A US encryption systems company has abandoned its attempt to buy a UK company in the same field, after the Competition Commission was brought in to investigate the deal.
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The UK Office of Fair Trading (OFT) referred the buying of nCipher by SafeNet to the Competition Commission and, as a result, SafeNet pulled out.
NCipher said of the SafeNet decision, “Given the OFT’s comments regarding the competitive position of the two companies, and the time, cost and potential disruption to business that could ensue from such a referral, the board of nCipher accepts and agrees with SafeNet’s decision.”
NCipher and SafeNet are among the largest suppliers of hardware security modules (HSMs) in the UK. These HSMs are used to encrypt and decrypt data on company systems, and the OFT was concerned that such an acquisition would harm price competition in the UK market.