CMA launches further probe into Babcock aviation sale

Babcock oil and gas aviation services

Aviation services were sold in September

Competition watchdogs have launched a further investigation into the £10m sale of Babcock’s Aberdeen-based oil and gas aviation business to CHC Group.

The acquisition of the business, which operates in the UK, Australia and Denmark, prompted an initial inquiry by the Competition and Markets Authority.

It set a 25 November deadline for undertakings that might be accepted by the CMA, but CHC informed the CMA that it would not be offering any such undertakings.

The CMA has therefore decided to refer the merger for a phase 2 investigation.

Proceeds from the sale, announced in March, are scheduled to reduce net debt.

The business employs more than 500 and operates about 30 aircraft across its three locations.

For the year ending 31 March 2021, it had revenue of £154m, a loss before tax of £2m and underlying operating profit of £2m.

After completing the deal in September Babcock CEO David Lockwood said: “This disposal is part of our plan to streamline and focus the group on our key markets.

“Divesting at least £400 million of businesses will enable us to reduce complexity and increase our focus as we return Babcock to strength.

“The oil and gas aviation business has found a new home and we wish them all the best for the future.”

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