One of the biggest takeovers in the European space industry has just got approved. On July 20, the European Commission (EC) informed that it has cleared the way for the acquisition of Arianespace by Airbus Safran Launchers (ASL), after both companies agreed to conditions imposed by the European Union’s executive body.
In February 2016, the Commission opened an investigation to review the merger process, after it received information about the upcoming transaction. EC halted the acquisition due to the concerns that a possible flow of sensitive data could take place that would harm rival companies. The Commission is worried that this flow could result in less competitive tenders and less innovation in the space industry market.
"A well-functioning satellite and launcher industry is important to guarantee that European companies and institutions can gain access to space at competitive terms. The commitments offered by ASL ensure that after its takeover of Arianespace, all players in the industry will continue to have incentives to innovate,” said Margrethe Vestager, European Commissioner for Competition.
In order to proceed further with the takeover, ASL and Arianespace agreed to EC’s insistence by offering to implement firewalls between both companies to prevent information flows that could harm competitors.
“In particular, the companies committed not to share information about third parties with each other save for what is normally required for the everyday operation of the business,” EC said in a press release.
The Commission also ordered both sides to create an arbitration mechanism in future deals with third parties that will ensure the effective implementation of the firewalls.
ASL currently has 27.4 percent of Arianespace’s shares. In a deal expected to take place within weeks, ASL plans to buy a nearly 35 percent stake from the French Space Agency (CNES). ASL is currently controlled jointly by Airbus Group, a Dutch-based aerospace company and Safran, a French venture, supplier of systems and equipment for aerospace, defense and security.
Based in France, Arianespace offers launch services to the European Space Agency (ESA) and private as well as institutional satellite operators. The company currently uses three different rockets to provide its services: Ariane, developed by ASL, Vega, built by ELV of Italy and Soyuz, manufactured by the Progress State Research and Production Space Center (TsSKB) of Russia.
Arianespace in the future will mostly rely on the Ariane 6 launcher, currently being manufactured by ASL. It will be 207 feet (63 meters) tall and 18 feet (5.4 meters) in diameter. The booster will operate in two configurations: Ariane 62 and 64. The “62” variant will weigh around 500 metric tons at liftoff and is intended mainly for government and scientific missions. It will be capable of launching up to five metric tons into geostationary transfer orbit (GTO). Ariane 64 will have a liftoff weight of around 800 metric tons and is intended for commercial dual-satellite launches of up to 10.5 metric tons into GTO.
The upcoming takeover of Arianespace by ASL, is seen as inevitable privatization of ESA’s launch providing services. As the French government sells its shares in Arianespace, the influence of the country that contributes the most to ESA, could be shrinking in the future. However, the consolidation of satellite manufacturing and launch providing services in ASL’s hands could help Arianespace become more competitive in the space industry market.