European Commission opens probe into IBM-Telelogic deal

Mumbai: The European Commission has opened an in-depth investigation into IBM''s bid to buy Swedish software provider Telelogic AB, warning the deal could give the US-based company too much power in some parts of the European software development market.

If the deal went ahead, "IBM would become by far the largest vendor of software development tools for software modeling and for requirements management," EU competition commissioner Neelie Kroes said.

She said the EU prove would "thoroughly analyse the effects" of the purchase worth €557.5 million ($789.7 million), "to ensure that it would not harm competition."

An initial EU investigation into the deal found that IBM and Telelogic were direct competitors and leading vendors worldwide in software modeling and in development tools, adding that a link-up between the two "could have adverse effects on competition" and slowdown innovation and interoperability with tools from other vendors.

The EU has set a February 20 deadline by which to reject or approve the deal.