Helicopter operator CHC has been ordered by the competition watchdog to sell off the UK North Sea part of a business it recently acquired from Babcock.
The Competition and Markets Authority (CMA) has completed its long-running investigation into the CHC takeover of the Babcock helicopter unit.
Canada-based CHC acquired Babcock's UK, Denmark and Australia operations last year - this ruling means it will have to divest the UK arm.
Energy Voice reports that, despite protestations from CHC, the authority has stuck to its guns saying that the deal will "significantly reduce rivalry" in the North Sea helicopter market.
CMA has now ordered CHC to dispose of the UK arm of the business bought from Babcock last September.
CHC said: "We are disappointed by the CMA's decision. The CMA has fundamentally failed to understand the vital need for consolidation in what is a highly-challenging market environment. With that said, we are looking forward to integrating the Australia and Denmark business at the appropriate time.
"We will be analysing the CMA's final report in more detail before deciding on next steps. In the meantime, our operation continues as usual with a continued focus on delivery of safe and efficient services to our customers. "
CHC, one of four helicopter operators in the North Sea oil and gas market, has long argued that pressures following two downturns have had a dramatic impact on the aviation sector, with unsustainable pricing for contracts.
Therefore, it has argued repeatedly that the deal would not threaten competition standards.
Babcock employs around 500 people in its helicopter unit, with its primary base in Aberdeen, while CHC's Aberdeen business has around 300 people.