On April 2, 2013, the Federal Trade Commission (“FTC”) and Charlotte Pipe and Foundry, (“Charlotte Pipe”), a leading producer and seller of cast iron soil pipes (“CISP”) used for sewage and drainage in the United States, entered into a settlement agreement to resolve the FTC’s concerns related to Charlotte Pipe’s acquisition of its competitor, Star Pipe Products, Inc. (“Star Pipe”) in 2010.
FTC and Idaho State AG Challenge Acquisition of Idaho's Largest Independent Physician Practice Group
On March 12, 2013, the FTC and the Idaho Attorney General jointly filed a complaint in federal district court seeking to block St. Luke’s Health System, Ltd.'s acquisition of Saltzer Medical Group P.A., Idaho's largest independent, multi-specialty physician practice group. The transaction was consummated on December 31, 2012.
On November 26, 2012, the Federal Trade Commission (“FTC”) announced that it will allow Robert Bosch GmbH (“Bosch”) to acquire SPX Service Solutions, U.S. LLC (“SPX”) after Bosch entered into a settlement agreement that resolves the FTC’s allegations that Bosch’s acquisition of SPX, as originally proposed, would have been anticompetitive. In addition, Bosch and the FTC entered into a settlement agreement resolving anticompetitive conduct that occurred prior to the announcement of the acquisition.
On November 15, 2012, the FTC approved Hertz Global Holdings, Inc.’s (“Hertz”) acquisition to acquire Dollar Thrifty Automotive Group inc. (“Dollar Thrifty”). The transaction was cleared after Hertz agreed to sell its Advantage Rent A Car (“Advantage”) business including 43 on-airport locations as well as 29 Dollar Thrifty on-airport locations to remedy alleged competitive harm at 72 on-airport locations.
On October 5, 2012, the FTC announced that it entered into a consent agreement requiring the divestiture of an acute inpatient psychiatric hospital in the El Paso, Texas/Santa Teresa, New Mexico area to resolve antitrust concerns arising from Universal Health Services, Inc.’s (“UNH”) proposed acquisition of Ascend Health Corporation (“Ascend”).
On September 25, 2012, the Federal Trade Commission (“FTC”) announced that Biglari Holdings, Inc., which owns Steak ‘n Shake and Western Sizzlin restaurant chains, agreed to pay $850,000 in civil penalties to resolve allegations that it failed to make a premerger notification filing in connection with its acquisition of 8.7% of the outstanding voting securities of Cracker Barrel Old Country Store, Inc. http://www.ftc.gov/opa/2012/09/biglari.shtm
FTC Challenges Consummated Transactions and Restores Competition in Cardiology Market in Reno, Nevada
On August 6, 2012, the FTC settled a case against Renown Health, the largest provider of acute medical care in northern Nevada, related to allegations that Renown Health reduced competition in the adult cardiology market in Reno, Nevada through two allegedly anticompetitive acquisitions and the use of anticompetitive non-compete clauses.
On July 31, 2012, the Federal Trade Commission (Commission) issued a statement withdrawing the Commission’s nine-year-old Policy Statement on Monetary Equitable Remedies in Competition Cases (Policy Statement). The statement’s withdrawal was approved on a 4-1 split vote, with Commissioner Maureen K. Ohlhausen casting the lone no vote and issuing a dissenting opinion.
On July 16th, the Third Circuit Court of Appeals ruled that pharmaceutical “pay-for-delay” settlements whereby cash is paid from a patent holding company to a generic manufacturer that agrees not to enter a market as prima facie evidence of an antitrust violation. The Third Circuit rejects the more lenient standard adopted by the other Circuit Courts. With the circuit courts split on the issue, the issue is now ripe for Supreme Court review.
On April 2, 2012, the Federal Trade Commission (“FTC”) closed its investigation of Express Scripts, Inc.’s ("Express Scripts") proposed acquisition of pharmacy benefits manager ("PBM"), Medco Health Solutions, Inc. ("Medco") Express Scripts consummated its acquisition of Medco on the same day.
