Tag: Merger

Discount retailers Dollar Tree, Inc. and Family Dollar Stores, Inc. agreed to sell 330 Family Dollar stores to a private equity firm, Sycamore Partners, to settle FTC charges that Dollar Tree’s proposed $9.2 billion acquisition of Family Dollar would likely be anticompetitive. Their stores compete head-to-head in terms of price, product assortment, and quality, as well as location and customer service in local markets nationwide. The FTC identified 330 stores in local markets from 35 states where competition would be lost if the acquisition went forward as proposed. Without a remedy, according to the FTC, the acquisition is likely to lessen competition by eliminating direct competition between Dollar Tree and Family Dollar, and increasing the likelihood that Dollar Tree will unilaterally exercise market power.

Supermarket operators Albertsons and Safeway Inc. agreed to sell 168 supermarkets to settle FTC charges that their proposed $9.2 billion merger would likely be anticompetitive in 130 local markets in Arizona, California, Montana, Nevada, Oregon, Texas, Washington, and Wyoming. Under the settlement, Haggen Holdings, LLC will acquire 146 Albertsons and Safeway stores located in Arizona, California, Nevada, Oregon, and Washington; Supervalu Inc. will acquire two Albertsons stores in Washington; Associated Wholesale Grocers, Inc. will acquire 12 Albertsons and Safeway stores in Texas; and Associated Food Stores Inc. will acquire eight Albertsons and Safeway stores in Montana and Wyoming. It is expected that Associated Wholesale Grocers, Inc. will assign its operating rights in the 12 Texas stores it is acquiring to RLS Supermarkets, LLC (doing business as Minyard Food Stores) and that Associated Food Stores Inc. will assign its rights in the eight Montana and Wyoming stores it is acquiring to Missoula Fresh Market LLC, Ridley’s Family Markets, Inc., and Stokes Inc.

DaVita, Inc. agreed to divest its ownership interest in seven dialysis clinics – five in suburban and urban areas of New Jersey and two on the outskirts of Dallas, Texas – to proceed with its $358 million acquisition of competitor Renal Ventures Management, LLC. DaVita is the second-largest  provider of outpatient dialysis services in the United States and Renal Ventures is the seventh-largest. DaVita will divest the seven clinics to PDA-GMF Holdco, LLC, a joint venture between Physicians Dialysis and GMF Capital LLC. Physicians Dialysis has been in business since 1990 and currently operates several outpatient dialysis clinics. According to the FTC's complaint, the acquisition would lead to significant anticompetitive effects in the New Jersey markets of Brick, Clifton, Somerville, Succasunna, and Trenton, and in the Dallas-area markets of Denton and Frisco. Currently, DaVita and Renal Ventures clinics compete directly with each other in these markets, and the merger would represent either a merger to monopoly or a reduction of competitors from three to two. Without that competition, the likely result would be reduced quality and higher prices for dialysis patients. Under the terms of the proposed settlement, DaVita, Inc. must obtain agreements from the medical director of each divested clinic to continue providing physician services after it transfers ownership to PDA-GMF Holdco; obtain consent from the relevant landlords to transfer leases for the facilities to the buyer; and provide the buyer an opportunity to interview and hire employees from the divested clinics. Also under the proposed settlement, DaVita is barred from contracting with the medical directors of the seven clinics for three years, and it must provide transition services for up to 24 months.

