Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu . 
 EUROPEAN COMMISSION  
 
 
 
 
 
Brussels, 11.03.2019  
C(2019 ) 2041 final  
 
 
 
 
 
To the notifying parties : 
 
Subject : Case M. 9211 - TRANSDIGM GROUP/ESTERLINE 
TECHNOLOGIES  
Commission decision pursuant to Article 6(1)(b) of Council 
Regulation No  139/20041 and Article 57 of the Agreement on the 
European Economic Area2 
Dear Sir or Madam,  
(1) On 4 February 2019 , the Commission received notification of a concentration 
pursuant to Article 4 of the Merger Regulation  which would result from a 
proposed transaction  by which TransDigm  Group Incorporated (“ TransDigm ”), 
incorporated in the  United States , intends to acquire sole control , within the 
meaning of Article 3(1)(b) of the Merger Regulation , over the whole of Esterline 
Technologies Corporation  (“Esterline ) incorporated in the United States (“the 
Transaction” ). The concentration is to be accomplished by way of public bid 
announced on 10 October 20183. TransDigm  is designated hereinafter as “the 
Notifying Part y”. TransDigm and Esterline are together referred as “the Parties ”. 
The undertaking that would result from the Transaction is referred to as “the 
merged entity”.  
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation '). With effect from 1 December 2009,  the Treaty on 
the Functioning of the European Union ( 'TFEU ') has introduced certain changes, such as the 
replacement of  'Commu nity' by 'Union ' and 'common market ' by 'internal market '. The terminology of 
the TFEU will be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').  
3  Publication in the Official Journal of the European Union No C 57, 13.02.2019 , p. 27. PUB LIC VERSION  In the published version of this decision, some 
information has been omitted pursuant to Article 17(2) 
of Council Regulation (EC) No 139/2004  concerning 
non-disclosure of business secrets and other 
confidential information. The omissions are shown 
thus […]. Where possible the information omitted has 
been replaced by ranges of figures or a general 
description.  
 
2 1. THE PARTIES  
(2) TransDigm  is active in the design, production and supply of engineered aerospace 
components, systems and subsystems. Its products are used on both co mmercial 
and military aircraft […].  
(3) Esterline is active in the design, manufacture and marketing of highly engineered 
products, principally for aerospace and defence customers. Its products are also 
used in the rail, medical, gaming and other industries.  
2. THE TRANSACTION  
(4) The Transaction is to be achieved by means of a definitive merger agreement 
signed by the Parties on 9 October 2018, whereby TransDigm  will purchase all of 
the issued and outstanding shares of Esterline common stock in cash , thus 
acquir ing sole control over Esterline.4  
(5) The Transaction would therefore result in  a concentration within the meaning of  
Article 3(1)(b) of the Merger Regulation.  
3. UNION  DIMENSION  
(6) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 2 500 million ( TransDigm: EUR 3 229.6 million  and Esterline: 
EUR 1 710.1 million ) and a combined aggregate turnover of more than EUR […] 
in three Member States, namely France ( TransDigm: EUR […] and Esterline: 
EUR […]), Germany ( TransDigm: EUR […] and Esterline: EUR […]) and the 
United Kingdom ( TranDigm: EUR […] and Esterline: EUR […]). In addition, in 
each of th ose three Member States , the aggregate turnover of each of TransDigm 
and Esterline is more than  EUR  […]. Finally, each of the Parties has an ag gregate 
Union-wide turnover of more than  EUR […] (TransDigm: EUR […] and 
Esterline: EUR […]) and neither of them achieves more than two -thirds of its EU -
wide turnover within one and the same Member State.  
(7) The concentration  therefore has an EU dimension pu rsuant to Article 1(3) of the 
Merger Regulation.  
4. INTRODUCTION  TO THE AIRCRAFT MAN UFACTURING INDUSTRY  
4.1.  Aircraft models  
(8) The Parties are active in the manufacturing of components to be used in the 
aerospace industry. Those  components are procured by aircraft manufacturers and 
assembled on a range of different aircraft […]. Those components are used on 
                                                 
4  Pursuant to Article 5(2) of the EUMR, the Notifying Party also submi tted information on the earlier  
acquisition of Kirkhill -TA CO., a former Esterline subsidiary, by TransDigm in 2018 . The Kirkhill 
acquisition took place within two years of the  present transaction, but lacked EU dimension. There 
were no horizontal overlaps  or vertical links  between the activities of Kirkhill and those of TransDigm.   
 
3 both commercial and military aircraft […]. The commercial aircraft category 
includes:  
(i) large commercial aircraft […] (over 100 seats, which can cover a range of 
more than 2,000 nautical miles ); 
(ii) regional aircraft […] (between 30 and 90 seats , which can cover a range of  
less than 2,000 nautical miles); and  
(iii) business/corporate aircraft […]/jets, designed for corporate activities.  
4.2. Supply chain  
(9) The supply chain in the aer ospace industry mainly includes different types of 
suppliers: Tier -1 and Tier -2 suppliers  (sometimes Tier-3 suppliers also exist ). 
Tier-1 suppliers generally have integration capabilities and provide whole 
systems and equipment. Tier -2 suppliers tend to be  active at an upstream stage, 
supplying components and sub -components , which are later integrated into the 
systems/equipment by either the aircraft manufacturer or the Tier -1 supplier (or 
third -parties system integrators).  Tier-3 suppliers , further upstrea m in the supply 
chain,  are active in the supply of components to Tier -2 suppliers.  
(10) On the demand side, different types of customers purchase systems and 
equipment depending on the type of aircraft considered.  
a) For large commercial aircraft […]: depending on the system/equipment 
considered, purchasers are either (i) aircraft manufacturers ("airframers" or 
“OEM manufacturers”) with significant integration capabilities or (ii) end 
users – inter alia  airlines, lessors and national governments – which 
sometimes di rectly purchase certain equipment and systems from the Tier -1 
supplier ; 
b) Regional aircraft […]/corporate jets: systems and equipment are usually 
purchased by aircraft manufacturers who then resell the whole aircraft to end -
users ; and  
c) Military aircraft and he licopters: systems and equipment are usually 
purchased by aircraft and helicopter manufacturers, in some cases also the 
Ministry of Defence depending on the equipment or system considered. 
Helicopter/military aircraft manufacturers will in any case provide  the 
integration of main systems and equipment.  
(11) The Parties mainly operate as Tier 2 suppliers, but also have a Tier 1 and Tier 3 
position for certain products.  
4.3. Procurement process  
(12) In most cases, customers in the aircraft manufacturing industry source systems 
and equipment by means of competitive tender offers, often for the duration of the 
aircraft programme in question. The structure of the tender process can vary 
according to the aircraft type, customer involved or platform in question. 
Generally, the procedure involves a request for quotation (“RFQ”), the 
 