On January 20, 2012, the Federal Trade Commission (“Commission”) issued a statement by Chairman Leibowitz, Commissioner Ramirez, and Commissioner Brill stating the Commission’s intention not to seek review by the U.S. Supreme Court of the Eighth Circuit Court of Appeal’s decision in FTC v. Lundbeck, Inc. This statement was accompanied by a separate statement by Commissioner Rosch.
In an initial decision issued on January 5, 2012, FTC Chief Administrative Law Judge D. Michael Chappell ordered ProMedica Health System Inc to divest recently-acquired St. Luke’s Hospital to an FTC-approved buyer within 180 days after the order becomes final. See http://www.ftc.gov/os/adjpro/d9346/120105promedicadecision.pdf
In June 2009, the Federal Trade Commission (“FTC” or “the Commission”) authorized the staff to conduct an investigation to determine whether Church & Dwight was using exclusionary practices such as conditioning discounts or rebates to retailers on the percentage of shelf or display space dedicated to Trojan brand condoms and “other products” sold and distributed by Church & Dwight.
On November 21, 2011, the Federal Trade Commission (“FTC”) settled allegations of violations of Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45 (“FTC Act”) against Pool Corporation (“PoolCorp”). PoolCorp and the FTC reached a proposed consent agreement resolving charges that PoolCorp used exclusionary acts and practices to maintain its monopoly power in the pool product distribution market in violation of Section 5.
On June 6, 2011, the US District Court for the District of Columbia denied defendant H&R Block’s motion to transfer venue. The district court ruled that H&R Block failed to meet their burden to show that a transfer of this case to the Western District of Missouri is warranted in the interests of justice.
The Affordable Care Act of 2010 encourages health care providers to form integrated organizations to jointly offer services in order to reduce costs and improve the quality of health care in the United States. Section 3022 of the Act provides for the formation of Accountable Care Organizations (“ACOs”) to serve fee-for-service Medicare beneficiaries through Medicare’s Shared Savings Program (“SSP”). ACOs must sign up with the Department of Health and Human Services’ Centers for Medicare and Medicaid Services (“CMS”) to participate in the program for at least three years.
On June 1, 2011, the Federal Trade Commission (“FTC”) entered into a consent agreement with Grifols, S.A. (“Grifols”), a Spain based manufacturer of plasma-derived drugs requiring Grifols to make significant divestitures as part of a settlement allowing Grifols to acquire a leading plasma-derived drug manufacturer, Talecris Biotherapeutics Holdings Corp. The antitrust review took approximately a year as the deal was announced on June 6, 2010. The transaction was worth approximately $3.4 billion. The settlement resolves FTC charges that Grifols’ proposed acquisition of Talecris would be anticompetitive and would violate federal antitrust laws.
On February 22, 2011, Judge Andrew J. Guilford of the U.S. District Court for the Central District of California denied the Federal Trade Commission’s (“FTC”) motion for a preliminary injunction and also dissolved the temporary restraining order that had been in place since mid-December. The district court ruled that the FTC had not shown that it was likely to succeed on the merits of its case.
On February 24, 2011, the Federal Trade Commission put into effect the revised thresholds for the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, which requires premerger notification for certain large transactions. Federal law requires that the Federal Trade Commission and Department of Justice be notified of mergers, acquisitions, and other transactions of a certain size prior to consummation pursuant to the Hart-Scott-Rodino Antitrust Improvements Act (HSR.)
On December 1, 2010, in a 4-1 vote, the Federal Trade Commission (“FTC”) authorized the filing of an administrative complaint, alleging that Laboratory Corporation of America’s (“LabCorp”) consummated acquisition of Westcliff Medical Laboratories (“Westcliff”) would harm competition in Southern California. In his dissenting statement, Commissioner J. Thomas Rosch criticized the definition of the relevant product market in the complaint but he noted that he agreed that Commission action was warranted.
On October 28, 2010, the Federal Trade Commission (“FTC”) and the State of Minnesota, Plaintiffs to the FTC v. Lundbeck, Inc. and Minnesota v. Lundbeck, Inc. filed a Joint Notice of Appeal at the United States Court of Appeals for the Eighth Circuit, from the August 31, 2010 judgment denying an injunction against Lundbeck's 2006 acquisition of Neoprofen, which allegedly competed with Lundbeck's Indocin for the treatment of a congenital heart defect in premature infants.
