The Commerce Commission has granted clearance for French firm Thales to acquire Gemalto provided it sells its entire general-purpose hardware security module (HSM) business.
Thales applied to the Commission for clearance to acquire Gemalto in August as part of a global transaction requiring approval from a number of international competition authorities.
In making its decision, the Commission primarily focused on the products that both parties supply in New Zealand – the supply of payment HSMs and general purpose HSMs.
The decision also appears to have been made across other jurisdictions.
These are dedicated hardware appliances running on encryption software to generate, protect and manage encryption keys used to protect data in a secure, tamper-resistant module.
“We believe the combination of the two largest suppliers of general purpose HSMs in New Zealand would be likely to result in a substantial lessening of competition, with customers having limited alternatives to the merged entity when selecting a new general purpose HSM," Commission deputy chair Sue Begg said.
“However, we consider the divestment offered by Thales is sufficient to remedy the competitive harm the acquisition would cause in New Zealand and have granted clearance subject to this undertaking."
Any purchaser of the HSM business will need to be approved by the Commission.
The Commission is satisfied there are no competition concerns in the market for the supply of payment HSMs in New Zealand due to the low level of overlap in New Zealand and the presence of other suppliers.