(Alliance News) - The UK Competition & Markets Authority on Friday said it has halted progress on CHC Group LLC's planned acquisition of Babcock International Group PLC's oil & gas aviation business as it mulls whether to launch an investigation.
The London-based aerospace, defence and nuclear engineering company announced the sale of its oil & gas aviation business in March. The business, part of Babcock's aviation segment, is headquartered in Aberdeen and provides offshore oil and gas crew transportation services in the UK, Denmark and Australia.
Texas-based helicopter services company CHC planned to purchase the businesses for an undisclosed sum, and the deal was expected to close in the second quarter of 2021.
"CHC will seek clearance for the transaction from antitrust authorities in the UK and Australia, but completion is not conditional upon such clearances being received," the two said at the time of announcing the deal in March.
The UK CMA's initial enforcement order was issued on May 26. The CMA said the order prevents both parties from integrating the businesses whilst the regulator decides whether it has grounds to open an investigation.
The regulator said it has "reasonable grounds for suspecting" that the acquisition would result in CHC's UK, Australia and Denmark helicopter businesses ceasing to be distinct from the three Babcock businesses included in the proposed deal.
Babcock in April said it planned to raise GBP400 million from disposals over the next 12 months as it decided to skip dividends for the 2021 and 2022 financial years to focus on building a strong balance sheet.
Babcock shares were trading 1.6% higher at 303.70 pence in London on Friday.
By Scarlett Butler; scarlettbutler@alliancenews.com
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