Legal Library: Cases and Proceedings

Two separate consent orders settle antitrust concerns stemming from acquisitions by the Loewen Group of certain funeral homes and cemeteries that substantially reduced competition in Brownsville and Harlingen/San Benito, Texas, and in Castlewood, Virgina.  The orders require Loewen to divest properties in the three local markets to restore competition.

Cadence agreed to settle charges that its acquisition of Cooper & Chyan Technology, Inc. would reduce competition for "routing" software used to automate the design of integrated circuits or microchips. According to the complaint, the merger would reduce Cadence's incentives to permit competing suppliers of routing tools to obtain access to its layout environments resulting in less innovation, higher prices, and reduced services. To ensure that independent software developers of commercial routing tools continue to compete with Cooper & Chyan's technology, the consent order requires Cadence to allow the developers to participate in Cadence's software interface programs.

The Commission issued a consent agreement settling charges that the acquisition of OrNda Healthcorp by Tenet Healthcare Corp. would substantially lessen competition for general acute care services in the San Luis Obispo, California area. According to the FTC, Tenet and OrNda were the second and third largest chains of general acute care hospitals in the country, and the two leading providers of acute care hospital services in San Luis Obispo County.  The consent order permits the acquisition but requires divestiture of Tenet's French Hospital Medical Center and related OrNda assets in San Luis Obispo County.

Final consent order preserves competition in the sale of commemorative class rings to graduating high school and college students. The order requires restructuring of the purchase agreement to exclude Gold Lance, Inc. from the proposed plans to acquire Class Rings, Inc. The new acquisition plan is limited to the class ring business of Town & Country Corporation and CJC Holdings, Inc.

Consent order settles charges that the acquisition of Metal Leve S.A. would result in Mahle becoming a monopolist in the research, development, manufacture and sale of articulated pistons used in heavy duty diesel engines and requires divestiture of Metal Leve's U.S. piston business within 10 days of the final consent order.

Consent order settles charges that the proposed acquisition of Solvay, S.A.'s animal health business would reduce competition in the market for the research, development, manufacture and sale of canine lyme vaccine, canine corona virus vaccine, and feline leukemia vaccine. The order requires divestiture of Solvay's U.S. and Canadian rights to the three types of vaccines to the Schering-Plough Corporation or another Commission-approved buyer.

Consent order preserves competition in ready-to-eat cereals. The order permits the acquisition of Ralcorp Holdings, Inc.'s branded ready-to-eat cereal and snack mix business but requires the transfer of licenses to manufacture and sell cereals identical to the Chex brand products without the approval of General Mills.

The final consent order settles charges that American Cyanamid entered into written agreements with its retail dealers to offer substantial rebates to dealers who sold the company's agricultural chemical products at or above specified minimum resale prices. The order prohibits American Cyanamid from conditioning the payment of rebates or other promotionals on the resale prices its dealers charge for its products.

Final consent order settles antitrust concerns in three markets affected by the proposed acquisition of Sandoz Ltd.: research and development in gene therapy products that are being targeted for life-threatening conditions such as hemophilia and cancer; corn herbicides; and flea control products. In the gene therapy market, the order requires the licensing of certain intellectual properties to Rhone-Poulenc Rorer and other firms to permit continued competition in research, development and commercialization for a broad range future medical treatments. In addition, in one of the largest divestitures eve1 required under a consent order, Sandoz agreed to divest its U.S. and Canadian corn herbicide business to BASF Aktiengesellschaft within 10 days. The consent order also requires the divestiture of Sandoz's flea control business to Central Garden and Pet Supply of Lafayette, California within 30 days.

Consent order permits Boeing's acquisition of Rockwell International Corporation's Aerospace and Defense business subject to a divestiture and other conditions. There are two teams competing to develop high-altitude endurance unmanned air vehicles for the Department of Defense's Advance Research Projects Agency -- Boeing/Lockheed (developing Tier III Minus, a stealthy, high-altitude endurance unmanned air vehicle) and Rockwell/Teledyne (developing Tier II Plus, a non-stealthy, high-altitude endurance unmanned air vehicle). As a result of the acquisition, Boeing would become a member of both teams and could increase the price of the components it supplies or reduce its investment in technology and quality. The consent order allows Teledyne, if it chooses, to replace Rockwell as its wing supplier without incurring any significant costs or risks to the project. Terms of the consent order require Boeing to deliver the assets necessary to produce the Tier 11Plus wings to businesses designated by Teledyne. The order also establishes a "firewall" between Boeing's Tier III Minus business and the Rockwell North American Aircraft Division that provides Tier II Plus wings.

Consent order preserves competition in the production and sale of certain refractory products and hot surface igniters. The order permits the acquisition of The Carborundum Company but requires divestiture of Carborundum's Monofrax fused cast refractories business in New York, its hot surface igniter business in Puerto Rico, and its silicon carbide refractories business in New Jersey to Commission approved acquirers.

Separate final consent orders settle charges that the acquisitions of Eckerd Corporation and 190 Rite Aid stores in North and South Carolina would give J.C. Penney a dominant position in four metropolitan areas and increase its ability to raise prices for the sale of pharmacy services to third party payers. The orders require the divestitures of 34 Thrifty drug stores and 127 Rite Aid drug stores.

Final order preserves competition in the production and sale of opaque contact lenses. The order permits the acquisition of Pilkington Barnes Hind International, Inc. but requires the divestiture of the opaque contact lens business within four months to a Commission approved acquirer.

Consent order settles charges that the acquisition of gas gathering assets from ANR Pipeline Company would reduce competition for natural gas gathering services in five Oklahoma counties. The order permits the acquisition but requires the divestiture of 160 miles of pipeline system in the Anadarko Basin within 30 days to a Commission-approved buyer.