BRUSSELS Ė European Union antitrust authorities conditionally approved on Tuesday French aerospace-and-defense group Thalesí proposed 4.8 billion euro ($5.47 billion) takeover of Dutch rival Gemalto.
The approval is contingent on Thales selling its general purpose hardware-security-modules business, which trades under the nShield brand, the regulator said.
Hardware security modules are data-security appliances that generate and manage encryption keys that are used to protect data in a secure tamper-resistant module.
As Thales and Gemalto are the two largest global manufacturers of HSMs, the merger in its original form would have led to the combined company holding a high market share, the EU said.
The merger would also have eliminated the competitive constraints that the two companies currently exercise on each other.
Selling the business fully removes the overlap between Thalesís and Gemaltoís activities, the regulator said.