The Federal Trade Commission (“FTC”) lost its challenge to Ovation Pharmaceutical Inc.’s (“Ovation Pharmaceutical” now Lundbeck Inc.) acquisition of the pediatric heart drugs Indocin and NeoProfen. While the FTC claimed that the combination was a merger to monopoly resulting in anticompetitive price increases, the Federal District Court in Minnesota decided that Lundbeck (formerly “Ovation Pharmaceutical”) did not violate federal or state antitrust laws when it combined Indocin IV and NeoProfen, the only two FDA-approved drugs for treatment of patent ductus arteriosus (“PDA”). The primary reason for Judge Joan N. Erikson’s decision was that she did not believe that the FTC established that the drugs were in the same product market. FTC v. Lundbeck, Inc., No. 08-6379 and Minnesota v. Lundbeck, Inc., No. 08-6381 (D. Minn. August 31, 2010).
On September 27, the FTC approved Coca-Cola Company’s $12.3 billion acquisition of the North American operations of Coca-Cola Enterprises Inc., its largest North American bottler. When the agreement was announced, Coca-Cola already owned about 34 percent of Coca-Cola Enterprises. To resolve antitrust concerns raised by the acquisition, Coca-Cola agreed to restrict its access to confidential competitive business information of rival Dr Pepper Snapple Group, which also distributes Dr Pepper Snapple carbonated soft drinks.
The Federal Trade Commission ("FTC") continues its emphasis on investigating and challenging small consummated transactions that were not initially reviewed. Corporate executives that enter into deals that raise competitive concerns must be aware that deals that appear to be done may not be. This is the case, even if the deal is not reportable under the Hart-Scott-Rodino rules.
On April 29, 2010, a panel of three judges at the Second Circuit Court of Appeals gave hope to the opponents of pay-for-delay settlements, when the Court’s decision invited plaintiffs-appellants of Arkansas Carpenters Health and Welfare Fund v. Bayer AG to petition for an en banc rehearing of the case. On September 7, 2010, however, the Court denied Appellants’ petition without providing any reasoning.
On August 19, 2010, the FTC and the DOJ issued the 2010 Horizontal Merger Guidelines, which are available on the FTC’s website at http://www.ftc.gov/os/2010/08/100819hmg.pdf. The five-step analytical process outlined in the 1992 Horizontal Merger Guidelines—market definition, competitive effects, entry, efficiencies, and failing firm defense—has been replaced with a more flexible approach to competitive effects analysis. That being said, each individual element still continues to play a role in the revised merger review process.
On June 14, 2010, Federal Trade Commission Chairman, Jon Leibowitz, gave a speech to the American Medical Association in Chicago amid ongoing tension between the two groups with respect to antitrust regulation in the medical industry. In an effort to address the AMA’s concerns, and to bolster a more productive relationship between the organizations, Leibowitz offered an explanation of the FTC’s position on antitrust in the medical arena as well as some promising options for the future of healthcare regulation.
On December 23, 2009, Agrium Inc. agreed to sell a range of assets as part of an agreement with the FTC that will allow Agrium to move forward with its acquisition of competitor CF Industries Holdings, Inc. The proposed consent order settles allegations that the acquisition would have eliminated competition in the market for anhydrous ammonia fertilizer, a product that farmers rely on to grow their crops.
On December 2, 2009, the FTC announced an order settling charges that Watson Pharmaceuticals, Inc.’s acquisition of Robin Hood Holdings Limited, owner of Arrow Pharmaceuticals, would have harmed consumers by eliminating future competition for important generic drugs used to treat Parkinson’s disease (cabergoline) and the side effects of chemotherapy (dronabinol).
On November 2, 2009, the Federal Trade Commission (“FTC”) released an opinion stating that the Realcomp II (“Realcomp”), a real estate multiple listing service (“MLS”) serving southeast Michigan, took part in anticompetitive practices by restricting some of its members access to its database.
On September 25, 2009, the FTC settled with K+S Aktiengesellschaft (“K+S”) regarding its $1.68 billion proposed acquisition of Morton International, Inc. (“Morton”).
