Brussels 1/191/17; London 1/19/17—The European Commission (EC) has moved closer to final approval of Smiths’ $723.7 million acquisition of Morpho Detection from Safran (see IBO 5/15/16). As a condition for the clearance, the EC accepted Smith’s offer to divest Morpho’s explosive trace detection business. The EC requires the divestment due to the limited number of suppliers; specifically, the EC cited concerns about lack of competition, price increases and a decrease in innovation. Smiths stated that the proposed divestment completes Phase I of the EU merger review process. The EC must approve the buyer, and Smiths must successful complete the sale. The divestment does not include Morpho’s hold baggage or cabin baggage explosive detection systems.

Morpho’s explosive detection systems business consists of ion trap mobility spectrometry–based portable system for chemical agent detection. Smiths offers a broader line of explosives detection system, which also include ion mobility spectrometry­–based systems.