4 submission of competitive offers, followed by […] one or more rounds of final 
negotiations and by the provider selection.  
(13) Aircr aft manufacturers can either source products through build -to-print or build -
to-specification ("build -to-spec") processes. The build -to-print process requires 
the supplier to manufacture equipment, systems and components to the exact 
specifications provide d by the customer. The build -to-specification process, on 
the other hand, allows the supplier to use its own design (including proprietary 
design) and manufacturing skills.  
(14) In addition to providing components to OEM manufacturers, suppliers also 
provide co mponents to the aftermarket. Aftermarket products and services 
generally include the supply of spare parts, repair services and retrofit.   
(15) The procurement process for equipment and systems for military aircraft follows 
a specific pattern. Due to the low vo lume of aircraft […] and to the complexity of 
the integrated systems, the procurement process requires close cooperation 
between the airframer, the system supplier and the national procurement authority 
acting on behalf of the end -users.  
5. MARKET DEFINITION  
5.1. Product market definition  
(16) The Parties’ activities overlap in the supply of aerospace components in two main 
areas: (i) sensors, and (ii) clamps . This section also covers relevant markets 
whose vertical links give rise to vertically affected  markets , namely  (i) switches 
for electric switch boxes, (ii) relays for wire harnesses and cables, and (iii) rods 
for Ram air outlet package  
Horizontal  links  
5.1.1.  Sensors  
(17) Sensors are electronic components that have a given function, that is measuring a 
certain property, such as temperature, pressure, position, acceleration , and 
respond with feedback for analysis to a computer processor. In some instances 
(this is the case of both Parties ), sensors are also supplied  within assemblies , an 
integrated solution that combines  wire h arnessing ( that is,  wiring with a connector 
on either end) and one or more sensors.  
(18) The Commission  has previously briefly analyse d the market for sensors in the 
aerospace sector in Safran/Zodiac Aerospace .5 The Commission in that case di d 
not ultimately decide whether the market should be further divided into different 
types of sensors as no competition issues were deemed to arise under  any 
plausible alternativ e market definition.6 Outside of the aerospace industry, the 
Commission has  previously analysed the market for sensors in the automotive 
sector and defined separate product markets for different types of  of sensors based 
                                                 
5  Case M.8425, Safran/Zodiac Aerospace . 
6  Safran/Zodiac Aerospace , para 233.  
 
5 on their function (i.e. temperature sensors, pressure sensors, level sensors, speed 
sensors, accelerometers ).7         
(19) The Notifying Party considers that there is no need to segment the market for 
sensors  for the following reasons .  
(20) First, based on the high degree of supply -side substitutability, it considers that 
there is no need for a segmentation based on (i) the s ensor ’s function  (i.e. the 
physical parameter measured, such as temperature, speed, pressure, etc.); (ii) the 
application for which a sensor is used ( i.e. in engines, landing gear, fuel system, 
etc.); or (iii) the type of platforms on which it is deployed (i.e. different types of 
aircraft, commercial or military).  
(21) Second, it considers that there is no requirement to further segment the market on 
the basis of supply to (i) OEMs and aircraft manufacturers for original parts and 
as spares (“OEM channel”) and (ii) providers of maintenance, repair and overhaul 
services ("MROs") and airlines for repair and overhaul on the aftermarket 
(“aftermarket channel”), as similar competitive conditions apply equally in both 
scenarios.   
(22) In addition, the Notifying Party cons iders that harness assemblies used in 
combination with sensors in order to obtain sensor assemblies do not constitute 
separate products given that they are mostly sold as an integrated component of 
the Parties’ engine temperature sensors. The Notifying Par ty applies the same 
reasoning in order to conclude that thermocouples ( i.e. components used with 
engine temperature sensors) do not constitute a separate product.  
(23) With respect  to sensors  and their classification according to the abovementioned 
criteria , the market investigation has triggered mixed replies .  
(24) As to the possible segmentation of the overall market for sensors  according to  the 
function or  parameter measured (temperature, speed, pressure, etc.), s ome 
respondents argue  that, from a demand side, different technologies apply and 
different performances are required from different sensors.8 Sensors , some argue,  
should  be divided based on the parameter they measure  (i.e. temperature, 
pressure, speed)  or the environment  (i.e. engine, airframe, avionics)  they operate 
in.9  
(25) From a supply -side perspective, at  the same time, substitutability appears to be 
possible to a certain  extent  and subject  to certain conditions  (suppliers’ size,10 
ability to invest  the resources needed to carry the necessary R&D, to acquire the 
technology and the time necessary to obtain product approval by customers ).11  
                                                 
7  Case No IV/M.10 53, Mannesmann/Philips . 
8  Reply by  Thermocoax to question 7.1 of Q1 questionnaire to competitors of 5 February 2019.  
9  Replies to question 7.1 of Q 2 to customers of 5 February 2019, in particular those by MTU 
Maintenance and Leonardo.  
10  Reply by  Thermo coax to question 8.1 of Q1 questionnaire to competitors of 5 February 2019.  
11  Replies to question 8.1 of Q2 to customers of 5 February 2019.  
 
6 (26) As to a possible segmentation of sensors depending on the application for which a 
sensor is used  (i.e. in engines , landing gear, fuel system, etc.), respondents have 
submitted mixed replies.12 
(27)  As to a possible segmentation between sensors supplied for installation on 
different platforms, the results of the market investigation appear  to exclude a 
distinction between sensors used on the various aircraft […] or platforms (large 
aircraft […], regional aircraft […] and corporate jets  and commercial or military 
platforms ).13  
(25) Further, several respondents indicate that a segmentation between sensors 
supplied through the OEM and the aftermarket channels is not necessary , due to 
the fact that the products and the suppliers are essentially the same across the two 
channels .14  
(26) As to the possible segmentation between sensors supplied in isolation an d as a 
component of a  sensor  assembly including a harness, there is no indication, in the 
replies to the market investigation, that such segmentation is necessary.15 In 
addition, customers indicate that supply -side substitutability between sensors 
supplied on a standalone basis and as components of an assembly is possible, due 
to low switching costs.16 The same applies to thermocouples.  
(27) In any event,  for the purposes of this Decision, it can be left open whether the 
market for sensors should be segmented, sin ce no serious doubts as to the 
compa tibility of the notified concentration  with the internal market arise under 
any plausible market definition.  
5.1.2.  Clamps  
(28) Clamps provide support and restraint to minimise or eliminate the negative effects 
of vibration and shock loads. They typically consist of a metal ring with an 
elastomer cushion. Different providers however also supply clamps in a variety of 
material types, latching mechanisms and shapes depending on the specific design 
and installation requirements.  
(29) The Commission has not  previously  examine d the market for clamps. It has  
however,  considered the market for fasteners,17 a product with similar 
characteristics and use.18  In particular, it found that aerospace fasteners should be 
                                                 
