The competition and market watchdog has raised competition concerns about the merger of two helicopter companies.
The Competition and Markets Authority (CMA) has investigated the purchase of Babcock’s Aberdeen-based aviation division earlier this year by the CHC Group.
Both Babcock and CHC provide offshore transportation in the oil and gas sector, taking workers to and from rigs in the North Sea, but the fact that they make up two of four suppliers in this field - competing against each other regularly to win contracts - means the CMA is concerned that the loss of one of them could lead to higher prices and lower quality services.
CHC must now submit proposals to address CMA’s concerns within five working days. If these concerns are not allayed, it will mean that the merger will be subject to an in-depth 'phase two' investigation.
The companies reported on 1 September that they had completed the £10m deal, which was first announced in March.
Colin Raftery, CMA senior director, said: “Our investigation showed that CHC’s purchase of the Babcock Business would take out an important competitor.
“While oil and gas exploration in the North Sea is expected to decline over time, these are safety-critical services on which customers continue to spend hundreds of millions of pounds a year.
“It is therefore important that this deal is subject to more detailed scrutiny if our concerns aren’t addressed.”
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