Competition Bureau challenges proposed merger of rival Calgary oil service firms by Steve Jenkinson, June 30, 2021, Calgary Herald
The federal Competition Bureau is seeking to block the sale of Tervita Corporation to Secure Energy Services, asserting the proposed merger of the two Calgary companies would be bad for their customers.
“Secure and Tervita are the two largest suppliers, and in many areas, the only suppliers of oil and gas waste services in the Western Canadian Sedimentary Basin and vigorously compete with one another to win customers,” the bureau said in a release Wednesday.
“The elimination of this rivalry through this proposed merger is likely to result in higher prices and a loss in the quality of service for customers.”
The two companies said they’ll work with the competition bureau to address its concerns.
“Secure and Tervita will comply with all necessary requirements under the Competition Act prior to closing the transaction,” the companies said in a joint statement.
Both firms operate environmental services and dispose of waste produced by oil and gas operations in Western Canada. These include industrial landfills, treatment recovery and disposal facilities and standalone water disposal wells, among other businesses.
The bureau said its own review determined the planned sale would likely result in a substantial reduction of competition for those services, leaving only small regional or local competitors.
“The higher costs likely to be imposed as a result of the proposed merger will harm oil and gas producers at a time when this important industry is struggling,” it said.
In an analyst’s note, iA Capital Markets said the competition bureau’s challenge was not unexpected and that the companies would likely need to sell some assets for the sale to proceed.
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