12  Replies to question s 9 and 9.1  of Q2 to customers of 5 February 2019.  
13  Replies to questions 16.1 and 17.1 of Q2 to customers of 5 February 2019.  
14  Replies to questions 15 and 15.1 of Q2 to customers of 5 February 2019.  
15  Replies to questions 12, 12.1, 13, 13.1 and 13.2 to Q1 to competitors and replies to questions 12, 12.1, 
13, 13.1 and 13.2 to Q2 to customers of 5 February 2019.  
16  Replies to questions 13.2 of Q2 to customers of 5 February 2019.  
17  M.2928, Alcoa/Fairchild  and M. 8985, Boeing/KLX .  
18  Fasteners and clamps are both largely commoditised components used to attach one component to 
another within an aircraft. However, they serve quite different purposes and are not substitutable from 
a demand or supply perspective. Clamps are generally designed to “cradle” cylindrical components 
and assemblies such as wire harnesses, ducts, tubes and hosing, which by their nature require a 
fastening device through which they can be threaded. Fasteners, by contrast, are more akin to standard 
screws and bolts, and provide a means of attaching (generally non -cylindrical) parts to a structure or 
airframe.  
 
7 distinguished from other mains tream fasteners for industrial applications. The 
Commission also considered further segmentations according to (i) the type of 
aircraft platforms ( i.e. between large commercial aircraft, regional commercial 
aviation, etc.) and (ii) the application for whic h fasteners are used on each aircraft 
(e.g. airframe applications, engine applications, etc.) but, eventually, did not reach 
a conclusion on these potential segments.19  
(30) The Notifying Party considers that, similar ly to fasteners, clamps for aerospace 
applic ation constitute a distinct market. It however submits that there is no need 
to further segment the market for clamps  for the following reasons . First, based in 
particular on supply -side substitutability arguments, it considers that there is no 
need for a segmentation based on (i) the type of aircraft platform; (ii) the 
application for which clamps are used on each aircraft  (i.e. engine or airframe) ; 
and (iii) whether the clamps are “standard” clamps ( i.e. clamps that are built to 
common specifications usin g industry -standard materials) or “ specialty ” clamps 
(i.e. clamps that have a proprietary design or proprietary material elements for 
specific customers needs, for instance to achieve certain higher performance 
parameters in the engine).  
(31) Second, it consid ers that there is no requirement to further segment the market 
based on whether clamps are supplied (i) to the OEM or aftermarket channels or 
(ii) for commercial or military applications given that competitive conditions 
remain homogeneous in all cases.  
(32) With respect  to clamp classification , the market investigation has triggered mixed 
replies. A majority of respondents, particularly among customers, indicates  that 
clamps for aerospace use are different from common clamps for industrial use.20 
(33) As to a possible segmentation of aerospace clamps, based on the type of 
aircraft/platform they are installed on, respondents to the market investigation 
indicate  that clamps are standard components and do not vary according to the 
platform they are install ed on.21 
(34) In relation to any possible alternative segmentation of clamps based on the type of 
application ( e.g. airframe application, engine application, fuel applications) the 
results of the market investigation do not seem to support such distinction.22 
(35) As to the possible distinction between standard and specialty clamps, the market 
investigation led to mixed replies. The majority of respondents among 
competitors does not support the distinction,23 while a majority of respondents 
among customers indicates tha t, from a demand side perspective, such distinction 
exists.24 As to supply -side substitutability, competitors and customers have 
submitted mixed replies.25 Some customers indicate  that suppliers of standard 
                                                 
19  Alcoa/Fairchil d, para 11.  
20  Replies to questions 19 and 19.1 of Q2 questionnaire to customers of 5 February 2019.  
21  Replies to questions 20 and 20.1 of Q1 to competitors and of Q2 to customers of 5 February 2019.  
22  Replies to questions 24, 24.1, 24.1.1, 24.2, 24.2.1 of Q1 to competitors and replies to questions 23, 
23.1, 23.1.1, 23.2 and 23.2.1 of Q2 to customers of 5 February 2019.  
23  Replies to questions 21 and 21.1 of Q1 to competitors of 5 February 2019.  
24  Replies to questions 21 and 21.1 of Q2 to customers of 5 February 2019.  
25  Replies to questions 22, 22.1, 23 and 23.1 of Q1 to competitors of 5 February 2019; replies to 
questions 22 and 22.1 to Q2 to customers of 5 February 2019.  
 
8 clamps may not be able to start manufacturing speci alty clamps, due to 
intellectual property rights and other barriers to switching.26 As to a possible 
segmentation of clamps based on the production material, the market 
investigation triggered mixed replies27 and was thus  inconclusive. One competitor 
suggest s a possible distinction, within specialty clamps, between low -temperature 
and high -temperature clamps.28 
(36) Competitors provided mixed replies as to the possible segmentations between (i) 
clamps for the OEM market and the aftermarket and (ii) clamps for comme rcial 
platform use and defence platform use.29 Replies from customers seem to reject 
such additional segmentations.30 
(37) Based on the results of the market investigation, the Commission considers that a 
basic distinction would appear  to exist between clamps for  aerospace use and for 
generic industrial use . However, for the purposes of this Decision, t he question 
whether the market for aerospace clamps should be further segmented can be left 
open, as the concentration  does not raise serious doubts as to its compatibility 
with the internal market, regardless of the definition adopted.  
Vertical  links  
5.1.3.  Switches for electric switch boxes  
(38) Switches and buttons are installed within cockpit control panels for use by pilots 
to direct various functions within an aircraft.  The Commission has previously 
identified a distinct product market for cockpit components, including push -
buttons, switches and toggles.31 
(39) On the downstream market, switches and buttons are incorporated as compone nts 
within electric switch boxes, which are used to re -direct and re -arrange power 
cables.  The Notifying party considers that electric switch boxes  belong to the 
wider market for harnesses and cable assemblies, given that these are also means 
to re-direct and re -arrange power cables .32 
(40) The Commission considers that , for the purposes of this Decision,  the exact 
market definition of both the market for switches and buttons and the downstream 
market for electric switch boxes can be ultimately left open, as the vertical link  
between these markets does not raise serious doubts as to its compatibility with 
the internal market, regardless of the definition adopted.  
                                                 
26  Replies by Pattonair and Rolls -Royce to question 22.1 of Q2 to customers of 5 F ebruary 2019.  
27  Replies to questions 25, 25.1, 25.1.1, 25.2, 25.2.1 of Q1 to competitors and replies to questions 24, 
24.1, 24.1.1 and 24.2 of Q2 to customers of 5 February 2019.  
28  Reply by Step’N Components to question 25.1.1 of Q1 to competitors of 5 F ebruary 2019.  
29  Replies to questions 26, 26.1, 27 and 27.1 of Q1 to competitors of 5 February 2019.  
30  Replies to questions 25, 25.1, 26 and 26.1 of Q2 to customers of 5 February 2019.  
31  Safran/Zodiac Aerospace , para s 183(d) and 194.  
32  In this respect, see the product market definition previously considered by the Commission at 
paragraph 42 below.  
 
