Brussels, 27/09/2000 (Agence Europe) - After an in-depth investigation (four months) the Commission finally gave its assent to the acquisition, by the company Boeing, of the activities belonging to Hughes Electronics Corporation in the satellite sector. The operation will gather together that activities of the two parties in the satellite construction sector, thus leading to a vertical integration between the activities of Hughes in terms of satellites and those of Boeing in the launching sector. Already a holder in market share of 35 to 40% in the GEO satellite sector, Hughes will have an additional market share susceptible of further increasing the gap with its competitors. However, the in-depth investigation enabled to establish that Hughes Space Communication (HSC), specialised division of Hughes, will remain confronted to the major players in satellites such as Lockheed martin, S/S Loral, Alcatel Space Industries and Astrium.
Another obstacle lies in the fact that the parties could push Hughes clients to choose Boeing as an operator in the launch services. However, the investigation carried out with clients showed that, if they decided to increase the costs of integration of its satellites into launchers other than those of Boeing, HSC would rather risk loosing markets.
In view of these results, the Commission felt that the operation would not lead to nor reinforce any dominant position in the market for launching services and thus declared it compatible with the common market. The parties have, moreover, presented a series of undertaking aimed at comforting the Commission in its decision, undertakings that guarantee that: I) all non public information relating to launcher (or to satellites) that the providers pf launching service of HSC (respectively Boeing or Sea Launch) could gain would not be provided nor divulged to Boeing or to Sea Launch or, according to the case, to HSC; ii) HSC would put the information relating to its satellites at the disposal of both other launch service providers as to Boeing or Sea Launch; iii) HSC would co-operate without discrimination with the providers of launch services other than Boeing or sea launch for the integration of its satellites into launchers; iv) the entity created by the operation and Hughes will not enter into a relationship of "privileged supplier".