The proposed merger would have combined K+S’s subsidiary, International Salt Company LLC (“ISCO”) with Morton. According to the FTC, the combined company would have enjoyed a 70% market share of the bulk de-icing salt market in Maine and Connecticut. There is no practical substitute for de-icing salt and it is unlikely that other salt providers would enter the markets. The transaction could have substantially increased the prices of de-icing salt.
On September 22, the Department of Justice ("DOJ") and the Federal Trade Commission ("FTC") announced that they will solicit public comment and hold joint public workshops to explore the possibility of updating the Horizontal Merger Guidelines that are used by both agencies to evaluate the potential competitive effects of mergers and acquisitions.
On September 4, the FTC filed comments in response to the Federal Communications Commission ("FCC") Notice of Inquiry regarding development of a National Broadband Plan that will seek to ensure that every American has access to broadband capability. In its comments, the FTC states that the FCC should take into consideration the FTC’s two primary missions – promoting competition and protecting consumers in the marketplace.
On July 24, 2009, the Federal Trade Commission issued an administrative complaint challenging Carilion Clinic’s August 2008 acquisition of two outpatient clinics in the Roanoke, Virginia, area. Prior to the acquisition, the Center for Advanced Imaging ("CAI") and the Center for Surgical Excellence ("CSE") had strong reputations for offering high-quality care and convenient services at prices much lower than Carilion’s.
On July 6, 2009, the Federal Trade Commission (“FTC”) modified a 2004 consent order against Aspen Technology, Inc. (“Aspen Tech”).
On May 31, 2002, Aspen Tech consummated a $106.1 million acquisition of Hyprotech, Ltd., its closest competitor in developing and supplying certain specialized engineering
process simulation software products, according to the FTC. In August 2003, the FTC challenged the acquisition stating that the transaction would violate antitrust statutes and lessen competition in several U.S. software markets. In July 2004, Aspen Tech, through an FTC consent order, was required to divest software assets to Honeywell International, Inc. (“Honeywell”).
On June 4, 2009, Alta Bates Medical Group, Inc. ("Alta Bates"), a 600-physician independent practice association serving the Berkeley and Oakland, California, area, agreed to settle Federal Trade Commission charges that it violated the antitrust laws by fixing prices charged to health care insurers. The proposed consent order agreed to by the doctor group and the FTC prohibits Alta Bates from collectively negotiating fee-for-service reimbursements and engaging in related anticompetitive conduct.
On May 27, the Federal Trade Commission filed an administrative complaint o block CSL Limited’s proposed $3.1 billion acquisition of Talecris Biotherapeutics Holdings Corporation. The administrative complaint alleges that the deal would be illegal and would substantially reduce competition in the U.S. markets for four plasma-derivative protein therapies – Immune globulin (Ig), Albumin, Rho-D, and Alpha-1. These therapies are used to treat patients suffering from illnesses such as primary immunodeficiency diseases, chronic inflammatory demyelinating polyneuropathy, alpha-1 antitrypsin disease, and hemolytic disease of the newborn.
On May 3,2004, the Department of Justice's ("DOJ") Antitrust Division, at the request of the Federal Trade Commission ("FTC"), filed two civil suits against alleged violators of pre-merger notification filing requirements under the Hart-Scott-Rodino ("HSR") Act of 1976. The HSR Act imposes notification and waiting period requirements on individuals and companies over a certain size before they can consummate acquisitions of stock or assets valued at more than $50 million. The purpose of the HSR Act is to provide federal antitrust enforcement agencies an opportunity to investigate proposed transactions and determine whether the transactions would violate the antitrust laws. If the reviewing agency determines that a transaction violates the antitrust laws, it may seek to block that transaction before the waiting period expires. Therefore, the antitrust agencies take HSR violations very seriously, even ones where no competition overlaps exist. Indeed, a party is subject to a maximum civil penalty of $11,000 a day for each day it is in violation of the HSR Act.
On April 2, 2009, the Federal Trade Commission (“FTC”) required BASF, a world leading chemical company based in Germany, to divest assets related to two high performance pigments of Ciba Holding Inc (“Ciba”) in order for BASF’s proposed $5.1 billion acquisition of Ciba to proceed after the statutory public comment period of 30 days. It issued a consent order that would significantly reduce remedy the anticompetitive impact of the proposed transaction in the bismuth vanadate and indanthrone blue (two high-performance pigments) markets.
