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Brussels, 15 April 2004

Commission clears the acquisition of FLS Aerospace by SR Technics

The European Commission has approved the acquisition of the Danish company FLS Aerospace by SR Technics (SRT). Both companies are active in the aircraft maintenance, repair and overhaul (MRO) business. The analysis of the transaction has confirmed the highly competitive nature of the market and has shown that consumers will continue to benefit from sufficient choice in the sector.

On 27 February 2004, SRT notified its purchase of FLS Aerospace UK, FLS Aerospace IRL, FLS Aerospace DK and Sheerwalk services Limited.

The analysis carried out by the Commission indicated the existence of distinct aircraft MRO markets based on the level of service required and the aircraft type concerned, and that these markets are generally European-wide. For those markets where the parties have overlapping activities, SRT's post-merger share of the market for MRO services will not raise any competitive concern given the moderate nature of the market share additions from FLSA.

The market investigation also confirmed the highly competitive nature of the MRO markets with multiple larger and capable players, such as, inter alia, Air France Industries, Lufthansa Technik, Sabena Technics, EADS Sogerma and Iberia, having significant spare capacity to increase their presence on the market.

In view of these elements, the Commission concluded that the operation will not result in the creation or strengthening of any dominant position, and has decided to clear the transaction.

SRT is the spun-off MRO business of the former Swissair airline, and is currently controlled by UK venture capital Company 3i. FLSA is part of the Danish conglomerate FLS Industries A/S. Both companies provide MRO services for commercial aircraft and aircraft parts such as landing gear, wheels and brakes. SRT also provides MRO services for engines, whilst FLSA does so for auxiliary power systems.

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