U.S. approves Thales takeover of Gemalto with condition
Staff Writer |
The Department of Justice announced that it is requiring Thales S.A. to divest its General Purpose Hardware Security Module (GP HSM) business in order for Thales to proceed with its proposed $5.64 billion acquisition of Gemalto N.V.
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HSMs are secure encryption processing and key management devices that are most frequently included as components of complex encryption solutions used by government and private organizations to safeguard their most sensitive data.
The proposed divestiture will fully resolve all competition concerns.
The Department’s Antitrust Division today filed a civil antitrust lawsuit in the U.S.
District Court for the District of Columbia to block the proposed transaction while simultaneously filing a proposed settlement that, if approved by the court, would resolve the Department’s competitive concerns.
According to the complaint, Thales and Gemalto are the world’s leading providers of GP HSMs and are significant direct competitors in the United States.
Together they account for 66 percent of the U.S. market for the sale of GP HSMs.
Thales and Gemalto are each other’s closest competitors and compete head to head in the development, marketing, service and sale of GP HSMs.
Without the divestiture, the proposed acquisition would likely result in higher prices, lower quality, reduced innovation, and fewer choices for GP HSMs.
The proposed settlement requires Thales to divest, as a viable ongoing business, Thales GP HSM Products business.
This includes all tangible and intangible assets primarily related to the production, operation, research, development, sale, or support of any GP HSM Product.
Additionally, because Thales and Gemalto currently compete to develop new products and services, the settlement requires the divestiture of certain intellectual property and research capabilities for products under development.
The settlement also includes several provisions designed to improve the effectiveness of the decree and the Division’s future ability to enforce it. ■
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