Enbridge Inc. and Spectra Energy Corp agreed to settle FTC charges that their proposed merger likely would harm competition in the market for pipeline transportation of natural gas in three production areas off the coast of Louisiana. According to the FTC’s complaint, the merger likely would reduce natural gas pipeline competition in three offshore natural gas producing areas in the Gulf of Mexico—Green Canyon, Walker Ridge and Keathley Canyon—leading to higher prices for natural gas pipeline transportation from those areas. In portions of the affected areas, the FTC alleged, the merging parties’ pipelines are the two pipelines located closest to certain wells and, as a result, are likely the lowest cost pipeline transportation options for those wells. According to the FTC, the merger would give Canada-based Enbridge an ownership interest in both pipelines, which will give it access to competitively sensitive information of the Discovery Pipeline, as well as significant voting rights over the Discovery Pipeline. Access to its competitor’s competitively sensitive information and significant voting rights would provide Enbridge with the incentive and opportunity to unilaterally increase pipeline transportation costs for natural gas producers located in the affected areas. The exchange of information also may increase the likelihood of tacit or explicit anticompetitive coordination between the Walker Ridge Pipeline and the Discovery Pipeline. Under the settlement with the FTC, the companies have agreed to conditions that will preserve competition in those areas.The consent agreement requires Enbridge to establish firewalls to limit its access to non-public information about the Discovery Pipeline. Board members of the Spectra-affiliated companies that hold a 40 percent share in the Discovery Pipeline must recuse themselves from any vote involving the pipeline, with two limited exceptions. Also under the order, Enbridge must notify the Commission before acquiring an ownership interest in any natural gas pipeline operating in the Green Canyon, Walker Ridge and Keathley Canyon areas, or increasing the 40 percent ownership interest of Spectra affiliate DCP Midstream Partners, LP in the Discovery Pipeline.

The FTC issued an administrative complaint alleging that the proposed merger of Advocate Health Care Network and NorthShore University HealthSystem will create the largest hospital system in the North Shore area of Chicago.  According to the complaint, the combined entity would operate a majority of the hospitals in the area and control more than 50 percent of the general acute care inpatient hospital services. The Commission also authorized staff to file for a preliminary injunction to maintain the status quo pending the administrative trial.

In the federal court proceeding, the district court denied the motion for a preliminary injunction on June 20, 2016, but granted plaintiffs' motion for a stay pending appeal.  On October 31, 2016, the Seventh Circuit reversed, and remanded the case back to the district court for further proceedings. On March 7, 2017, the district court granted an injunction, and the parties abandoned their merger plans.  On March 20, 2017, the Commission dismissed the administrative complaint.

The FTC issued an administrative complaint alleging that the proposed merger of Advocate Health Care Network and NorthShore University HealthSystem will create the largest hospital system in the North Shore area of Chicago.  According to the complaint, the combined entity would operate a majority of the hospitals in the area and control more than 50 percent of the general acute care inpatient hospital services. The Commission also authorized staff to file for a preliminary injunction to maintain the status quo pending the administrative trial.

In the federal court proceeding, the district court denied the motion for a preliminary injunction on June 20, 2016, but granted plaintiffs' motion for a stay pending appeal.  On October 31, 2016, the Seventh Circuit reversed, and remanded the case back to the district court for further proceedings. On March 7, 2017, the district court granted an injunction, and the parties abandoned their merger plans.  On March 20, 2017, the Commission dismissed the administrative complaint.

Boehringer Ingelheim agreed to divest five types of animal health products in the United States in order to settle FTC charges that its proposed asset swap with Sanofi would likely be anticompetitive. Under the proposed swap, Boehringer Ingelheim acquired Sanofi’s animal care subsidiary, Merial, valued at $13.53 billion, and Sanofi obtained Boehringer Ingelheim’s consumer health care business unit, valued at $7.98 billion, as well as cash compensation of $5.54 billion. The FTC’s complaint alleges that without the divestitures the proposed asset swap would harm competition in the U.S. markets for various vaccines for companion animals (pets) and certain parasite control products for cattle and sheep. The proposed consent order preserves competition by requiring Boehringer Ingelheim to divest the companion animal vaccines to Eli Lilly and the company’s Elanco Animal Health division, and the parasite control products to Bayer AG.

Valeant Pharmaceuticals, the parent of Bausch + Lomb, agreed to sell Paragon Holdings I, Inc. to settle charges that its May 2015 acquisition of Paragon reduced competition for the sale of FDA-approved buttons used for three types of gas permeable, or GP, lenses: orthokeratology lenses, worn to reshape the cornea; large-diameter scleral lenses, which cover the white of the eye and are used after eye surgery, for corneal transplants, and to treat eye disease; and general vision correction lenses. Valeant will sell Paragon in its entirety to a newly created entity, Paragon Companies LLC, headed by the former president of Paragon, Joe Sicari. Under the settlement, Paragon Companies also will acquire the assets of Pelican Products LLC – a contact lens packaging company that Valeant acquired after its purchase of Paragon – that is the only producer of FDA-approved vials used for shipping some GP lenses.