Norsk Hydro has acquired sole control of Saga by way of a public bid. Norsk Hydro is a Norwegian Group with core activities in petroleum and energy, light metals, agriculture and petro-chemicals. It is 51% owned by the Norwegian State. Following the merger, the State’s ownership will be reduced, at least in an initial phase, to 43.4%. Saga is a privately owned Norwegian upstream oil and gas company with the main centre of activity in the UK and the region continental shelf. The largest shareholder in Saga is Statoil with 20%, Statoil being 100% owned by the Norwegian State.
The European Commission considered that exploration, production and marketing of the crude oil, natural gas and natural liquefied gas (NLG) constitutes a distinct product market, given the considerable supply-side substitutability. The parties consider that the market contains at least the EEA in view of the limited transport costs and the high correlation in prices throughout Western Europe. The investigation confirmed that contention. However, the Commission noticed that the Norwegian gas pipe lines could be distinguished in a Northern North Sea and a Southern North Sea sector and that another distinction relates to the pipelines going to a particular landing point (in the UK, Germany, Belgium or France). The Commission left open the precise definition of the geographical scope.
According to the Commission, on none of the markets where the two companies are active does the concentration lead to the creation or strengthening of a dominant position. Taking into account the total oil production of Saga, the combined entity would account for less than 10% of OECD crude oil production and less than 5% of world-wide production. With regard to gas, the combined entity would account for less than 5% of gas consumed in the EEA. On the NLG market in the EEA, the combined entity has a market share of less than 5%. The Commission has therefore decided not to oppose the notified operation. (Case No. IV/M.1573, decision of 5.07.99)
