Parties Abandoned Proposed Transaction After Commission Challenge
In light of the parties’ abandonment of their proposed transaction, the Federal Trade Commission today announced its approval and issuance of an order dismissing the agency’s 2007 administrative complaint challenging Equitable Resources, Inc.’s (Equitable) proposed acquisition of The Peoples Natural Gas Company (Dominion Peoples), a subsidiary of Dominion Resources, Inc.
In March 2007, the Commission issued an administrative complaint challenging the proposed $970 million deal on the grounds that it was anticompetitive, and in April 2007 filed a complaint and motions for a temporary restraining order and preliminary injunction in federal district court against the companies. After the district court dismissed the complaint, the Commission appealed and obtained an injunction blocking the deal pending appeal. On January 15, 2008, following 10 months of litigation and with the injunction still in place, Equitable and Dominion abandoned the proposed transaction. The FTC order announced today formally ends the Commission’s administrative litigation in this matter.
“From the start of this case, we maintained that the Equitable/Dominion transaction was bad for consumers and should be stopped,” said Jeffrey Schmidt, Director of the FTC’s Bureau of Competition. “Consumers are the ultimate winners now that the deal has been abandoned and competition has been preserved.”
On March 14, 2007, the Commission issued an administrative complaint challenging Equitable’s proposed acquisition of Dominion Peoples, a subsidiary of Dominion Resources, Inc. The FTC alleged that Equitable and Dominion Peoples were each other’s sole competitors in the distribution of natural gas to nonresidential customers in certain areas of Allegheny County, Pennsylvania, which includes Pittsburgh. The complaint charged that the proposed transaction would result in a monopoly for many customers that have benefitted from competition between the two companies.
On April 13, 2007, the agency filed a complaint and motions seeking a temporary restraining order and preliminary injunction to block the deal in the U.S. District Court for the Western District of Pennsylvania under Section 13(b) of the FTC Act. The goal was to prevent the consummation of the merger, thereby preserving competition pending the resolution of an administrative trial on the merits. On May 14, 2007, the district court granted the companies’ motion to dismiss the complaint on state action grounds. On May 16, 2007, the Commission filed an emergency motion for an injunction pending appeal in the district court, which the court denied on May 21.
On May 18, 2007, the agency filed a notice of appeal of the district court judgment, and on May 21 also filed an emergency motion for an injunction pending appeal with the U.S. Court of Appeal for the Third Circuit. The Court of Appeals issued an order granting the Commission’s injunction motion on June 1, 2007, and that order remains in effect. The companies subsequently announced on January 15 of this year that they were terminating the proposed transaction.
The Commission vote approving the order dismissing the administrative complaint was 5-0. The order was issued on January 31, 2008 and a public version was posted on the FTC’s Web site today.
Copies of the order dismissing the complaint 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, DC 20580. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to email@example.com, or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts.
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