9 5.1.4.  Relays for wire harnesses and cables  
(41) Relays and relay sockets are commodity products. Relays are elect ro-mechanical 
devices which perform the task of switching electrical circuits, and form part of 
an aircraft’s electrical distribution system. The Commission has previously 
analysed the market for these products in Safran/Zodiac Aerospace , but its market 
investigation was not conclusive as to whether and how the market for different 
distribution components should be segmented. The Commission ultimately left 
the market definition open.33 
(42) On the downstream market, relays are incorporated in wire harness and cable 
assemblies . The Commission has previously considered a potential worldwide 
market for aerospace wiring systems (defined as “ assemblies of cables, called 
harnesses, designed to transmit electrical power, data and/or signals between two 
or more termina tion points ”) but ultimately left the definition open.34 The 
Commission also identified separate relevant product markets for the following 
wiring components: (i) cables; (ii) conduit and sleeves; (iii) backshells and 
fittings; and (iv) connectors.35  
(43) The Commission considers that , for the purposes of this Decision,  the exact 
market definition of both the market for relays and relay sockets and the 
downstream market for wire harnesses and cables can be ultimately  left open, as 
the vertical link  between thes e markets does not raise serious doubts as to its 
compatibility with the internal market, regardless of the definition adopted.  
5.1.5.  Rods for ram air outlet package  
(44) Rods, made of metal or of composite materials, can be used for multiple 
applications, within th e aerospace industry, including flight control, aircraft 
structure and door mechanisms.  
(45) Downstream, among various applications, rods are used into ram air outlets. The 
ram air outlet is a dual outlet channel used to enable the aircraft’s air generation 
unit to exhaust ram airflow. Ram airflow is used to transfer heat from the engine 
bleed air supply and cool it down before it enters the cabin air distribution system.  
(46) While the Commission has previously considered various other aerospace 
components to be fou nd within flight control,36 it has not yet considered a specific 
product market for rods in the aerospace . The Commiss ion has also not yet 
considered the market  for ram air outlet systems .  
(47) The Commission considers that, for the purposes of this Decision, t he exact 
market definition  of both the market for rods and the downstream market  for ram 
air outlet systems can be ultimately left open, as the vertical link  between these 
markets does not raise serious doubts as to its compatibility with the internal 
mark et, regardless of the definition adopted.  
                                                 
33  Safran/Zodiac Aerospace , paras 66 and 67.  
34  Safran/Zodiac Aerospace , para 205.  
35  Safran/Zodiac Aerospace , para 207.  
36  Most notably in M.8425 – Safran/Zodiac Aerospace , sections 5.8 -5.10.  
 
10 5.2. Geographic market definition  
(48) In Safran/Zodiac Aerospace37 and in  UTC/Rockwell Collins ,38 the Commission 
found that markets for aviation components and systems are worldwide in 
scope.39 The Commission examined a possib le narrower geographic scope ( i.e. 
EEA -wide, or even national) for systems and components for defence and 
military applications, but ultimately left such definition open.40 The Notifying 
Party agrees with the Commission ’s approach on the worldwide dimension of the 
relevant market s and argues that it is not necessary to adopt a narrower market 
definition for components for defence or military application.  
(49) In this respect, the replies to the market investigation  by competito rs were mixed  
(some rejected the notion of a global market, others agreed with it ),41 while  
customers consistently indicated that the geographic market for sensors, clamps  
and other components addressed in this Decision  (and the possible segments 
thereof)  are global in scope.42 
(50) In any event, t he Commission considers that the exact geographic market 
definition,  for the purposes of this Decision , can be left open in relation to all 
relevant product markets, as the concentration does not raise serious doubts as to 
its compatibility with the internal market, regardless of the definition adopted, 
namely worldwide or EEA -wide.  
6. COMPETITIVE ASSESSMEN T 
(51) Pursuant to  Article 2(2) and 2(3) of the Merger Regulation, the Commission  is 
required to examine whether notified concentration s are to be declared compatible 
or incompatible with the internal market by assessing whether they would 
significantly impede effective competition in the internal market or in a 
substantial part of it, in particular through the creation or stren gthening of a 
dominant position . 
(52) In this respect, a merger may entail horizontal and/or non -horizontal effects. 
Horizontal effects are those deriving from a concentration where the undertakings 
concerned are actual or potential competitors of each other in  one or more of the 
relevant markets concerned.  Non-horizontal effects are those deriving from a 
concentration where the undertakings concerned are active in different relevant 
markets. As regards non -horizontal effects, two broad types of such effects ma y 
be distinguished: vertical effects and conglomerate effects. Vertical effects are 
those deriving from a concentration where the undertakings concerned are acti ve 
at different levels of the supply chain . Conglomerate effects may result from 
mergers betwee n firms that are in a relationship, which is neither horizontal ( as 
competitors in the same relevant market) nor vertical (as suppliers or costumers)  
                                                 
37  Safran/Zodiac Aerospace , para 298.  
38  UTC/Rockwell Collins , para 207 ss.  
39  Safran/Zodiac Arospace , paras 297 -298. 
40  Safran/Zodiac Arospace , para 300.  
41  Replies to questions 30 and 30.1 of Q1 to competitors of 5 February 2019.  
42  Replies to questions 29 and 29.1 of Q2 to customers of 5 February 2019.  
 
