Alan George/LONDON

The European Commission's (EC) competition authorities have extended by a month their first-phase investigation of the proposed merger of DaimlerChrysler Aerospace, Aerospatiale Matra and CASA to form the European Aeronautic, Defense and Space (EADS) company. Brussels acted after some documents from EADS were found to be deficient.

The companies - which would form Europe's largest aerospace company, with a turnover of $22 billion if the merger is approved - had hoped the deal would be approved within a month of the submission of documents in late February. The EC's Directorate-General Competition (formerly known as DG IV) declared last week, however, that the submission was "incomplete".

The companies were given a choice: to agree to the clock being stopped for a month, pending completion of enquiries; or to accept that the merger should go to a full - and potentially lengthy - second-phase enquiry.

The companies took the first option and have been presented with a series of additional questions by the investigators. It is understood that the questions are not causing concern to the companies, which regard the development as a technical matter without deeper implications.

The EC's competition regulation procedures provide for an initial one-month investigation. If no reason emerges to block or amend a merger, it will be approved at that point. If the merger is approved, but with agreed conditions, there is a fast-track procedure which takes six weeks from the start of the first-phase enquiry. A second-phase investigation could take months.

The EADS partners have announced plans for a mid-year flotation, but it is understood that the timing will depend on regulatory clearance. The companies hope that Brussels will approve the merger by mid-May.

Source: Flight International