European Commission probes Thales, Gemalto deal - Mobile World Live

European Commission probes Thales, Gemalto deal

24 JUL 2018

The European Commission (EC) opened an investigation into the $4.8 billion acquisition of authentication company Gemalto by Thales, amid concerns of its impact on competition in the hardware security sector.

In a statement, the EC said the proposed transaction would combine the two largest suppliers of hardware security modules for enterprise management, raising concerns a tie-up could raise prices and reduce choice.

The investigation will assess: the extent the two companies compete; the response of other businesses in their relevant sectors; and the ability of software solutions to reach the same level of security as hardware-based security products.

EC commissioner for competition policy Margrethe Vestager (pictured) said: “Our society is increasingly dependent on data security solutions to secure all sorts of social, commercial or personal information.”

She added the EC wanted to ensure the transaction would not lead to: “higher prices or less choice in hardware security modules for customers looking to safely encrypt their data”.

The EC has 90 working days to make a decision on whether to approve the transaction, expiring 29 November.

A spokesperson for Thales told Mobile World Live the company expected the deal to be completed by the end of the year, in line with the timeline laid out at the start of proceedings.

The company added: “We continue very constructive discussions with the EC and we remain at its disposal to provide all the necessary information to help them assess this transaction.”

Global decisions
Thales sealed the deal to acquire Gemalto in December 2017, having seen off a rival bid from Atos.

In addition to the EU, the deal will need to go through antitrust authorities in  Australia, China, Israel, Mexico, New Zealand, Russia, South Africa, Turkey and the United States. Foreign investment authorities in Australia, Canada and Russia must also give the nod.

France-based Thales specialises in space, aeronautics and defence, while Dutch company Gemalto operates across a number of sectors including providing secure elements for IoT devices and mobile handsets.

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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