EU Suspends Review into IBM-Telelogic Deal

Tuesday, 27 Nov 2007 | 6:49 AM ET

European Union antitrust regulators suspended their in-depth investigation into IBM's bid to buy Swedish software provider Telelogic, the European Commission said Tuesday.


It said that the suspension was due to a lack of information needed from the companies to decide on whether the 557.5 million euros ($828 million) deal did not violate EU competition rules.

Resumption of the review will start once the requested information is given over to EU officials, the commission said.

An initial EU investigation into the deal found that IBM and Telelogic were direct competitors and leading vendors worldwide in software modeling and in development tools, adding that a linkup between the two "could have adverse effects on competition" and slowdown innovation and interoperability with tools from other vendors.

The EU had set a Feb. 20 deadline by which to reject or approve the deal. A new deadline has not yet been given.

When International Business Machines announced the deal in June, the Armonk, New York-based company said its acquisition of Telelogic -- which has customers mainly in the aerospace and defense, telecommunications and automotive industries -- would give clients a wider range of software and system development capabilities.

Telelogic, based in Malmo, Sweden, has U.S. headquarters in Irvine, California, and has more than 900 staff in 20 countries, it said on its Web site. If the deal is approved, Telelogic will be part of IBM's Rational Software unit.

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