Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC approves satellite, space launcher joint venture between Airbus and Safran, (Dec 1, 2014)

A proposed joint venture between aerospace and defense contractors Airbus Group N.V. of The Netherlands and Safran S.A. of France has been approved by the European Commission, the Commission has announced (European Commission case number M.7353).

On October 8, 2014, Airbus and Safran had proposed the creation of a joint venture for space launchers, satellite subsystems, and missile propulsion. As initially proposed, the Commission had concerns that the merger could have significantly reduced competition in the supply of satellites and space vehicles. The joint venture could have created an incentive to shut out Airbus' competitors or limit their access to a number of important satellite and space vehicle components.

With regard to hall-effect thrusters, the Commission's concerns were that the transaction might have significantly reduced competitors' customer base, since Airbus, the most important satellite manufacturer in Europe, would have the incentive to buy exclusively from the joint venture. Also, the transaction might have led to exchanges of confidential information regarding satellites and satellite components between the joint venture and Airbus to the detriment of competitors.

To address these competition concerns, Airbus and Safran committed to exclude Safran's activities in electric satellite propulsion from the joint venture, and to conclude a framework supply agreement with Safran's current main customer for (i) carbon-carbon cylinders for optical instruments for space applications, (ii) thermal protection systems for civil re-entry bodies, and (iii) SAPT, as well as to guarantee the supply of these components to any third party prime contractor on transparent and non-discriminatory terms.

The Commission concluded that these commitments by Airbus and Safran satisfactorily addressed the competition concerns raised. The Commission therefore concluded that the proposed transaction, as modified by the commitments, would not raise competition concerns. The decision is conditional upon full compliance with these commitments.

Airbus is active in aeronautics, space, and defense. Its activities include the design, manufacture, and worldwide sale of civil space launchers, launcher subsystems and equipment, satellites, and satellite subsystems and equipment. Airbus is also active in the field of strategic and tactical missiles.

Safran is active in aerospace propulsion, aircraft equipment, defense, and security. Its activities include the production of liquid rocket and solid rocket motor propulsion systems for launchers and electric propulsion systems for satellites. Safran is also active in the field of strategic and tactical propulsion for missiles.

Companies: Airbus Group NV; Safran SA

News: Antitrust