The Competition and Markets Authority (CMA) is considering
Safran's offer of undertakings, which includes the sale of
substantially all of Safran's business in the design and
production of Trimmable Horizontal Stabilizer Actuator (THSA)
systems, to remedy the competition concerns it identified during
its Phase 1 investigation.
Having provisionally found that these undertakings could address
the CMA's concerns, the CMA will now proceed to considering them
in more detail, including seeking third party feedback, and if
satisfied, will clear the deal.
THSA is a vital component in commercial aircraft design and
allows for movement of the horizontal tail of an aircraft. The
tail helps to maintain stability, reduce drag, and keep the
aircraft airborne. Whilst aircraft components like THSA are made
around the world, Collins maintains a manufacturing presence in
the north of the UK.
Both businesses conceded at an early stage in the CMA's
investigation that the deal raises competition concerns and
informed the CMA they would submit undertakings to address these
concerns. Since then, the CMA has had constructive, early
engagement with the businesses on possible remedies.
The CMA is concerned the deal – if allowed to proceed without
remedies – could increase the cost of THSA components or lower
innovation and lead to fewer options available for aircraft
manufacturers to choose from. This could, in turn, lead to less
innovative products or increased prices for aircraft customers
such as airlines and logistics companies should these
manufacturers pass the increased costs onto them.
Naomi Burgoyne, Senior Director for Mergers at the CMA, said:
From an early stage in our investigation we have engaged with the
companies on the proposals they have put forward to resolve
competition concerns related to THSA systems used on aircraft.
THSA systems are an important part of an aircraft's design. A
competitive supply chain ensures those looking to purchase
aircraft – be they airlines or logistics firms – have the best
options available at the best prices. We'll need to consider
feedback on these undertakings, but our preliminary view is these
may resolve our concerns.
More information can be found here Safran / Collins merger
inquiry - GOV.UK
Notes to editors:
- Safran is a company headquartered in Paris, France, and
active in the design, manufacture and sale of aerospace
equipment. Collins is a US manufacturer of actuation systems in
the aerospace industry and maintains a presence in the north of
the UK.
- The CMA considers that there are reasonable grounds for
believing that the undertakings offered by the companies, or a
modified version of them, might be accepted by the CMA and is
considering the offer. Formal acceptance of the undertakings
would result in the CMA clearing the deal under the Enterprise
Act 2002.
- Safran will retain a small THSA business that is commercially
and operationally separate from the primary THSA business to be
divested.
