Grundman Cited In Defense News, “Are More Mergers Ahead? BAE-EADS Talks Could Spark More Tie-Ups”

17 September 2012 • 0 Comments

“Then there are the regulatory approvals that could prove challenging for the companies. The British, French, German, Spanish and U.S. governments would have to approve the deals, as well as EU regulators. Steven Grundman, the defense industrial analyst at the Atlantic Council in Washington who oversaw defense mergers and acquisitions at the Pentagon during the Clinton administration, added that while governments should rightly view the new company as a trans-Atlantic industrial bridge, the combination still will face scrutiny on both sides of the Atlantic, including from competition authorities. ‘Recall that the European Commission rejected the proposed merger of General Electric and Honeywell on a theory of ‘portfolio effects’ that took issue not with horizontal overlaps or vertical integration, but the supposed unfair challenge to competitors of the resulting conglomerate’s scale and scope,’ Grundman said. Antitrust regulators will solicit the views expressed by customer governments — the two companies do compete against one another for business worldwide — as well as take account of competitors who may attempt to argue the combination could materially disadvantage them. Still, Grundman said he anticipates relatively few traditional antitrust problems on either side of the Atlantic, adding that security issues loom larger for the Pentagon. On the one hand, he said, DoD already supervises industrial security programs at both companies’ U.S. businesses. At the same time, the Pentagon is sure to scrutinze closely the changing ownership of BAE’s U.S. assets.”


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