11 (53) The Commission appraises horizontal effects in accordance with the guidance set 
out in the relevant notic e, that is to say the Horizontal Merger Guidelines .43 
Additionally, the Commission appraises non -horizontal effects in accordance with 
the guidance set out in the relevant notice, that is to say the Non -Horizontal 
Merger Guidelines .44 
(54) As noted above, TransDigm and Esterline are both suppliers of aerospace 
components and systems. However, the Notifying Party  submit s that their 
respective portfolio s of products are largely complementary and that their 
activities only overlap horizontally for a limited amount of products.  
(55) The Commission’s investigation confirms that the Parties' activities are largely 
complementary. Against this background, the concentration would give rise to 
horizontally affected markets  only in respect to (i) certain typ es of sensors 
(particularly temperature sensors) (Section 6.1.1 ) and (ii) aerospace clamps  
(Section 6.1.2 ).45  
(56) The concentration  also gives rise to three vertically affected markets with regard 
to the supply of : (i) switches for electrical switch boxes; (ii ) relays for wire 
harnesses and cables; and (iii) rods for ram air outlet package.  These markets are 
discussed in Section 6.2.  
(57) Finally, the Commission has also considered, in Section 6.3, the question of 
whether the concentration  would raise conglomerate concerns  since the Parties 
are active on a number of potentially related aerospace systems and components 
markets or segments .46 
                                                 
43  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings ("Horizontal Merger Gui delines"), OJ C 31, 05.02.2004.  
44 Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control 
of concentrations between undertakings ("Non -horizontal Merger Guidelines"), OJ C 265/6, 
18.10.2008.  
45  The Parties are also both active  on the markets for (i) p ilot controls  and (ii) Solid -state Power 
Controllers (SSPCs) . However, the Parties’ combined market shares on these markets and on any 
potential sub -segments within these markets are below 20% and these markets are therefore not 
horizontally affected.  
46  On day 23 of its phase 1 investigation, the Commission received a complaint from a customer of the 
Parties. This complaint does not relate to a specific type of product which is supplied by either 
TransDigm or Ester line but relates more generally to products for which Esterline is in a sole -producer 
position (i.e. the situation where a customer obtains a particular product or system exclusively from a 
single supplier). The complainant is concerned that TransDigm woul d impose price increases on sole -
sourced aerospace parts that it supplies from Esterline. The complainant also notes that its ability to 
switch to other suppliers is limited without providing further details on why this is the case. In support 
of its conce rns, […]. With respect to this complaint, the Commission notes that the potential barriers to 
switching in the case of products that are sole -sourced from Esterline already existed before the 
Transaction and would be the result of a customer ’s commercial c hoice to award a given contract to 
only one single supplier. In addition, as set out in this Decision, the Commission considers that 
sufficient alternatives will remain on the market for all the products and bundle s of products which are 
offered by the mer ged entity. The Commission therefore considers that the Transaction will not result 
in an increase of the potential barriers to switching for products that are sole -sourced from the Parties. 
Moreover, the Commission considers that the present complaint is not merger specific since the 
Transaction does not increase the merged entity’s ability and incentive to impose price increases for 
products that are sole -sourced from Esterline.  
 
12 6.1. Horizontal unilateral effects  
6.1.1.  Sensors  
(58) The Notifying Party submits that no competition concerns arise with respect to 
sensors given that (i) the Transaction only brings about a modest share increments 
globally and in the EEA; (ii) a number of strong competitors will continue to 
exert competitive pressure on the merged entity, including for engine tempe rature 
sensors ; (iii) based on recent and upcoming tenders, […];47 (iv) the Parties’ 
customers have significant countervailing negotiation power and could, if needed, 
start the production of sensors in -house or sponsor a new entrant; (v) the Parties 
are not the closest competitors; (v i) it is not possible to exercise any portfolio 
advantage through diversified sensor range; and (vii) market entry is relatively 
easy with low ba rriers to entry and expansion.  
(59) First, the Commission notes that on a market including all aerospace sensors the 
Parties have a limited combined market share . The Parties’ combined market 
share in 2018 is below [10-20]%  at the worldwide level and below [10-20]%  at 
the EEA level with TransDigm representing an increment of less than [0-5]% 
both at the worldwide and EE A level.  
(60) Second, w ith respect to the potential segments and sub -segments on which the 
Parties overlap ( namely, (i) temperature, (ii) speed and (iii) flow sensors48), the 
Parties’ combined market shares  remain moderate . The Parties’ combined market 
shares always remain below [20-30]% except for temperature sensors for which 
the Parties’ combined market share is  [20-30]% at the worldwide level ( [5-10]% 
share increment) and [20-30]% at the EEA level ( [0-5]% share increment). Within 
temperature sensors, the Parties’ combined market shares are below [30-40]% for 
all the potential sub -segments except for engine temperature sensors at the 
worldwide level ( [30-40]% with a [10-20]% share increment) and at the EEA 
level ( [30-40]% wit h a [0-5]% share increment). With respect to the other 
potential segmentations  discussed in Section 5.1.1, the Notifying Party did not 
provide market share estimates , but it has confirmed that it does not expect 
significant differences in the level of the Parties’ combined market shares.  
(61) Third, the Commission notes  that there are several large  alternative competitors 
that will remain  active  in the aerospace sensors market and in the potential 
segments for temperature sensor s and engine temperature  sensors both at the 
worldwide and EEA level , including four competitors with a market share above 
10% (i.e. Ametek, Meggit, UTC and GE49). The market share of the Parties and 
their competitors on the potential market segments in which the combined market 
share of the Parties is above 25% ( i.e. temperature sensors and engine temperature 
                                                 
47  While the affected markets which are discussed in this decision are mostly  bidding markets for which 
market shares - as opposed to bidding data - may not always provide a fully accurate picture of the 
actual competitive strength of market players, the Commission considers that, for the purposes of this 
decision, the 2018 market shares provided by the Parties and the additional evidence gathered as part 
of the market investigation provide sufficient evidence in order to conclude that the Transaction does 
not raise serious doubts as to its compatibility with the internal market.  
48  In addition to these segments, Esterline is active on the pressure sensors segment. […]  
49  The Notifying Party also estimates that Honeywell has a market share of [10-20]%  on a market 
including all aerospace sensors both at the worldwide and EEA level. However, Honeywell is not 
active in the potential temperature sensor and engine temperature sub -segments.  

