The European Commission has launched an in-depth antitrust investigation into rocket maker Airbus Safran Launchers’ attempt to take a controlling stake in its launch provider Arianespace. The 90-day review will assess the EU competition implications of the transaction, which is designed to strengthen Europe’s position in the global launch market.
The European Commission has launched an in-depth antitrust investigation into rocket maker Airbus Safran Launchers’ attempt to take a controlling stake in its launch provider Arianespace.
The 90-day review will assess the EU competition implications of the transaction, which is designed to strengthen Europe’s position in the global launch market.
Last June ASL reached an agreement with French space agency CNES to buy its 34.68% stake in Arianespace for a reported €130m (US$146m). This would increase ASL’s shareholding in Arianespace from 39% to about 74% – something always envisaged when Airbus (EPA:AIR) and Safr
Closing of the Arianespace takeover is now not expected until the second half of the year as the Commission’s investigation is set to run until 12 July, and could be extended.
Commenting on the Commission’s decision, Airbus said: “We take note of the decision. However, the competition is not within the EU; the competition is a global one.”
ASL and Safran declined to comment.
In a statement Commissioner Margrethe Vestager (pictured), in charge of competition, took a different worldview: “A competitive space industry has a crucial role in strengthening the EU’s industrial base and boosting our global competitiveness.
“The Commission therefore needs to make sure that all players in the space industry continue to have strong incentives to innovate.”
Laying out its concerns, the Commission pinpointed three areas where it believed the acquisition could lead to anti-competitive behaviour.
The deal could harm other satellite manufacturers competing against ASL co-owner Airbus on price or access to Arianespace, the Commission said. It added that critical information about Airbus and Arianespace’s rivals could also be shared between the two.
Secondly, the Commission suggested that the tie-up could lead to Arianespace giving priority access to ASL’s Ariane rocket ahead of the Vega launch vehicle, built by Italian joint venture ELV. The Italian space agency ASI owns 30% of ELV and the remaining 70% is held by rocket maker Avio, which itself owns 3.4% of Arianespace.
The Commission also warned that Airbus and ASL may also begin exclusively procuring payload adapters and dispensers from each other, regardless of the price and quality offered by competitors.
In a statement the antitrust authority said: “Overall, the Commission is at this stage concerned that the transaction might lead to higher prices, less customer choice and a reduction in research and development efforts in the satellite, launcher and launcher equipment and launch services markets.”
The combination of Arianespace and ASL would create a one-stop-shop for customers and cut costs through synergies as Europe looks to fight off competition from vertically integrated US disruptor SpaceX.
ASL was created in late 2014 after the European Space Agency’s member states approved funding to build the Ariane 6 rocket. Last summer ESA awarded ASL a €2.4bn (US$2.7bn) contract to develop its next-generation launch vehicle.
Airbus and Safran won regulatory approval from the Commission to form ASL on the condition that Safran left out its electric satellite thrusters from the JV. The regulator also required the two partners to guarantee the supply of certain components to third parties on transparent terms.
