Following a public comment period, the Federal Trade Commission has approved a final order settling charges that without a remedy, pipeline and storage company Buckeye Partners, L.P.’s $435 million acquisition of competitor Magellan Midstream Partners, L.P. would harm competition for terminaling services – both for all light petroleum products, and for gasoline specifically – in North Augusta, South Carolina; Spartanburg, South Carolina; and Montgomery, Alabama.
First announced in June 2022, the complaint alleged that light petroleum products terminals are a critical link in the supply chain for distribution of gasoline, diesel, and jet fuel. According to the complaint, in all three geographic markets, the acquisition would eliminate the close competition between Buckeye and Magellan, increase the likelihood of collusive or coordinated interaction between the remaining competitors, reduce the number of terminaling options for third-party customers, and increase prices for terminaling services.
Under the terms of the final settlement, Buckeye is required to divest assets to divestiture buyer U.S. Venture, Inc. (U.S. Venture) no later than 10 days after the acquisition is consummated. The divested terminals include two light petroleum product terminals and associated assets in the North Augusta, South Carolina market, two terminals in the Spartanburg, South Carolina market, and one terminal in the Montgomery, Alabama market. Buckeye must also seek prior approval from the Commission for a period of 10 years before it acquires any light petroleum products terminal (including the divested terminals) within a 60-mile radius of the divested assets. According to the order, divestiture buyer U.S. Venture must obtain prior approval from the Commission for three years before transferring any of the divested assets to any buyer, and for seven additional years to any buyer with an interest in any light petroleum products terminal in any of the three relevant geographic markets.
The Commission vote to approve the final order was 5-0.