Life has changed dramatically within the past two years, especially in the shipping industry. One would wonder if the world would ever get back to ‘normal’ With unforeseen world conflicts leading to further inflation. As inflation pushes families to live pay-check by pay-check, resulting from the current shipping of wheat and the significant rise in petrol prices.
The UK Competition and Markets Authority verified some reservations with the proposed merger of Noble Corporation and Maersk Drilling. The two companies, previously competitors, expressed the need to merge due to the “recurring struggle in the offshore drilling industry.”
Noble Corporation and Maersk Drilling ignored potential concerns and referred to the worsening industry thorough justifying their merger. They said they believed the combination of both companies would create a company with the scale, capabilities, and resources to address a changing market.
With Noble Corp. based in the US and Maersk Drilling located in Copenhagen, many see potential in the merger. With both drilling companies on opposite ends of the world, the prospect of power is seemingly unmatched. Maersk Drilling’s Chairperson, Claus V. Hemmingsen, commented on the merger, “The combination of Maersk Drilling and Noble rests on a strong industry logic, and I remain convinced that the new company will be a unique and unmatched player in the offshore drilling market.”
Last month the CMA raised a similar flag. However, they effectively halted combining two of the largest makers of cargo handling equipment for ports, Cargotec and Konecranes, citing worries about reduced competition.
Maersk Drilling and Noble are two of the CMA calls four primary service providers in the North Sea. After completing a Phase 1 investigation in February 2022, The CMA said it is concerned that the combined businesses would not face sufficient competition after the merger. With the fear of a drilling monopoly looming and a lack of access to Russian petrol, The UK Competition and Markets Authority justified their concerns by saying they believed the merger could reduce competition and increase operating costs for oil and gas producers in the North Sea.
With five days left to escalate concerns about the merger, one is left to wonder if the UK Competitors and Markets Authority planned to voice their concerns last minute to stop the union from happening; one might also question why they waited to investigate until February 2022 when the proposal came out in November 2021. In past interviews, the companies expressed how they expected the UK authority to raise concerns; now, they only have five days to put out the fires the UK Competitors and Markets authority started, which is extremely unlikely.
