EU Regulators Probe Safran’s $1.8 Billion Collins Aerospace Deal

European Union antitrust regulators are examining whether Safran’s proposed acquisition of Collins Aerospace’s flight controls business could enhance the French aerospace giant’s market dominance, according to Reuters. A source familiar with the matter stated that the European Commission has initiated inquiries into the potential impact of the deal and is currently seeking feedback from industry competitors and customers.

Per Reuters, the Commission has distributed questionnaires to relevant parties, setting a deadline of February 24 for responses. The regulatory body is evaluating the competitive implications of the $1.8 billion deal, which Safran announced in July last year as part of its strategy to prepare for the next generation of aircraft. If completed, the transaction would mark Safran’s most significant acquisition since its purchase of seat manufacturer Zodiac in 2018.

Related: Australian Regulator Backs Virgin Australia-Qatar Airways Alliance

Actuation systems, which translate electronic commands from the cockpit into mechanical movements that control aircraft functions, play a crucial role in aviation operations. These systems are essential for tasks such as adjusting lift during landing. The Commission’s inquiry focuses on the potential conglomerate effects of the deal—analyzing the impact of mergers between companies operating in different but interconnected sectors, according to Reuters.

Regulators have also raised questions regarding specific Safran and Collins Aerospace products, including Safran’s Horizontal Stabilizer Trim Actuation (HSTA) systems used for aircraft stabilization and Collins’ thrust reverser actuation systems (TRAS).

As part of efforts to ease regulatory concerns, Safran agreed in December to divest its North American electromechanical actuation business, which encompasses intellectual property, operational assets, workforce, and long-term contracts related to HSTA systems. The business is set to be sold to U.S. aircraft components manufacturer Woodward. Safran has positioned this divestment as a crucial step toward securing approval for the Collins acquisition.

The European Commission is expected to complete its preliminary review by March 21.

Source: Reuters