CMA considers that undertakings offered by aerospace equipment manufacturer Safran could resolve competition concerns relating to its acquisition of part of aerospace business Collins.
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.
