The European Commission has cleared under the EU Merger Regulation SAFRAN's proposed acquisition of the solid rocket propulsion business of French state-owned SNPE, composed of SNPE's subsidiary SNPE Matériaux Energétiques, SME and SNPE's participation in REGULUS, a joint venture between SNPE and the Italian company Avio. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

On 23 February 2011 the European Commission received a notification of a proposed concentration by which the undertaking SAFRAN France, belonging to the group Safran Société Anonyme, would acquire control of the whole of SNPE Matériaux Energétiques, a French state-owned company, and joint control of Regulus by way of purchase of shares, and according the meaning of the Merger Regulation. Under this proposed transaction, SAFRAN would acquire the solid rocket propulsion business of SNPE. Therefore this business consists of SNPE's subsidiary SME and SNPE's participation in the joint venture REGULUS over which SNPE exercises joint control together with the Italian firm Avio.

As the two transactions are interdependent and relate to a single business, SNPE's solid propulsion activities, the Commission found that they constitute a single concentration for EU merger control purposes. Commission's examination showed that the activities of the parties are largely complementary since they focus mostly on different types of products.

The investigation also showed that the combination of SAFRAN's and SME's activities would not lead to foreclose input or customers given the presence of alternative suppliers, the already existing relations between the parties and the rather limited presence of SAFRAN on the markets concerned. The Commission therefore concluded that the transaction would not raise competition concerns.

Main activities of the involved undertakings:

• SAFRAN (Public, EPA:SAF) is a French company active mainly in aerospace propulsion, aircraft equipment, defence and security.
• SNPE Group, involving SNPE Matériaux Energétiques and Regulus, is active in tactical, strategic and space propulsion, pyrotechnic equipment, composite materials. SME designs, develops and produces propellant charges and energetic equipment for the defence, aeronautical, space and automotive industries, propellants for military use and raw materials related to these applications. SME also manufactures composite materials which are used in the aerospace, defence and other industries. Through Roxel, a joint venture with MBDA, a European missile manufacturer, SME is also active in the supply of solid rocket motors. On its side, Regulus is a French company that operates a solid propellant plant in French Guiana where the main segments of the Ariane 5 Solid Rocket Motors receive their propellant.