Advised Thales on its Approved Transaction of Gemalto

After an in-depth Phase II investigation, the European Commission approved Thales' €4.8 billion acquisition of Netherlands-based digital security firm Gemalto subject to conditions, in December 2018. The companies overlapped in the production of encryption software and hardware security modules (HSMs). The European Commission clearance was conditional upon the divestment of Thales' general purpose HSM business. The transaction was also approved in other jurisdictions, including South Africa, New Zealand, Canada, Turkey, and Australia.

Compass Lexecon provided Thales with an economic assessment of the competitive impact of the acquisition. Our analyses mainly consisted of assessing the unilateral effects in respect of general purpose and payment HSMs. We estimated market shares, analyzed the closeness of competition between the parties, and assessed the extent of the overlap between the Parties’ customers, the customers’ switching patterns and the extent of the contestable fraction of sales.

Compass Lexecon experts David Sevy, Jorge Padilla and Valérie Meunier and a team including Guillaume Duquesne, Aleksandra Khimich, Alexandre Nouvel and Marion Chabrost, worked together with lawyers at Cleary Gottlieb Steen & Hamilton.