The Commission has opened a detailed investigation under the EU Merger Regulation into the planned acquisition of sole control of Denton of the US by the UK-based financial investment group HgCapital, owner of FTSS. The proposed concentration was originally notifiable to several Member States. However, Hg Capital asked for the case to be referred to the Commission and the Member States agreed to let the case be reviewed under the EU Merger Regulation. Denton and FTSS are the world's two largest suppliers of anthropomorphic testing devices, better known as 'crash test dummies', and also produce other devices used for safety tests in the car industry. An in-depth investigation will enable the Commission to assess the effects of this transaction on competition and customers, as early indications show it could lead to the creation of a quasi monopoly on a worldwide level. The Commission has now 90 working days, until 4 October 2007 to take a final decision on whether the concentration would significantly impede effective competition within the European Economic Area (EEA) or a substantial part of it. The decision to open an in-depth inquiry does not prejudge the final result of the investigation.

Competition Commissioner Neelie Kroes said: “The Commission must make sure that the creation of a quasi monopoly for car-safety testing devices would not adversely affect the quality, innovation or price of these products, which are essential for ensuring the safety of European passengers.” Crash test dummies are used principally by car manufacturers, regulators or independent testing centres to ensure the compliance of new car models with strict safety regulations. The market is characterised by an exceptionally concentrated structure where the two merging companies, FTSS and Denton, control practically all worldwide sales.

The proposed transaction would essentially result in a quasi-monopoly for the supply of the crash test dummies and the parties would also have a very strong position on related markets, in particular for load cells used for measuring the amount of force on different body parts during a crash test. Following strong concerns raised by market participants during the first phase of its investigation, the Commission will in its in-depth investigation scrutinise how the proposed concentration would affect the competitive dynamics of this market and assess the possible detrimental effects it might have on innovation, quality, prices and service levels. [30 May 2007]