 
14 (63) Finally, the vast majority of the respondents do not expect that  the Transaction 
would have any impact on the market for the supply of sensors or temperature 
sensors  and none of the respondent have  expressed any specific complaints with 
respect to the impact of the Transaction on the supply of sensors.55     
(64) In light of  the above considerations and taking account of the results of the market 
investigation , the Commission  considers that the Transaction does not raise 
serious doubts  regarding the compatibility of the concentration with the internal 
market with respect to t he market for the supply of sensors . 
6.1.2.  Clamps  
(65) The Notifying Party submits that no competition concerns arise with respect to 
clamps given that (i) the Parties are not close competitors; (ii) a number of strong 
competitors will continue to exert competitive pressure on the merged entity; (iii) 
the Part ies’ customers have significant countervailing negotiation power and 
could, if needed, start the in -house production of clamps or sponsor a new entrant; 
(iv) market entry is relatively easy with low barriers to entry and expansion; in 
particular a supplier  of standard clamps can easily expand into specialty  design 
clamps with a limited investment.   
(66) First, the Commission notes that on a market including all aerospace clamps the 
Parties ’ combined market share will be limited at the EEA level and will remain 
moderate at the worldwide level. The Parties’ combined market share in 2018 is 
[10-20]% at the EEA level with TransDigm only representing a [0-5]% share 
increment an d [20-30]% at the w orldwide level ( [5-10]% share increment).  
(67) Second, with respect to the potential segments and sub -segments on which the 
Parties overlap  (namely,  (i) standard clamps; (ii) specialty  clamps; and (iii) 
specialty  clamps for high temperature application), the T ransaction does not give 
rise to any affected market at the EEA level. At the worldwide level, the market 
for standard clamps is also not affected given that the Parties combined market 
share is below [10-20]%. As regards specialty  clamps at the worldwide level, the 
Parties’ combined market shares is approximately [30-40]% with TransDigm 
representing an increment of approximately [5-10]%  both on a potential market 
segment including all the specialty  clamps and on a potential sub -segment for 
specialty  clamp s for high temperature application.  With respect to the other 
potential segmentations which are discussed in section 5.1.2, the Notifying Party 
did not provide market share estimates, but it has confirmed that it does not 
expect significant differences in the level of the Parties’ combined market shares.  
(68) Third, the Commission notes  that there are a number of alternative competitors 
that will remain  active in the aerospace clamps  market and in the potential 
segments for specialty  clamps and specialty  clamps for high temperature 
application at the worldwide level . The market share of the Parties and the ir 
competitors on the affected clamps market and potential market segment s (i.e. all 
aerospace  clamps and specialty  clamps  at the worldwide level ) can b e seen in 
Table 2. In addition, a number of the below listed competitors offer both standard 
and specialty  clamps ( i.e. UMPCO, J&M, Pacmet, Caillau).  
                                                 
55  See responses to q uestion s 43, 44 and 45 of Q1 – Questionnaire to competitors and 40, 41 and 42 of 
Q2 – Questionnaire to customers.  

 
16 they purchase  elastomeric material for incorporation in their clamp products from 
a number of third party suppliers including for example Santa Fe Rubber, S&H 
Rubber Inc., Goodyear Rubber Co, West Coast Gasket, Custom Fabrica ted 
Product, Wacker, Volker, DuPont  and AGC.58          
(71) Fourth, the Parties are not close competitors for clamps. As explained above, 
unlike Esterline, TransDigm does not have  manufacturing capability for the 
elastomeric material used in clamps for high tem perature application. In addition,  
TransDigm’s offering is restricted to metal clamps whereas Esterline also supplies 
clamps made of other materials ( e.g. plastic). Esterline also has a stronger focus 
on specialty  clamps. This is largely confirmed by the r esults of the market 
investigation. In particular, a large majority of customers  have indicated that they 
do not consider TransDigm and Esterline to be close competitors on clamps with 
one respondent stating for example  “Transdigm and Esterline provide dif ferent 
types of clamps ”.59      
(72) Fifth, most of the respondent to the market investigation (in particular customers) 
do not anticipate that the Transaction could have an adverse impact on the market 
for clamps.60 In this regard, one respondent has for example  explained that it sees 
clamps as a “commodity”.61 A number of respondents (in particular competitors) 
have however indicated that the Transaction combines two large clamp players 
and could  therefore  result in price increases  in particular for specialty  clamps f or 
high temperature application . In this regard, as explained in more details at 
paragraphs (69) to (72), the Commission considers that sufficient alternative 
suppliers would remain active in the clamps market  including for the potential 
sub-segment of specialty  clamps for high temperature application . 
(73) In light of the above considerations and taking account of the results of the market 
investigation, the Commission considers that the Transaction does not raise 
serious doubts  regarding the compatibility of the concentration with the internal 
market with respect to the market for the supply of clamps.     
6.2. Vertical effects  
(74) Overall, the c urrent and potential vertical relationships between the Parties are 
limited amou nting to a total of less than USD […].  
(75) The Notifying Party submits that no foreclosure concerns are likely to arise given 
(i) the presence of a large number of residual suppliers on each of the vertically 
affected markets and (ii) the limited downstream p resence for each of the relevant 
                                                 
58  Esterline also  supplies elastomeric material  downstream. However, this vertical relationship does not 
give rise to a risk of input foreclosure given that a number of alternative suppliers are active on the 
supply of elastomeric material (including for plybenzimidazole fiber where Custom Fabricated 
Products and AGC are two examples of alternative suppliers). In addition, none of the respondents to 
the market investigation raised specific concerns with respect to their supply of elastomeric materials.     
59  See responses to q uestion 48 of Q2 – Questio nnaire to customers  and Airbus reply to question 48.1 of 
Q2 – Questionnaire to customers . 
60  See responses to q uestion s 52 and 53 of Q2 – Questionnaire to customers  and Questions 57 and 58 of 
Q1 – Questionnaire to competitors. In addition, the Commission h as received additional feedback from 
certain market players by email.  
61 See GKN Aerospace response to q uestion 46.1 of Q2 – Questionnaire to customers . 
 
17 vertical relationships which means that the rewards of an hypothetical input 
foreclosure strategy is highly unlikely to outweigh the costs.  
6.2.1.  Switches for electrical switch boxes  
(76) Esterline is active on the market with regard  to the supply of switches and buttons 
for electrical  switch boxes where, on the narrowest component basis, it has a 
worldwide market share for push -button switches of approximately [30-40]% 
(approximately [10-20]% at the EEA level). TransDigm is a custome r in this 
market since it purchases various switches from Esterline.   
(77) As regards potential concerns related to input foreclosure, the merged entity 
would not have any incentive to foreclose access to Esterline’s switches  and 
buttons . Esterline  generate d total worldwide sales in 2018 of approximately USD 
[…] for push -button switches,  while TransDigm’s total spend on push button 
switches in 2018 was approximately USD […].62 The rewards of foreclosing 
access to Esterline’s swi tches and buttons would therefor e not seem to 
compensate  the reduction of sales in the switches and buttons market . Moreover,  
any potential  foreclosure strategy is likely to be ineffective given that TransDigm 
has a very limited presence on the downstream market for electrical switch box es 
where its market share is less than [0-5]% at the worldwide and EEA level63 and 
several strong competitors are present  on this market . 
(78) In addition , most of the respondents to the market investigation do not expect that 
the merged entity would have the ability and incentives to restrict third party 
access to push button switches  or do not have a view on this question .64  
(79) As regards potential concerns related to customer foreclosure, as mentioned 
above, the merged entity only has a very limited presence on  the downstream 
market for electrical switch boxes . Hence,  the merged entity would have no 
ability to foreclose in the first place. I n the event that post -merger TransDigm 
were to source all its switches and buttons from Esterline, it would not materially 
change the competitive dynamics on the market for electrical switch boxes.  
(80) In light of the above considerations and taking account of the results of the market 
investigation, the Commission considers that the Transaction does not raise 
serious doubts regar ding the compatibility of the concentration with the internal 
market with respect to potential foreclosure strategies in relation to the supply of 
switches and buttons for electrical switch boxes.  
                                                 
62  TransDigm total purchases from Esterline were approximately USD […] in 2018 and approximately 
USD […] in 2017. Tr ansDigm accounts for less than [0 -5]% of Esterline’s total sales of push button 
switches at the worldwide and at the EEA level.  
63  TransDigm’s activity is similarly very limited on the wider downstream market for wire harnesses and 
cable ass emblies. On such a market, TransDigm’s market share remains below [0-5]% at the 
worldwide and EEA level.    
64  See responses to q uestion 57 of Q2 – Questionnaire to customers.  It should however be noted that a 
significant number of respondents indicated tha t they are not sufficiently informed in order to take a 
view.  
 
