EU opens antitrust investigation into IBM takeover bid
The European Union’s competition regulator has opened an in-depth antitrust investigation into IBM’s takeover bid for Swedish software company Telelogic.
The European Commission said on Wednesday that a preliminary market investigation found the proposed transaction would raise serious doubts as to its effect on competition. Both IBM and Telelogic are active in the market for software development tools. The commission identified competition concerns with regard to two of these product markets: software modeling and requirements management tools. In these markets IBM and Telelogic are direct competitors and are the leading vendors world-wide.
The combination would strengthen IBM’s market position for certain types of software development tools, in particular so-called “software modeling and requirements management” tools, the commission said. Modeling tools are designed to help software developers model the software before developing it. Requirements management tools are designed to streamline and document a development team’s analysis of the requirements.
According to EU antitrust rules, the commission now has 90 working days until Feb. 20. 2008 to decide whether to approve the takeover. IBM announced in June it would buy Telelogic for about €550 million ($776 million). (people.com)
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