On April 1, 2009, the Federal Trade Commission (“FTC”) announced that Acting Director of the Bureau of Competition, David P. Wales would step down in May. Mr. Wales joined the FTC as Deputy Director of the Bureau of Competition in April 2006 and took on his current role in August 2008. He has led the FTC’s Bureau of Competition in bringing more than 20 enforcement actions. Wales directed several litigated enforcement efforts that blocked proposed mergers in CCS/Newpark Environmental Services, Oldcastle/Pavestone, and CCC/Mitchell.
BRISTOL-MYERS TO PAY $2.1 MILLION FOR FAILURE TO DISCLOSE AGREEMENT TO DELAY GENERIC ENTRY OF PLAVIX
On March 26, 2009, Bristol-Myers Squibb Company ("BMS") agreed to pay a fine of $2.1 million for failing to inform the Federal Trade Commission of oral agreements reached with Apotex, Inc., regarding potential generic competition to its drug Plavix. BMS’s conduct violated a 2003 FTC Order and the Medicare Modernization Act, which requires that certain patent lawsuit settlment agreements be accurately reported to both the Commission and the U.S. Department of Justice ("DOJ"). The complaint alleges that BMS failed to disclose that, as part of a patent settlement in which Apotex agreed not to launch its generic version of Plavix for several years, BMS also orally said that it would not compete with Apotex during the first 180 days after Apotex entered with its new generic drug.
On March 6, 2009, the Federal Trade Commission (“FTC”) ordered Whole Foods Market, Inc. (“Whole Foods”) to divest 32 Wild Oats Markets, Inc. (“Wild Oats”) stores and related assets, which will restore competition in 17 markets.
Whole Foods is the largest premium natural and organic supermarket chain in the United States and Wild Oats is its closest competitor.
On March 4, 2009, the National Association of Music Merchants (“NAMM”) agreed to a Federal Trade Commission (“FTC”) consent order settling charges of NAMM’s conduct that enhanced members’ ability to increase prices of musical instruments.
NAMM is a trade association of U.S. manufacturers, distributors, and dealers of musical instruments. As a trade association, its purpose is to facilitate promotion of consumer demand for musical instruments by lobbying the government, offering seminars, promoting music education, and organizing trade shows.
On February 26, 2009, the Federal Trade Commission (“FTC”) intervened in Lubrizol Corporation’s (“Lubrizol”) 2007 acquisition of oxidate assets from its rival The Lockhart Company (“Lockhart”).
On February 7, 2007, Lubrizol signed an asset purchase agreement with Lockhart to purchase Lockhart’s oxidate assets. Oxidate assets are chemical additives that are used to make rust preventives. This asset purchase agreement violated the FTC Act and the Clayton Act by significantly lessening competition in the oxidates market
On January 29, 2009, Getinge AB (“Getinge”) settled charges with the Federal Trade Commission (“FTC”) in order for its $865 million acquisition of rival Datascope Corporation (“Datascope”) to proceed. The FTC believed that the proposed acquisition violated federal antitrust laws. Datascope is required to divest its endoscopic vessel harvesting (“EVH”) product line to an FTC approved buyer within 10 days of the acquisition date.
On January 23, 2009, Dow Chemical Company (“Dow”) settled charges with the Federal Trade Commission (“FTC”) in order for its $18.8 million acquisition of rival Rohm & Haas Company (“R&H”) to proceed. Dow agreed to sell a range of assets to an FTC approved buyer and put in place mechanisms to ensure Dow will not have access to competitively sensitive non-public information regarding any businesses the new buyer acquires from Rohm & Haas.
On January 14, 2009, the Federal Trade Commission (“FTC”) filed a suit to block the proposed $540 million assets and interest acquisition of Pavestone Co. (“Pavestone”) by rival Oldcastle Architectural, Inc. (“Oldcastle”) because it would reduce competition in the manufacture and sale of drycast concrete hardscapes.