18 6.2.2.  Relays for wire harnesses and cables  
(81) Esterline is active on  the market with regard to the supply of aerospace relays for 
wire harnesses and cables where, it has a worldwide market share of 
approximately [40-50]% at the worldwide level and approximately [40-50]% at 
the EEA level. TransDigm is a customer in this mar ket since it purchases relays 
and relay sockets from Esterline.   
(82) As regards potential concerns related to input foreclosure, the merged entity 
would not have any incentive to foreclose access to Esterline’s aerospace relays .  
Esterline generated total worldwide sales in 2017 of approximately USD […] for 
relays, where its sales to TransDigm amounted to USD […] in total.65 While  
Esterline only made up approximately […] of TransDigm’s total spend on relays 
and relays sockets , TransDigm’s total spend ( i.e. from Esterline and other third 
party suppliers)  still constitutes […] of Esterline’s total sales of relay and relays 
sockets. The rewards of foreclosing access to Esterline’s relays and relay sockets 
would therefore not seem to compensate the reduction of  sales in the relays and 
relay sockets market. Moreover, any potential foreclosure strategy is likely to be 
ineffective given that TransDigm has a very limited presence on the downstream 
market for wire harnesses and cables where its market share is less t han [0-5]% at 
the worldwide and EEA level66 and several strong competitors are present on this 
market.  
(83) In addition , most of the respondents to the market investigation indicated that 
they do not expect that the merged entity would have the ability and incen tives to 
restrict third party access to relays and relay sockets  or do not have a view on this 
question .67  
(84) As regards potential concerns related to customer foreclosure, as mentioned 
above, the merged entity only has a very limited presence on the downstream 
market for wire harnesses and cables . Hence,  the merged entity would have no 
ability to foreclose in the  first place. In the event that post -merger TransDigm 
were to source all its relays and relay sockets  from Esterline, it would not 
materially change the competitive dynamics on the market for wire harnesses and 
cables . 
(85) In light of the above considerations and taking account of the results of the market 
investigation, the Commission considers that the Transaction does not raise 
serious doubts regarding the compatibility of the concentration with the internal 
market with respect to potential foreclosure strat egies in relation to the supply of 
relays for wire harnesses and cables . 
6.2.3.  Rods for ram air outlet package  
(86) TransDigm is active on the market with regard to the supply of rods for ram air 
outlet package , where  it has a market share for rods for aerospace appl ications of 
                                                 
65  TransDigm accounts for less than [0-5]% of Esterline’s total sales of push button switches at the 
worldwide and less than  5% at the  EEA level.  
66  TransDigm’s activity is similarly  very limi ted on the wider  downstream market for wire harnesses and 
cable assemblies. On such a market, TransDigm’s market share remains below [0-5]% at the 
worldwide and EEA level.   
67  See responses to q uestion 60 of Q2 – Questionnaire to customers.  
 
19 approximately [30-40]% at the worldwide level and approximately [30-40]% at 
the EEA level .68 Esterline  is a customer in this market since it purchases relays 
and relay sockets from TransDigm .  
(87) As regards potential concerns related to input forec losure, the merged entity 
would not have any incentive to foreclose access to TransDigm ’s rods for 
aerospace applications . TransDigm currently generates total worldwide sales of 
rods of approximately USD […], while Esterline’s total spend on rods in 2018  
amount ed to less than USD […].69 The rewards of foreclosing access to 
TransDigm’s rods would therefore not compensate the reduction of sales in the 
rods market. It is therefore highly unlikely that the merged entity would engage in 
such a strategy.  Moreover, any potential foreclosure strategy is likely to be 
ineffective given that Esterline has a limited presence on the downstream market 
for ram air outlet systems where its market share is less than 5% at the worldwide 
and EEA level  and several strong  competitors are present on this market.  
(88) In addition , none  of the respondents to the market investigation expect s that the 
merged entity would have the ability and incentives to restrict third party access 
to rods for aerospace applications .70  
(89) As regards p otential concerns related to customer foreclosure, as mentioned 
above, the merged entity only has a limited presence on the downstream market 
for ram air outlet systems . Hence,  the merged entity would have no ability to 
foreclose in the first place. In  the event that post -merger Esterline  were to source 
all its rods from TransDigm , it would not materially change the competitive 
dynamics on the market for wire harnesses and cables.  
(90) In light of the above considerations and taking account of the results of the  market 
investigation, the Commission considers that the Transaction does not raise  
serious doubts regarding the compatibility of the concentration with the internal 
market with respect to potential foreclosure strategies in relation to the supply of 
rods for ram air outlet package . 
6.3. Conglomerate effects  
(91) Pursuant to the Non -Horizontal Merger Guidelines, in most circumstances, 
conglomerate mergers do not lead to any competition problems. However, 
foreclosure effects may arise in conglomerate mergers when the combination of 
products in related markets may confer on the merged entity the ability and 
incentive to leverage a strong market position from one market to another closely 
related market by means of tying or bundling or other exclusionary practices.  
(92) The T ransaction could potentially lead to  conglomerate effects since (i) it will 
allow the merged entity to broaden its portfolio of aerospace systems and 
components; and (ii) the merged entity will hold market shares above 30% on a 
                                                 
68  TransDigm’ market share is similar on potential narrower markets segmented according to the material 
used. In addition, Esterline uses these rods […]. 
69  […].  
70  See responses to q uestion 62 of Q2 – Questionnaire to customers.   
 
