IBM takeover of Telelogic is cleared

Doesn't stifle competition

EU competition regulators have approved IBM’s takeover of Swedish software company Telelogic.

The European Commission said in a statement that, following an anti-trust investigation that kicked off last October, “the transaction would not significantly impede effective competition.”

Big Blue had, through its wholly-owned Sweden-based subsidiary Watchtower AB, put forward a cash offer to Telelogic shareholders in June 2007, which was unanimously recommended by the firm’s board of directors.

EU regulators decided to investigate the €491m offer following concerns that IBM’s merger with Telelogic, which provides business process management software primarily to the aerospace and defence, telecommunications, and automotive industries, could stifle competition in that market.

EU competition commissioner 'Steelie' Neelie Kroes said in October: “After this transaction IBM would become by far the largest vendor of software development tools for software modelling and for requirements management.

“It is the commission’s duty to thoroughly analyse the effects of such a transaction and to ensure that it would not harm competition in the software development tools sector".

However, the EC today cleared the acquisition because the two firms’ products do not overlap as much as had been originally feared.

IBM said in a statement that Watchtower expects to complete the takeover early next month. ®