Brussels – The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Morpho Detection, the threat detection equipment business of Safran of France, by Smiths of the UK. The clearance is conditional on the divestiture of Morpho Detection’s explosive trace detection business. Both Smiths and Morpho Detection develop and manufacture threat detection equipment, in particular explosive trace detectors used in airports or other facilities, such as at ports and borders, critical infrastructure, and by the military and emergency response services.
The Commission had concerns that the merged entity would have faced insufficient competitive pressure from the remaining players in the European market for the supply of explosive trace detectors to airports and in the worldwide market for the supply of explosive trace detectors to other end-users. Following the takeover there was a risk of price rises and less innovation for explosive trace detectors.
To address the Commission’s competition concerns, Smiths offered to divest Morpho Detection’s global explosive trace detectors business. The divestment will fully remove the overlap for explosive trace detectors resulting from the merger as initially notified. The purchaser of the divested explosive trace detector business will be able to replace Morpho Detection on the market. It will exert the same level of competitive constraint on Smiths with regard to both the supply of explosive trace detectors to airports in Europe and to the supply of non-aviation customers worldwide.
These commitments address all competition concerns identified by the Commission. The Commission’s decision to approve the transaction is conditional upon full implementation of the commitments.
