CMA Refers CHC Deal for In-Depth Investigation

CMA Refers CHC Deal for In-Depth Investigation
In September, CHC Helicopter Group announced the completion of its acquisition of Babcock International's offshore oil and gas aviation business.

The UK Competition and Markets Authority (CMA) has referred the completed acquisition by CHC Group LLC of Offshore Helicopter Services UK Limited, Offshore Services Australasia Pty Ltd and Offshore Helicopter Services Denmark A/S for an in-depth investigation.

The CMA outlined that the referral was made on the basis that, on the information currently available to the organization, it is or may be the case that this merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the UK. On November 18, the CMA warned that the merger would be referred for a phase 2 investigation unless the parties offered acceptable undertakings to address competition concerns.

In September, CHC Helicopter Group announced the completion of its acquisition of Babcock International’s offshore oil and gas aviation business. The company noted at the time that Babcock International’s operations in the UK, Australia and Denmark would be held separately and operate independently from CHC while it sought approval from the relevant competition authorities in the UK and Australia.

In the company statement in September, CHC said the deal reinforced its global position, increased its offshore crew transportation capacity and expanded its fleet by around 30 aircraft across the UK, Denmark and Australia.

Babcock revealed in September that the sale was completed for a cash consideration of $13.3 million (GBP 10 million). For the year ending March 31, its oil and gas aviation business had revenue of $205.4 million (GBP 154 million), a loss before tax of $2.6 million (GBP 2 million) and underlying operating profit of $2.6 million (GBP 2 million), Babcock outlined. The company said the sale was part of its targeted disposal program, which aims to generate at least $533.7 million (GBP 400 million) of proceeds.

To contact the author, email andreas.exarheas@rigzone.com


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