Gemalto Merger Gets OK from EU After Thales Agrees to Divest HSM Business

Gemalto and Thales have cleared what was perhaps the highest hurdle in their pursuit of a merger, announcing in a new statement that the European Commission has granted them “merger control Regulatory Clearance”.

Thales had first made its all-cash offer to acquire Gemalto in the spring of this year, but was compelled to push back its deadline for the acceptance period after the European Commission announced in July that it was launching an in-depth antitrust investigation into the proposed deal, on the grounds that Gemalto and Thales are both major providers of Hardware Security Modules to the European Union market. In announcing that the deal has now attained clearance from the European Commission, the companies noted that it was approved “following Thales’s commitment to divest its general purpose hardware security modules (GP HSM) business globally… to a suitable purchaser,” noting that the business line generated 90 million euros in revenues last year.

The development comes after Gemalto and Thales obtained antitrust clearances from authorities in China, Israel, South Africa, and Turkey, as well as foreign investment clearances from authorities in Australia, Canada, and the US.

The companies say they now have eight of the 14 clearances needed to proceed with their merger, and that they expect to attain the reminder and close the deal before the end of the first quarter of 2019. Clearances are still needed from antitrust authorities in Australia, Mexico, New Zealand, Russia, and the US, and from a foreign investment authority in Russia.