Aker opts for smaller share in Kværner buy-in

LONDON�Aker Maritime AS Tuesday opted to take to a reduced interest in arch rival Kværner AS in light of the European Commission (EC) decision last week to begin an "in depth" investigation of the Norwegian contractor's plans to purchase 26.7% of shares in its compatriot.

Through the buy-in, under which the company will acquire 17.8% of shares in Kværner, Aker will become Kværner's largest shareholder, but will not have a controlling interest in the company.

The EC had elected to extend its study of a possible combination of the two contractors by a further 4 months, supporting its decision to delay judgement on the grounds that it was still unconvinced such a buy-in might would not prove anti-competitive to Norwegian North Sea contracting markets.

Under the revised share deal, Aker will acquire some 11.6 million Kværner shares from the shipowner Bergesen AS on Dec. 19, and a further 7.4 million through the exercise of options 3 days later. The remaining 9.5 million shares that Aker had the option to acquire will now be sold, in keeping with an agreement reached between Aker and the EC.

The EC said in a statement that the measures taken by Aker ensured the contractor would "not acquire control" of Kvaerner, adding that "in view of the structure of the notified transaction, [it] therefore considered this to be sufficient for Aker's withdrawal of the notified take-over and would not take any further action."

The initial EC investigation in to Aker�s proposed share acquisition, first announced by the Norwegian contractor in July, found that the �transaction [might] create or strengthen a dominant position on the markets for contracts for construction of oil and gas platforms as well as the modification and maintenance [and operations] of such platforms.�

�The combined [Aker]-Kværner would have a high combined market share in both markets, particularly on the Norwegian Continental Shelf of the North Sea,� the EC said in a statement.

In an earlier statement, Aker said, �On the basis of detailed information and a thorough evaluation [we are] of the opinion that a possible combination with Kværner will not adversely effect competition in any market,� stressing that it had already provided the EC with �extensive documentation� on its position.

Aker said it would nonetheless continue �discussing with the commission how it should proceed� while the EC�s investigations were ongoing.

Aker had notified the EC of its intention to take a controlling share of Kværner on Oct. 23.

The EC said Aker�s divestments during the first phase of the commissions review�which saw the contractor shed its US-based Deepwater Company, and its Norwegian-headquartered marine seismic unit within days in October�were �unsatisfactory� as it �did not address the competition concerns in the EPCI market on the NCS. Nor was it clear, the EC noted, that this sell-off would �create a viable stand-alone business for a competitor in the MMO market to be able to challenge seriously the position of [Aker]-Kværner.�

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