UK competition authority moves CHC-Babcock to Phase 2

UK competition authority moves CHC-Babcock to Phase 2

29-Nov-2021 Source: HeliHub.com

The UK Government’s Competition and Mergers Authority (“CMA”) has referred the completed acquisition by CHC Group LLC of Offshore Helicopter Services UK Limited (“OHS”), Offshore Services Australasia Pty Ltd and Offshore Helicopter Services Denmark A/S for an in-depth investigation.  The latter three companies were previously named Babcock Mission Critical Services Offshore Limited, Babcock Offshore Services Australasia Pty Ltd, and Babcock Denmark A/S respectively.

The date of reference for the inquiry is today, 29 November 2021, and the inquiry has a statutory deadline of 15 May 2022.  The CMA has appointed a board to investigate the situation consisting of the following:- Kip Meek (Chair), Juliet LazarusCyrus Mehta, and Karthik Subramanya.

The current situation continues to be that CHC and OHS have to continue trading at arms length, and thus cannot interfere in the running of each other’s businesses, even though CHC has technically bought OHS.  This situation has to continue until Phase 2 of the inquiry has reported its findings.

On 18th November we reported that the CMA had raised concerns at the deal and given CHC five working days to respond to particular matters.  It is HeliHub’s understanding that CHC did not respond in the required timescale, thus moving the inquiry to Phase 2.  While the official line is that this creates a further period of nearly six months for the inquiry team to investigate and report, this also creates a longer period for CHC to come up with a plan with which they would hope to sidestep the Inquiry recommendations.

This could, for example, see some aspects of the merged operation being passed to another operator (other than their current competitors, Bristow and NHV) in order to maintain the CMA’s seemingly preferred model of four offshore operators in the UK.    In their own words:- “The CMA has decided, on the information currently available to it, that it is or may be the case that this merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.”

 

 

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