On March 20, 2019, the Commission cleared Spirit’s acquisition of Asco, both being active in the supply of aircraft components.[1] The case raised no vertical or horizontal unilateral concerns. However, the Commission imposed remedies to address coordinated effects in the market for slats and slat systems[2] making this the first such case since Hutchison 3G Italy/WIND/JV in 2016.[3]

Spirit and Asco operated at different levels of the slat systems supply chain.[4] Asco was a member of a joint venture (“JV”) called Belairbus, through which it developed and produced slat systems for Airbus. Spirit was one of the only two suppliers of slats worldwide. Sonaca, Spirit’s competitor, was one of Asco’s partners in the JV. The Commission was therefore concerned that the acquisition— which would have resulted in Spirit and Sonaca becoming partners in a JV—would increase market transparency and facilitate coordination in the slats and slat systems markets.

To address the Commission’s concerns, Spirit offered to amend Belairbus’s organization to ensure that each member of the JV would separately carry out all future negotiations with Airbus. In addition, all commercially sensitive information that Asco held on Sonaca would be destroyed to prevent it from being transferred on to Spirit post-transaction. Spirit also committed not to receive any such information going forward.

[1]      Spirit/Asco (Case COMP. M.8948), decision not yet published. See Commission Press Release IP/19/1775.

[2]      Slats are aerodynamic surfaces that extend from the leading edges of the wing at take-off and landing, which allow the aircraft to function at a higher angle of attack, improve the wing’s lift, and enable the aircraft to fly at lower speeds. Combined with other aircraft components, slats form part of a “slat system.”

[3]      See Hutchison 3G Italy/WIND/JV (Case COMP/M.7758), Commission decision of September 1, 2016. The Commission has considered coordinated effects in more recent cases, but ultimately did not require a remedy. See ArcelorMittal/Ilva (Case COMP/M.8444), Commission decision of May 7, 2018 and Tronox/ Cristal (Case COMP/M.8451), Commission decision of July 4, 2018.

[4]      Respectively, manufacturing of slats (Spirit) and development/production of slat systems (Asco).