The European Commission has cleared under the EU Merger Regulation the proposed acquisition by Thales of France of Alcatel's shareholdings in the space joint ventures Alcatel Alenia Space (AAS) of France and Telespazio of Italy, currently jointly controlled by Alcatel and Finmeccanica.

Thales holds a leading position for Traveling Wave Tubes (TWTs), a critical component for telecommunications satellites. AAS is a leading satellite manufacturer.

In November 2006, the Commission opened an in-depth investigation to determine whether the new entity would be likely to restrict access to TWTs for its downstream satellite and satellite subsystem rivals. The Commission's investigation found that the new entity's ability and incentive to do so would be very limited and significantly constrained by both competitors and customers.

As a result, the Commission concluded that the concentration would not significantly impede effective competition within the European Economic Area or a significant part of it.

Competition Commissioner Neelie Kroes commented, “This merger creates a complex vertical structure in an industry involving highly technical products, but the Commission has investigated it thoroughly and is satisfied that the existing strong competition on the markets for telecommunications satellites and subsystems will not be adversely affected.”