EU Opens In-Depth Probe of IBM's Telelogic Buy

The European Commission announced today that it had opened an in-depth investigation of plans by IBM to buy Swedish business software company Telelogic AB for about 5.2 billion crowns ($798.6 million). The proposed transaction raises competition concerns "given the strong market position that IBM would achieve for certain types of software development tools, in particular so-called 'software modelling and requirements management' tools", the EU executive said in a statement.

The Commission now has 90 working days, until Feb. 20, to decide whether the takeover would significantly impede effective competition. The decision to open an in­depth inquiry does not prejudge the final result of the investigation, it said. "After this transaction IBM would become by far the largest vendor of software development tools for software modelling and for requirements management," said Competition Commissioner Neelie Kroes in the statement. "It is the Commission's duty to thoroughly analyse the effects of such a transaction and to ensure that it would not harm competition in the software development tools sector."

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