20 number of potentially related aerospace systems and components markets  or 
segments .71 
(93) The Commission has very recently considered and rejected conglomerate effects 
with respect to the supply of aerospace systems and components in the case 
UTC/Rockwell Collins . In particular, the  Commission investigated whether that 
merged entity would be able to use the breadth of its portfolio to shut out 
competitors, through practices such as bundling or tying, and concluded that it 
would have neither the ability nor the incentive to engage in such strategies and 
harm competition.  
(94) The Notifying Party submits that the same reasoning and conclusion should apply 
in the present case given that (i) the Parties’ products only account for a very 
small proportion of components within the major aircraft  programs where they 
are both presents; (ii) there is nothing unique about the Parties’ products as the 
Parties’ customers will continue to have a range of alternatives to choose from 
post-Transaction; (iii) the structure of procurement in tenders for sepa rate 
components and/or “packages” significantly limits the scope for pursuing any 
bundling strategies; (iv) the Parties’ key customers are large powerful companies 
which are able to exercise significant negotiating leverage and employ a 
combination of stra tegies to discipline components suppliers; and (v) the Parties’ 
competitors are large diversified aerospace companies which could easily 
replicate any hypothetical bundling strategies adopted by the Parties.  
(95) In this respect, the Commission f irstly notes t hat, taking a broad perspective on 
the importance of the merged entity , while TransDigm and Esterline are both 
present to varying degrees on each of the ten major existing large commercial 
aircraft platforms72 and regional and business jets platforms,73 their products 
account for only a very small proportion of components within any of those 
aircraft programmes . By way of example, a Boeing 737 family aircraft or an 
Airbus A320 family aircraft costs in the region of USD 100 million. On either of 
those platform s, the cost of TransDigm’s components would represent well below 
[0-5]%.74 This would also generally be the case for Esterline’s products, which 
estimates that the value of its components on each of  the programmes above 
would not  exceed [0-5]% of the cost o f each aircraft.   
(96) Second, while the  market investigation  has showed  that there is a certain room for 
commercial bundling ,75 it has also confirmed  that customers , some of which may 
                                                 
71  In addition to the horizontally and vertically affected markets that are discussed in this decision, these 
include the worldwide market for (i) aerospace knobs where Esterline has a [30-40]-[30-40]% market 
share, (ii) rotary switches where, on the narrowes t component basis, Esterline has a [30-40]-[40-50]% 
market share, and (iii) for cockpit components such as push buttons, switches and knobs where 
Esterline has a market share of approximately [30-40]%. 
72  The Parties consider that the following ten program mes represent the vast majority of large 
commercial aircraft in operation at present: (i) Boeing: 737NG, 737MAX, 767, 777, 787; and (ii) 
Airbus: A320, A320Neo, A330, A50, A380.  
73  The Notifying Party considers the following ten programmes to be the most si gnificant regional and 
business jet platforms, based on current build rates (i.e. the number of aircraft currently in production): 
(i) Embraer: 170/175, 190/195, Phenom 300; (ii) Airbus: A220; (iii) Bombardier: CRJ 900, Global 
5000; (iv) Cessna: Citation, Latitude; (v) Hawker: Kingair; and (vi) Gulfstream: G650.  
74  This would also be true of larger aircraft platforms like the Boeing 787 and Airbus A250, and smaller 
regional and business jet platforms.  
75  See responses to q uestion 66 of Q2 – Questionnaire to  customers . 
 
21 hold a significant buyer power due to the concentrated structure of the marke t, are 
generally  in the driving seat to formulate the scope of the tenders. For example , 
with respect to potential bundles including several type of aerospace sensors , one 
customer stated “ some sensors may deliberately be split into packages ”76 and 
another one “ depending on programme procurement policy, sensors may be 
procured in global work packages or individually ”.77  
(97) Third , only a fraction of respondents to the market investigation identified 
products of the merged entity , which they considered to be un ique or  a ‘must -
have’ and which could  therefore potentially  help rendering a tying or commercial 
bundling scenario successful. These products however mostly concerned sensors 
and clamps for which, as explained above in sectio ns 6.1.1  and 6.1.2 , there will 
still be sufficient alternatives on the market following the Transaction. O ne 
respondent also specifically commented that there are no alternative s to the 
Parties for push button  switches without however providing further exp lanation 
on how bundling and tying could materialize and how this could lead to harming 
competit ion. The Commission however considers that sufficient alternatives will 
remain on the market for push button switches . These include  in particular  Zodiac 
Aerosp ace (with a worldwide market share of approximately [30-40]%), Eaton 
(approximately [10-20]%), Applied Avionics (approximately [5-10]%), 
Ducommun (approximately [0-5]%) and Staco (approximately [5-10]%). 
(98) Fourth, following the Transaction, the merged entity  will compete with a number 
of large diversified aerospace companies, which also offer a wide variety of 
products. These companies include for example UTC, Meggit and Honeywell.  
These companies’ product portfolio s overlap with that of the merged entity for  a 
significant number of products. As such, these companies would be able to adopt 
a number of counter strategies to nullify any attempt of the merger entity to 
foreclose them through bundling or discounting bundled products. For example, 
they could offer similar or different bundles and discounts of their own.      
(99) Finally,  most of the respondents to the market investigation indicated that they do 
not expect that the merged entity would have the ability and incentives  to bundle 
certain product s for which t hey have a market share above 30%78 with any other 
products.79 While a number of respondents still mentioned certain  possible 
bundles that the merged entity could potentially offer ( e.g. between relays and 
SSPC or between sensor s and ignition systems), most  of these respondents also 
expressly commented that they would not be harmed by such bundles  including 
because they would have the “strength to break the bundle if require d”.80 As 
regards potential tying strateg ies, the vast majority of the respondents to th e 
market investigation indicated that they do not expect that the merged entity 
would have the ability and incentives  to tie certain product for which they have a 
                                                 
76  See Rolls Royce’s response to question 39.1 of Q2 – Questionnaire to customers . 
77  See Airbus response to question 39.1 of Q2 – Questionnaire to customers . 
78  These include temperature sensors, clamps, push button switches, relays and relay sockets and rods for 
aerospace applications.  
79  See responses to q uestion 67 of Q2 – Questionnaire to customers  and 65  of Q 1 – Questionnaire to 
competitor s. 
80  See Rolls Royce’s response to question 67.6 of Q2 – Questionnaire to customers . 
 
22 market share above 30% with any other products.81 Overall none of the 
respondents have voiced a specific concern explaining how tying or bundling 
could materialize and how this could lead to harming competition.  
(100)  In light of the above considerations and taking account of the results of the market 
investi gation, t he Commission considers that  the Transaction does not raise 
serious doubts as to its compatibility with the internal market with respect to 
conglomerate effects as the merged entity would have neither the ability, nor it is 
likely to have the ince ntive, to foreclose rivals through a bundling/tying strategy.  
7. CONCLUSION  
(101)  For the above reasons, the Commission has decided not to oppose the notified 
concentration  and to declare it compatible with the internal  market and with the 
EEA Agreement. This Decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement . 
 
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission  
 
 
 
                                                 
81  See responses to q uestion 68 of Q2 – Questionnaire to customers  and 66  of Q 1 – Questionnaire to 
competitor s.