsatisfactory.
It said they did not address the concerns in the platform construction market on the Norwegian Continental Shelf.
It was also not clear how the assets divested would have created a viable stand-alone business for a competitor in the maintenance market to be able to seriously challenge Aker Maritime/Kvaerner's position.
The decision now lies within the hands of the Commission, which has a maximum of four months to make its final ruling. It rarely blocks mergers and acquisitions, but often demands concessions, normally asset sales, to deal with competition problems before letting difficult deals go ahead.