EU Opens In-Depth Investigation into Airbus Safran Acquisition of Arianespace

BRUSSELS—The European Union on Friday said it opened an in-depth probe into Airbus Group SE and Safran SA's joint acquisition of 74% of Europe's premier rocket company on concerns the deal could lead to less innovation and higher prices in the satellite and launch service markets.

The European Commission, the bloc's antitrust authority, said it was concerned the deal to take over Arianespace could lead to the merged entity discriminating against rival satellite manufacturers, to give priority to launch services connected to Ariane launches.

The deal could also lead the merged company to exclusively use Airbus or Safran's payload adapters and dispensers regardless of price and quality offered by competitors, the EU added.

"A competitive space industry has a crucial role in strengthening the EU's industrial base and boosting our global competitiveness," said Margrethe Vestager, the EU's antitrust chief.

"The commission therefore needs to make sure that all players in the space industry continue to have strong incentives to innovate," she added.

Such in-depth inquiries are common for large merger reviews in Brussels and don't necessarily mean a deal will be blocked. If the EU confirms its concerns, the companies also can decide to offer concessions, such as selling assets, to assuage the regulator. If those aren't deemed sufficient, Brussels can also block the deal.

The European Union has until July 12 to make a final decision.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

(END) Dow Jones Newswires

February 26, 2016 11:25 ET (16:25 GMT)

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