What’s Going On Here?

French tech titan Dassault Systèmes announced a $6 billion acquisition of American software company Medidata Solutions, shining a light on previously announced major marriages…

What Does This Mean?

“Analytics” seems to be a buzzword right now:

• Salesforce’s purchase helping its customers make more sales to you;
• Medidata’s tools helping biotech and pharma companies keep track of their drugs during clinical trials;
• Dassault (spanning transport and aerospace), will add Medidata to its already brimming software arsenal and become a bigger one-stop shop for its customers.

Regulatory:

• The completion of Dassault’s deal is subject to regulatory approval (as per usual)
• But investors may take particular interest given that several major deals have recently hit regulatory roadblocks…

Why Should I Care?

For markets: Might the US follow in Europe’s footsteps?

European competition regulators have suffered the worst part of irritation lately as they’ve stood in the way of major company tie-ups, including

• steel firms Thyssenkrupp and Tata Steel’s union;
• grocer Sainsbury’s $20 billion merger with Walmart-owned Asda.

In both instances, regulators thought that too few competitors would

• limit customer choice and
• lead to unfairly high product prices.

Now, the US government may join the chorus: it’s worried that the proposed merger between United Technologies and Raytheon might leave it subject to more expensive defense contracts.

The bigger picture: Regulators don’t have it easy.

After much distress, telecoms companies T-Mobile US and Sprint agreed to join forces last year.

• They too were under control of competition authorities, and
• Commit to spending on countrywide 5G rollouts (which, while expensive, were already planned).

But ten US states have since banded together to block the merger, arguing that consumers will ultimately lose out. Shares of both companies fell this week – and may fall further if they’re ultimately forced to remain divided.

Content source: Finimize. (2019) Dassault, Folks. Available from: https://www.finimize.com/wp/news/dassault-folks/ [Accessed 18 June 2019]