The European Commission has given the Intel / STMicroelectronics
joint venture the green light as far as competition law is
concerned.
"The Commission concluded that the transaction would not
significantly impede effective competition in the European Economic
Area (EEA) or any substantial part of it," said a Commission
statement.
Private equity company Francisco Partners will back the new
company, which will make flash memory. The market for flash memory
is highly competitive. The technology is used in MP3 players,
mobile phones and digital cameras, but it could soon replace hard
disc drives in computers.
The new Switzerland based company will be six per cent owned by
Francisco Partners, which will pay $150 million for its stake. The
rest of the company will be owned by Intel and STMicroelectronics,
with Intel holding a slightly smaller stake.
The Commission said that it had investigated the markets for
both of the main kinds of flash memory. "The Commission found that
strong competitors are present for each of these products and
customers would be able to continue sourcing their needs from a
sufficient number of alternative vendors," it said.
Intel is facing a charge of anti-competitive behaviour from the
Commission over its alleged tactics in the market for computer
chips, its main business. The Commission produced a Statement of
Objections last month detailing what it says are acts designed to
prevent competitor Advanced Micro Devices (AMD) gaining a market
share.
The Commission said that it believed that Intel had an "overall
anti-competitive strategy" whose elements breached the rules of the
EC Treaty in three distinct ways.
It said that Intel had offered larger rebates to PC makers who
used its chips and not AMD's, that it paid manufacturers to delay
products containing AMD chips and that it offered server chips
below cost price to selected customers.
The Commission can fine Intel over those allegations if it finds
them to be true, or it can order that it change its behaviour.
Intel can request an oral hearing in relation to the claims. It
denies anti-competitive behaviour.
