Current contents of the Federal Cartel Office

Merger notification in the crash test dummy industry withdrawn due to competition concerns raised by the Bundeskartellamt

23.07.2024

Ansys Inc., Canonburg, USA, has withdrawn its notification of the acquisition of a just under 35 per cent minority shareholding in Safe Parent Inc., Farmington Hills, USA, (known under the “Humanetics” brand) after the Bundeskartellamt informed the parties about its competition concerns relating to the acquisition. Ansys’s portfolio includes simulation software for crashes with occupant protection, while Humanetics is a provider of physical and virtual crash test dummies.

Andreas Mundt, President of the Bundeskartellamt: Both companies offer products that are essential for crash simulations, and have a dominant position in their respective fields. We have thoroughly examined to what extent the parties compete with each other, to what extent their products complement each other and to what extent the concentration would affect how the merger parties compete with third parties. Our key finding is that even acquiring a minority shareholding would significantly lessen competition and further strengthen the parties’ market dominance. With the notification now withdrawn, merger control has prevented such adverse effects in this highly important and promising industry.

The project was closely examined in second-phase merger control proceedings, which involved extensive investigations. In particular, the Bundeskartellamt surveyed relevant customers and competitors and assessed the two companies’ merger-related internal communication.

Ansys focuses on the provision of engineering simulation software, such as the software “LS-DYNA”, which is used in particular for simulating crashes with occupant protection in the automotive industry. Humanetics is the only company worldwide offering both physical and virtual dummies and has a very strong market position in both areas. The investigations have shown that a merger would have further strengthened Ansys’s dominant position in the market for crash simulation software with occupant protection and Humanetics’s dominant position in the market for physical and virtual crash test dummies (so-called FE ATD models). Both companies offer various categories of virtual crash test dummies so that the merger would in any event have impeded potential competition in this area. Based on economic analyses and internal strategy documents, it was to be expected that the concentration would have given the parties the incentive to impede their competitors in the markets for crash simulation software with occupant protection and virtual dummies through tying and other joint foreclosure strategies.

As the notification was withdrawn, the proceeding was concluded without a formal decision by the Bundeskartellamt. The merger therefore cannot be implemented.

Further information on the proceeding will be available in a case summary on our website.

Background

Global demand for products for physical and virtual crash tests with occupant protection is driven primarily by automobile manufacturers and suppliers.

Customers from the automotive industry usually simulate different types of crashes (for example frontal, side or rear impacts) to the greatest possible extent before conducting real crash tests. Such simulations can significantly reduce the number of physical crash tests required, saving the automotive industry development time and costs. As the results of simulated crashes should come as close as possible to those of real crashes, the crash simulations require virtual vehicle and dummy models that are as accurate as possible.

At a later stage of developing a vehicle, physical dummies are used to measure and analyse a human body’s actual response to physical forces (for example, impacts, accelerations, deflections or moments of inertia) using sensors. Dummies vary according to industry (automotive, aviation, military), type of impact (frontal, side, rear) and anatomy (men, women and children of different sizes and physiques). Sensors and transducers located within the dummy measure the precise physical forces exerted on each body part in a crash event.