European Commission approves Cisco's acquisition of NDS in Phase I

The European Commission has cleared the acquisition of NDS, a supplier of software technology to the pay-TV sector, by Cisco Systems. The Commission concluded that the two companies’ portfolios of pay-TV technical services products are largely complementary, since Cisco’s activities are concentrated in the supply of hardware products, such as set-top-boxes (STBs), while NDS specialises in the provision of software components such as conditional access systems (CAS), digital rights management (DRM) software, and middleware. A CRA team led by Bob Stillman and Hristina Dantcheva assisted the parties in addressing a number of vertical and conglomerate concerns raised by the Commission. The concerns, which were related to the incentives and ability of the post-merger entity to raise the costs for its competitors in STBs or pay-TV software or to exclude competitors through bundled offers of the different components of pay-TV technical services, were dismissed by the Commission as unwarranted. The transaction was cleared at Phase I without conditions by the EC.