On December 29, 2008, the Federal Trade Commission (“FTC”) required a divestiture to resolve antitrust concerns with King Pharmaceuticals, Inc.’s (“King”) $1.6 billion acquisition of Alpharma, Inc. (“Alpharma”). To remedy the situation, the FTC is requiring King to divest Alpharma’s brand Kadian, an oral long-acting opioid (“LAO”) analgesic drug, to Actavis, one of the world’s largest generic drug companies, no later than 10 days of King’s acquisition of Alpharma. According to the FTC, King’s own brand of an oral LAO drug, Avinza, is a close substitute to Kadian for many customers.
MARIAN R. BRUNO NAMED DEPUTY DIRECTOR OF FTC’S BUREAU OF COMPETITION; NORMAN ARMSTRONG, JR. NAMED ACTING DEPUTY DIRECTOR
On September 2, 2008, Marian R. Bruno, the Associate Director of Management and Operations in the Federal Trade Comission’s (“FTC”) Bureau of Competition (“Bureau”), was named the Deputy Director of the Bureau of Competition. Norman Armstrong, Deputy Assistant Director of the Bureau’s Mergers IV Division, has been named Acting Deputy Director. They join Kenneth Glazer, the Senior Deputy Director of the Bureau.
On August 13, 2008, the Federal Trade Commission (“FTC”) ordered Sun Pharmaceutical Industry Ltd (“Sun”) to sell all rights and assets of three distinct generic formulations of the anticonvulsant drug carbamazepine to Torrent Pharmaceutical Ltd, a generic drug company based in India, for its acquisition of Taro Pharmaceutical Industries Ltd. (“Taro”) to proceed.
On August 7, 2008, William E. Kovacic, the Federal Trade Commission Chairman, announced that Jeffery Schmidt, the Director of the Bureau of Competition for the past two and half years, will be leaving the FTC. Mr. Kovacic has named David P. Wales, the deputy director of the Bureau of Competition, as the Acting Director.
On July 30, 2008, the Federal Trade Commission (“FTC”) entered into a settlement agreement that allows McCormick & Company Inc.’s (“McCormick”) proposed $605 million acquisition of Lawry’s and Adolph's brands of seasoned salt products from Unilever N.V. (“Unilever”) to proceed. According to the FTC’s complaint, McCormick’s Season-All brand competes with Lawry’s brands in the manufacture and sale of branded seasoned salt products in the United States. The complaint indicates that these companies have strong brand followings and that even a five to ten percent increase in prices would not cause consumers to switch brands. As a result of the proposed transaction, the FTC believes that McCormick will control 80% of the market for branded seasoned salts and the company would have the ability to unilaterally increase prices on either brand to the detriment of consumers.
On July 17, 2008, the Federal Trade Commission (“FTC”) issued a complaint challenging the proposed $9 billion acquisition of V&S Vin & Sprit (“V&S”), a wholly owned corporation of the Kingdom of Sweden, by Pernod Ricard (“Pernod”), a wholly owned subsidiary of France-based Pernod. The FTC contends that the transaction is anticompetitive and violates U.S. antitrust laws.
On July 14, 2008, the Federal Trade Commission (“FTC”) announced the launch of a new online resource, the FTC Guide to the Antitrust Laws. This resource, written in layman’s terms summarizes the core laws that ban unfair business practices and prevent mergers that harm consumers, and explains how antitrust cases are brought by U.S., State, and international authorities, as well as private parties. Antitrust rules are categorized into four sections: Dealings with Competitors, Dealings in the Supply Chain, Single Farm Conduct, and Mergers.
On June 30, 2008, the Federal Trade Commission (“FTC”), in a 4-0 vote, issued a complaint against the proposed acquisition of INEOS Group Limited (“INEOS”) by Carlyle Partners IV (“Carlyle”). INEOS is the third largest sodium silicate producer and seller in the highly concentrated Midwest region of the United States. PQ Corporation (“PQ”), owned by Carlyle Partners IV, is the largest sodium silicate producer. According to the FTC, the proposed transaction is anticompetitive and in violation of antitrust laws. In the complaint, the FTC contends that PQ has 50 percent of the sodium silicate market while INEOS has 12 percent. Because there is not a close substitute of sodium silicate, which has high transportation costs, other products will not constrain pricing.
