Alan George/BRUSSELS
New aerospace giant EADS (European Aeronautic Defense and Space) is set to float on 11 July after approval of the merger of its component companies by the European Commission's (EC) competition directorate-general. The company will be created simultaneously with flotation on the stock market.
As predicted, the deal was approved subject to conditions concerning the manufacture of satellite antenna reflectors and central tubes, with the EC taking steps to guarantee continued competition in the sector (Flight International, 9-16 May).
Confusingly, the EC ruled that the merger of DaimlerChrysler Aerospace, Aerospatiale Matra and CASA - all Airbus partners - raised no airframing concerns because of BAE's veto in the consortium, although this veto may soon be bargained away when Airbus is restructured.
The EC's major worry was that with Aerospatiale Matra Lanceurs (AML), the biggest European producer of antenna reflectors and satellite tubes, and CASA offering the main alternative, "there was a risk that the operation would create a dominant position in these two markets".
A specific problem with the supply of military communications satellites in France was identified by the EC. There, one manufacturer, Matra Marconi Systems, is linked to EADS, and the other, Alcatel Space, would be no longer able to source reflectors and tubes competitively.
The EC "feared that the merged entity would be in a position to foreclose the market to Alcatel Space and therefore become the only supplier to the French Ministry of Defence".
The remedy will see EADS divest certain competencies to enable customers to design, manufacture and sell antenna reflectors and central tubes independently, although it is not clear whether this means Alcatel will take the business in-house.
The divestments will see AML transfer intellectual property rights, employees, technical assistance and specialist equipment, while in the case of central tubes, EADS will also transfer its supply contract with Alcatel and, in the case of antenna reflectors, waive its rights under a long-term supply agreement between AML and Alcatel.
Source: Flight International
