Tag: Merger

The Commission challenged the proposed acquisition by Carlyle Partners IV, L.P. of INEOS Group Ltd., alleging that the deal would be anticompetitive in the highly concentrated Midwestern market for sodium silicate. Sodium silicates are used in detergents and other products, and are important chemicals used by the pulp and paper industry. The acquisition would have joined market leader PQ Corporation, which is owned by Carlyle, with INEOS, the third-largest sodium silicate provider. Under the Commission’s order, Carlyle must divest PQ’s sodium silicate plant in Utica, Illinois, and all associated intellectual property required to operate the plant to Oak Hill Company within five days of consummating the transaction.

The Commission challenged McCormick & Company’s $605 million acquisition of Lawry’s and Adolph’s brands of seasoned salt products from Unilever N.V., alleging that the transaction would be detrimental to competition in the highly concentrated U.S. market for seasoned salts. According to the Commission’s complaint, the proposed deal would combine the two companies that comprise almost the entire $100 million market for seasoned salt, increasing the likelihood that McCormick would be able unilaterally to increase prices. McCormick agreed to divest its Season-All business to Morton, an FTC approved buyer, within 10 days of completing the acquisition.

The Commission challenged Flow International Corporation’s proposed $109 million acquisition of rival waterjet manufacturer OMAX Corporation. Both corporations develop, manufacture, and sell computerized waterjet cutting systems which use pressurized water mixed with abrasive garnet particles to cut various materials, including steel and stone. The proposed acquisition would have united the two largest competitors in the market for the manufacture and sale of computerized waterjet cutting systems and allowed Flow to exercise market power and increase prices. Furthermore, the Commission charged that entry would be very unlikely because OMAX received two broad patents relating to the control systems for waterjet cutting systems. The Commission approved a consent agreement requiring OMAX to grant any request for a royalty-free license for its controller patents.

The Commission challenged a series of acquisitions by TALX Corporation, a fully owned subsidiary of Equifax, Inc., that lessened competition in the markets for outsourced unemployment compensation management (UCM) and verification of income and employment (VOIE) services. Unemployment compensation management services consist of the administration of unemployment compensation claims filed with a state or territory. Verification of income and employment services consists of providing income and employment information on behalf of employers to third parties, such as lenders or other creditors. According to the Commission’s complaint, TALX’s series of acquisitions from 2002 to 2005 substantially reduced competition in the nationwide provision of VOIE services and in the provision of outsourced UCM services, and enhanced TALX’s ability to unilaterally increase prices and decrease the quality of its services. Under the Commission consent order designed to restore competition, TALX agreed to allow certain customers terminate their agreements and give notice to the FTC before acquiring, or entering a management contract with, a UCM or VOIE service provider.

The Commission authorized both an administrative complaint and a motion for a preliminary injunction to challenge the proposed merger of Inova Health System Foundation’s and Prince William Health System (PWHS), alleging that the acquisition would violate federal antitrust laws by reducing competition for general acute care inpatient hospital services in Northern Virginia. On June 17, 2008 the Commission approved an order dismissing its administrative complaint, as the respondents publicly announced their mutual decision to terminate the proposed acquisition agreement.

The consent order settled charges that Service Corporation International’s (SCI) proposed acquisition of Alderwoods Group Inc. would likely lessen competition in 47 markets for funeral or cemetery services, leaving consumers with fewer choices and the prospect of higher prices or reduced levels of service. Under the settlement, SCI must sell funeral homes in 29 markets and cemeteries in 12 markets across the United States. In six other markets, SCI must sell certain funeral homes that it plans to acquire or end its licensing agreements with third-party funeral homes affiliated with SCI.

On February 10, 2004 the Commission issued an administrative complaint alleging that following Evanston Northwestern Healthcare Corporation's acquisition of Highland Park Hospital prices charged to health insurers for medical services increased and, therefore, higher costs for health insurance were passed on to consumers of hospital services in the Cook and Lake counties of Illinois. The complaint also alleged that a physicians group affiliated with both hospitals, Highland Park Independent Physician Group, negotiated prices for physicians on staff at Evanston as well as for several hundred independent physicians not affiliated with either hospital. According to the complaint, these actions constitute illegal price fixing among competing physicians or physician groups and deny consumers the benefits of competition in physician services. In an initial Decision, the Administrative law judge found that the acquisition resulted in higher prices and substantially lessened competition for acute care inpatient services in parts of Chicago’s northwestern suburbs.  The ALJ entered an order that would require the divestiture of the acquired hospital.   On appeal, the Commission ruled that the acquisition was anticompetitive, but concluded that in this “highly unusual case,” divestiture, the remedy imposed by the administrative law judge, would be too costly and potentially risky and instead imposed a conduct remedy. The Commission’s order requires Evanston to set up two separate and independent contract negotiation teams to bargain with managed care organizations to revive competition between Evanston’s two hospitals and the Highland Park hospital.

The Commission charged that Schering-Plough’s proposed $14.4 billion acquisition of Organon Biosciences N.V. threatened to substantially reduce competition in the U.S. market for three popular vaccines used to treat poultry, a staple in American food markets. The November 2007 order settling the charges required the sale of assets required to develop, manufacture, and market these vaccines to Wyeth. In addition, Schering-Plough was required to sign a supply and transition services agreement with Wyeth, under which Schering will provide the vaccines for a period of two years, allowing time for the necessary FDA approvals.

The Commission charged that Schering-Plough’s proposed $14.4 billion acquisition of Organon Biosciences N.V. threatened to substantially reduce competition in the U.S. market for three popular vaccines used to treat poultry, a staple in American food markets. The November 2007 order settling the charges required the sale of assets required to develop, manufacture, and market these vaccines to Wyeth. In addition, Schering-Plough was required to sign a supply and transition services agreement with Wyeth, under which Schering will provide the vaccines for a period of two years, allowing time for the necessary FDA approvals.

The Commission intervened in the proposed $1.3 billion acquisition of Pathmark Stores by Great Atlantic & Pacific Tea (A&P), alleging the transaction would have reduced competition among grocery stores in the highly concentrated markets of Staten Island and Shirley, Long Island, New York. A&P operates stores under the A&P, A&P Super Foodmart, Food Basics, Food Emporium, Super Fresh, and Waldbaum’s banners. The Commission’s consent order required A&P to divest five supermarkets in Staten Island, and one supermarket in Shirley.

The Commission challenged Kyphon Inc.’s $220 million proposed acquisition of the spinal assets of Disc-O-Tech Medical Technologies, Ltd. and Discotech Orthopedic Technologies (collectively Disc-O-Tech) as anticompetitive in the market for minimally invasive vertebral compression fracture treatment products in the U.S. Disc-O-Tech’s Confidence products promised real benefits to patients in treating these painful fractures in a minimally invasive way, and threatened Kyphon’s near-monopoly on treatment options. The Commission’s consent order required that Kyphon divest all assets, intellectual property and development rights related to the Confidence brand to an FTC-approved buyer