Service Corporation International (SCI), the largest owner of funeral homes and cemeteries in the world, has agreed to settle Federal Trade Commission charges that its proposed acquisition of Equity Corporation International (ECI), the fourth largest funeral home and cemetery company in the United States, would substantially lessen competition among funeral home or cemetery establishments in 14 local markets. The acquisition would combine SCI's approximately 3,200 funeral homes and 400 cemeteries in 41 states, Canada, Australia and Great Britain, with ECI's 354 funeral homes and cemeteries in 33 states. Under the proposed consent agreement, SCI would be permitted to acquire ECI, but would be required to divest sufficient funeral service and cemetery properties to Carriage Services, Inc. (Carriage), in each of the 14 local markets, to remedy the anticompetitive effects of the acquisition.
SCI is headquartered in Houston, Texas; ECI is headquartered in Lufkin, Texas; and Carriage is headquartered in Houston, Texas.
The FTC's complaint alleges that the proposed acquisition would eliminate substantial existing competition between SCI and ECI and lead to higher prices or reduced services to consumers. According to the complaint, the acquisition would raise significant competitive concerns in connection with funeral services in the following geographic markets: Phenix City, Alabama/Columbus, Georgia; Evansville, Indiana; Jacksonville Beach, Florida; Roseville, California; Ruskin/Sun City, Florida; West Pasco County and Tarpon Springs, Florida. The complaint alleges that the total annual sales for funeral services in these six geographic markets are approximately $36.6 million. In the eight cemetery service markets -- Broward County (Fort Lauderdale), Florida; Chattanooga, Tennessee, and its north Georgia suburbs; Citrus County, Florida; Corpus Christi, Texas; Eugene/Springfield, Oregon; North Richmond, Virginia, and the northern, eastern, and western suburbs of Richmond; the South Bay area of San Diego, California; and Summit County (Akron), Ohio -- the total annual cemetery sales are approximately $47.3 million.
Under the proposed consent agreement, SCI would be permitted to acquire ECI, but must divest the following funeral homes and cemeteries:
In addition, the proposed settlement would require SCI to complete the required divestitures to Carriage within seven days after the order becomes final. In the event SCI does not divest the assets to a Commission-approved acquirer within the required time period, a trustee will be appointed. Also, for 10 years, for each of the 14 local funeral service or cemetery markets, SCI would be required to give prior notice to the FTC, as well as to the office of the attorney general in which any funeral or cemetery properties are located, before acquiring any funeral home or cemetery.
The Commission vote to accept the proposed consent agreement for public comment was 4-0. An announcement regarding the proposed consent agreement will be published in the Federal Register shortly. The agreement will be subject to public comment for 60 days, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
Copies of the proposed agreement, complaint, and an analysis of the agreement to assist the public in commenting, are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. Consent agreements subject to public comment also are available by calling 202-326-3627. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC File No. 981 0353)