On May 6, 2008 the Federal Trade Commission (“FTC”) modified its previous order in 2000 prohibiting Nine West Group, Inc. from fixing retail prices with dealers. The FTC modified the order by granting Nine West permission to engage in resale price maintenance (RPM) with a caveat that the company would have to provide periodic reports detailing the effects of these agreements on competition in the industry.
On May 5, 2008, in 4-0 vote, the Federal Trade Commission (“FTC”) entered into a settlement agreement that allowed Agrium, Inc. to buy UAP Holding Corporation (“UAP”) for $2.5 billion, making UAP a wholly owned subsidiary of Agrium.
Agrium is required to sell five UAP farm stores in Michigan and two Agrium stores in Maryland and Virginia within 180 days of the acquisition. The order requires the divestiture of Agrium’s store in Keller, VA, and that it is sold as a unit with Agrium’s Pocomoke/Girdletree, Maryland store, because the store in Virginia supplies the store in the Maryland region. The order also contains an Order to Hold Separate and Maintain Assets that requires the companies to maintain the assets to be divested pending their sale and provides for the appointment of an interim monitor to oversee the assets to be sold in the relevant markets.
FTC SETTLES WITH TALX CORP REGARDING ITS ACQUISITIONS OF UNEMPLOYMENT COMPENSATION MANAGEMENT AND EMPLOYMENT VERIFICATION SERVICE PROVIDERS
On April 28, 2008, the Federal Trade Commission (“FTC”) entered into a settlement agreement with TALX Corporation regarding its acquisitions of various unemployment compensation management (“UCM”) and verification of income and employment (“VOIE”) services. UCM consists of administering, on behalf of large, multi-state employers, unemployment compensation claims filed with a state or territory. VOIE consists of providing income and employment information on behalf of employers to third parties, such as lending institutions.
On March 5, 2008, the Federal Trade Commission challenged the conduct by two Connecticut chiropractic associations and one of their attorneys to implement a collective refusal to deal with a cost-saving health plan in Connecticut. The FTC’s complaint charged that the parties’ actions unreasonably restrained competition in violation of Section 5 of the FTC Act. In settling the FTC’s charges through consent agreement, the parties will refrain from engaging in such anticompetitive conduct in the future. A consent agreement does not constitute an admission of a law violation but does carry the force of law for future actions.
On January 26, 2008 Hexion Specialty Chemicals announced that both it and Huntsman Corporation agreed to allow additional time for the Federal Trade Commission to review the proposed merger of the two companies. As a result, the merger is not expected to close before May 3. To accommodate the extension, Hexion also gave notice to Huntsman that on April 5, it plans to exercise its option and extend the Termination Date under the Merger Agreement for 90 days, and thus, if the conditions to Hexion's extension right are met on April 5, the termination date under the Merger Agreement will be extended until July 4, 2008.
On January 24, 2008 the Federal Trade Commission (“FTC”) or (“Commission”) announced a complaint and settlement with Negotiated Data Solutions LLC (N-Data), which allegedly violated federal law by engaging in unfair methods of competition and unfair acts or practices regarding its enforcement of certain patents against makers of equipment employing Ethernet, a computer networking standard used in nearly every computer sold in the United States.
On December 20, 2007 the Federal Trade Commission announced that it will not seek to block Google Inc.’s proposed $3.1 billion acquisition of Internet advertising server DoubleClick Inc. In a 4-1 vote to close its eight-month investigation of the transaction, the Commission wrote in its majority statement that “after carefully reviewing the evidence, we have concluded that Google’s proposed acquisition of DoubleClick is unlikely to substantially lessen competition.”
On November 16, 2007, the Federal Trade Commission entered into a settlement regarding Schering-Plough Corporation’s proposed $14.4 billion acquisition of Organon BioSciences N.V. from Akzo-Nobel N.V. The FTC alleges that the deal harms competition in the U.S. markets for the manufacture and development of three poultry vaccines. In settling the charges, the companies entered into a consent order with the Commission that required the merging parties to divest the rights and assets needed to develop each vaccine to Wyeth within 10 days of the acquisition and to provide supply and transitional support services to Wyeth’s Fort Dodge division for two years.
