Tag: Merger

German cement producer HeidelbergCement AG and Italian producer Italcementi S.p.A. agreed to divest a cement plant in Martinsburg, WV and up to 11 cement distribution terminals in six other states to settle charges that their proposed $4.2 billion merger would likely harm competition in five regional markets for cement in the United States. Heidelberg and Italcementi are the second and fourth largest producers of cement in the world, and in the United States, the two companies compete through their respective U.S. subsidiaries, Lehigh Hanson and Essroc Cement Corp., to sell portland cement – an essential ingredient in making concrete. According to the FTC complaint, the merger as proposed would harm competition for portland cement in five metropolitan areas: Baltimore-Washington, DC; Richmond, Virginia; Virginia Beach-Norfolk-Newport News, Virginia; Syracuse, New York; and Indianapolis, Indiana. In each of these markets, the FTC alleges the merger as originally proposed would have reduced the number of competitively significant suppliers from three to two. The proposed consent agreement requires the merged company to divest to an FTC-approved buyer an Essroc cement plant and quarry in Martinsburg, West Virginia; seven Essroc terminals in Maryland, Virginia and Pennsylvania; and a Lehigh terminal in Solvay, New York. At the buyer’s option, the order also requires the merged company to divest two additional Essroc terminals in Ohio. Under the proposed order, these divestitures must occur within 120 days after the merger is complete. In addition, the merged company has ten days after the merger is complete to divest Essroc’s terminal in Indianapolis to Cemex, Inc.

The Commission issued an administrative complaint alleging that the combination of Penn State Hershey Medical Center and PinnacleHealth System would substantially reduce competition for general acute care inpatient hospital services in the area surrounding Harrisburg, Pennsylvania, and lead to reduced quality and higher health care costs for the area’s employers and residents.  The Commission also authorized staff to file a preliminary injunction to maintain the status quo pending the outcome of its administrative proceeding.

The FTC issued an administrative complaint and authorized staff to file a preliminary injunction to block Penn State Hershey Medical Center's proposed merger with PinnacleHealth System. The complaint alleged that combining the two health care providers would substantially reduce competition for general acute care inpatient hospital services sold to commercial health plans iin four south-central Pennsylvania counties, leading to reduced quality and higher prices for employers and residents. 

ON Semiconductor Corporation agreed to sell its Ignition IGBT business in order to settle charges that its proposed $2.4 billion acquisition of Fairchild Semiconductor International, Inc. would likely substantially lessen competition in the worldwide market for Ignition IGBTs, resulting in higher prices and reduced innovation. Ignition IGBTs are semiconductors that function as solid-state electronic switches in the ignition systems of automotive internal combustion engines.  The order preserves competition by requiring ON to divest its Ignition IGBT business to Chicago-based manufacturer Littelfuse, Inc. The divestiture includes design files and intellectual property that Littelfuse needs to manufacture ON’s Ignition IGBTs. ON must also facilitate the transfer of its customer relationships to Littelfuse, and supply Ignition IGBTs for Littlefuse to sell to customers while Littelfuse sets up its manufacturing operations.

Teva Pharmaceutical Industries Ltd. agreed to sell the rights and assets related to 79 pharmaceutical products to settle FTC charges that its proposed $40.5 billion acquisition of Allergan plc’s generic pharmaceutical business would be anticompetitive. The remedy requires Teva to divest the drug portfolio to eleven firms, and will preserve competition in U.S. pharmaceutical markets where Teva and Allergan compete now or would likely have competed in the future if not for the merger. The divested products include anesthetics, antibiotics, weight loss drugs, oral contraceptives, and treatments for a wide variety of diseases and conditions, including ADHD, allergies, arthritis, cancers, diabetes, high blood pressure, high cholesterol, mental illnesses, opioid dependence, pain, Parkinson’s disease, and respiratory, skin and sleep disorders. The acquirers of the divested products are Mayne Pharma Group Ltd., Impax Laboratories, Inc., Dr. Reddy’s Laboratories Ltd., Sagent Pharmaceuticals, Inc., Cipla Limited, Zydus Worldwide DMCC, Mikah Pharma LLC, Perrigo Pharma International D.A.C., Aurobindo Pharma USA, Inc., Prasco LLC and 3M Company.  In addition to the product divestitures, to address the anticompetitive effects likely to arise in markets for 15 pharmaceutical products where Teva supplies active pharmaceutical ingredients to current or future Allergan competitors, the FTC order additionally requires Teva to offer these existing API customers the option of entering into long-term API supply contracts.

Mylan Inc. agreed to divest the rights and assets related to two generic pharmaceutical products in order to settle FTC charges that its proposed $7.2 billion acquisition of Swedish drug maker Meda would be anticompetitive. The FTC order preserves competition in the markets for 250 mg generic carisoprodol tablets, which treat muscle spasms and stiffness, and for 400 mg and 600 mg generic felbamate tablets, which treat refractory epilepsy. Under the proposed order, the U.S.-based generic pharmaceutical company Alvogen Pharma US, Inc. will acquire all of Mylan’s rights and assets related to 400 mg and 600 mg felbamate tablets. The proposed order also requires Mylan to provide transitional services and take all actions that are necessary for Alvogen to obtain FDA approval to manufacture and market 400 mg and 600 mg generic felbamate tablets. According to the FTC’s complaint, Meda and one other company currently market 250 mg generic carisoprodol tablets, and Mylan, which owns the U.S. marketing rights to a recently approved carisoprodol product, is the next likely entrant. Without a remedy, the acquisition would eliminate Mylan’s entry as a third independent competitor, delaying beneficial competition and future price decreases. Under the proposed order, Mylan must relinquish its U.S. marketing rights for the drug. With the settlement, Indicus Pharma LLC, which owns the product, manufactures it, and markets it internationally, will compete independently in the U.S. market.

Energy companies Energy Transfer Equity, L.P. (“ETE”), and The Williams Companies, Inc., agreed to divest Williams’ interest in an interstate natural gas pipeline to proceed with ETE’s proposed acquisition of Williams. According to the complaint, the proposed merger, if consummated, would have reduced competition in the market for “firm” – i.e., guaranteed – pipeline capacity to deliver natural gas to points within the Florida peninsula. In Florida, natural gas is extensively used for electric power generation, making competitive access to constant and reliable sources of supply critical. The complaint alleges that absent a remedy, the acquisition would eliminate the competition between FGT and Gulfstream, which historically has enabled Florida customers to obtain lower transportation rates and better terms of service. It also would have resulted in a pipeline monopoly at many natural gas delivery points within the peninsula.  The complaint also alleges that the proposed merger likely would harm future competition from a new interstate pipeline, Sabal Trail Transmission LLC, which is scheduled to start transporting natural gas to parts of the Florida peninsula in May 2017. According to the complaint, Sabal Trail and its future customers will rely on leased access to a segment of the Transco Pipeline, a Williams-owned, large interstate pipeline, for natural gas supply. The complaint alleges that the newly merged company would have an incentive to deny Sabal Trail additional capacity expansions on Transco because ETE’s FGT pipeline is a closer competitor to Sabal Trail than was Williams’ Gulfstream pipeline.