Thales and Gemalto improve EU remedies in bid to secure approval
8 November 2018. By Nicolas Hirst.
Thales and Gemalto have improved an offer to allay competition concerns and secure EU approval for their merger, MLex has learned.
The parties are understood to be confident that the revised remedy package would resolve outstanding concerns about the 4.8 billion-euro ($5.5 billion) deal after investigators canvassed the market for views on an earlier offer.
The commission hasn’t issued formal objections to the deal, something it would normally have done in October to keep open the possibility of blocking the acquisition.
It has also tentatively scheduled a meeting with national competition authorities for the end of November, suggesting it could announce a final decision before the end of the year.
In early October, Thales offered to divest its nShield line of general-purpose hardware security modules to resolve concerns that the deal would merge two leading producers of such devices. MLex understands the company has mandated an investment bank to arrange the divestment and has detected market interest in acquiring it.
The new offer improves on the earlier one but doesn’t involve the sale of either company’s payment HSM businesses, which are used to secure financial transactions, MLex has learned. This move comes despite some industry players telling the commission that the parties ought to divest some of these assets.
HSMs are highly secure devices, connected to or inserted into computers, that manage the random keys or codes needed to unlock encrypted data. Payment HSMs are used in the financial sector to validate payments.
Thales agreed to buy Netherlands-based Gemalto last December, and the commission opened an in-depth investigation into the deal in July.
The EU watchdog’s deadline to either approve or veto the deal is Jan. 8.