ACCC will not oppose Thales-Gemalto deal

20 December 2018

The ACCC has decided not to oppose Thales S.A.’s proposed acquisition of Gemalto N.V, after accepting a court-enforceable undertaking from Thales to divest part of its business.

French company Thales and Dutch company Gemalto both supply data security products, including enterprise encryption software and hardware security modules (HSM) in Australia.

The ACCC’s investigation focused on the markets for the supply of general purpose (GP) HSMs and payment HSMs.

The acquisition involves a global transaction and is subject to review by several international competition agencies. During its review, the ACCC liaised closely with overseas agencies, including the European Commission, the US Department of Justice and the New Zealand Commerce Commission.

“Thales and Gemalto are each other’s closest competitors and the two largest suppliers of GP HSMs worldwide and in Australia. The ACCC was therefore concerned about the removal of Gemalto as a competitor of Thales in relation to the development and sale of GP HSMs,” ACCC Commissioner Roger Featherston said.

“We concluded that, without the divestiture undertaking, the proposed acquisition was likely to substantially lessen competition in Australia.”

To remedy these competition concerns, Thales provided a court-enforceable undertaking to sell its global GP HSM business to an ACCC approved purchaser. The undertaking is linked to the commitment made by Thales to the European Commission, reflecting the global nature of the divestiture obligations.

“As a result of the divestiture undertaking, a new or established global supplier will have the opportunity to acquire Thales’ successful nShield HSM brand and assets,” Mr Featherston said.

“While payment HSMs also raised concerns in Australia since the two parties supply the vast majority of Australian customers, the ACCC took into consideration that the market in Australia is very small, the level of global competition, together with declining barriers to entry for international suppliers to enter Australia.”

The ACCC will issue a public competition assessment in due course. Further information is available at the public register.


Thales is an international technology electronics and communications group registered in France and listed on the Euronext Stock Exchange in Paris.

Thales provides systems and electronic services across five sectors: aeronautics, space, ground transportation, defence, and security. In 2017, it had operations in 56 countries with approximately 64,100 employees. Thales has operations in every mainland state and territory in Australia.

Gemalto is an international digital security company registered in the Netherlands and listed on the Euronext Stock Exchange in Paris and Amsterdam.

Gemalto is active internationally in the development, manufacture or supply of, and the provision of services relating to, data encryption and security technologies and communications systems. In 2017, it had operations in 47 countries and 15,000 employees.

Gemalto’s Australian operations are based in Melbourne and Sydney. Thales and Gemalto supply hardware security modules (HSMs), which are tamper-resistant hardware devices that run on encryption software and generate keys, encrypt and decrypt data and verify digital signatures to provide security of a customer’s applications and data.

Payment HSMs are similar to general purpose (GP) HSMs, but also have payment-related functionality and perform a large volume of payment operations and transaction processing.

Payment HSMs are typically used by the retail banking industry.

The proposed acquisition required review by competition authorities in other jurisdictions and received conditional clearance by the European Commission on 11 December 2018.

The undertaking provided to the ACCC incorporates Thales’ commitment to the EC to divest its GP HSM business, and requires any purchaser of the divestiture business to be approved by the ACCC.

This approval process will take into account the ability and intention of the proposed purchaser to maintain and operate the business in Australia.


Release number: 
ACCC Infocentre: 

Use this form to make a general enquiry.

Media enquiries: 
Media team - 1300 138 917