EU Clears Rheinmetall Acquisition
The European Commission has issued a news release noting that a proposed transaction, in which German defense firm Rheinmetall will take over EHG Elektroholding’s 50% shareholding in AIM, has been approved under EU Merger Regulations.
AIM is currently a joint venture of EHG Elektroholding and Diehl. Rheinmetall is active in the business areas automotive and defence. Diehl (Germany) is mainly active in the business areas metals, electronic controls, avionics and defence. AIM is a German leading manufacturer of key components in the area of infrared technology mainly used for the production of military goods.
Neither Diehl nor Rheinmetall are currently competing against AIM on the market for infrared components, though these components are used as inputs in the manufacturing of different defense products which are made by Rheinmetall. These include fire guidance systems for armoured vehicles, anti-aircraft systems, and optronic surveillance systems for UAVs like the KZO.
For the curious, “KZO” actually stands for “Kleinfluggerat Zielortung, or “small aircraft for target localisation.” By the end of 2007, the German Army will have six KZO systems in its inventory, comprising 60 drones and 12 ground systems. A variant also is competing for the USA’s Future Combat System Class III UAV.
The European Commission investigation has shown that the concentration will not significantly impede competition. While Rheinmetall will receive direct access to infrared components manufactured by AIM, the commission noted that its competitors have used infrared components from AIM’s potential competitors like the French company Sofradir, and succeeded in the German defense market. See EC English release.