On October 26, 2007 the Federal Trade Commission (“FTC”) entered into a settlement agreement with Owens Corning regarding its proposed acquisition of the glass fiber reinforcements and composite fabric assets of Compagnie de Saint Gobain (Saint Gobain). The complaint accompanying the consent agreement asserts that the deal reduces competition in the North American market for continuous filament mat (“CFM”) products. Under the terms of the consent order that would resolve the Commission’s charges and allow the deal to proceed, Owens Corning must divest its North American CFM to AGY Holding Company within 10 days of completing its acquisition of the Saint Gobain assets.
FTC ADVISES ROCHESTER PHYSICIAN ORGINIZATION IT WILL NOT RECOMMEND ANTITRUST CHALLENGE TO PROPOSAL FOR "CLINICAL INTEGRATION" PROGRAM
On September 21, 2007, Federal Trade Commission advised the Greater Rochester Independent Practice Association, Inc. (GRIPA), that it had no present intention to challenge the organization’s planned conversion to a non-exclusive physician network joint venture. GRIPA requested a staff advisory opinion regarding its proposal to combine and coordinate the provision of medical services to patients.
On August 9, 2007, the Federal Trade Commission announced a complaint challenging Jarden Corporation’s (Jarden) proposed $1.2 billion acquisition of sporting equipment manufacturer K2 Incorporated (K2). FTC alleges that the deal would be anticompetitive and detrimental to consumers of monofilament fishing line. Monofilament fishing line is the most widely-used and least expensive type of fishing line, and while other specialized types of fishing line, including braided and fluorocarbon, appear to be growing in popularity, the vast majority of fishing line purchases in the United States are of monofilament line. Under the terms of a consent order resolving the FTC’s charges and allowing the transaction to proceed, the companies will sell the assets of four popular types of monofilament line, all of which are owned by K2: Cajun Line, Omniflex, Outcast, and Supreme.
Commission Rules that Evanston Northwestern Healthcare Corp.’s Acquisition of Highland Park Hospital Was Anticompetitive but doesn’t order divestiture
On August 7, 2007, the Federal Trade Commission overruled its in-house judge’s previous decision to break up a seven year old hospital merger, allowing it to stay intact even though the deal caused prices to increase.
Evanston Northwestern Healthcare Corporation (ENH) acquired Highland Park Hospital in January 2000, and as a result, combined ENH’s Evanston and Glenbrook hospitals in Cook County Illinois. With Highland Park Hospital being the nearest hospital to the north, the Commission approved and issued a complaint in February 2004. The complaint alleged that subsequent to the acquisition, ENH was able to raise its prices charged to health insurers far above price increases of other comparable hospitals as a result of the transaction.
FTC Approves Final Consent Order in Matter of DirectRevenue LLC, et al.; FTC Approves Final Consent Order in Matter of Sony BMG Music Entertainment
On June 29, the FTC approved a final consent order in the matter concerning DirectRevenue, LLC, et al. with a vote of 4-1, with Commissioner Jon Leibowitz voting no and issuing a dissenting statement.
The FTC also approved a final consent order in the matter of Sony BMG Music Entertainment, with a vote of 5-0.
FTC Issues Administrative Complaint Seeking to Block Whole Foods Market’s Acquisition of Wild Oats Markets
On June 28, the FTC issued a complaint challenging Whole Foods Market Inc.’s approximately $670 million acquisition of Wild Oats Markets Inc. under the grounds that this transaction would violate federal antitrust laws by eliminating the substantial competition between these two uniquely close competitors in the operation of premium natural and organic supermarkets nationwide. The FTC contends that if the transaction goes forward Whole Foods would have the ability to raise prices and reduce quality and services.
On June 7, 2007, the judge issued a temporary restraining order under which the parties may not consummate the deal until after a preliminary injunction hearing, which is scheduled for July 31 and August 1, 2007.
The FTC’s vote to issue the complaint was 5-0.
On June 6, following the NorVergence Inc. telecommunications fraud case won by the FTC in 2005, the agency charged a company with violating federal law by helping to finance the scheme and continuing to seek payment from defrauded consumers.
In 2004, a federal court voided 1,600 NorVergence contracts with small businesses and religious and other nonprofit organizations that were misled by promised savings on phone and Internet services. The contracts purported to be long-term rental agreements for a relatively inexpensive device that NorVergence falsely claimed would create the savings. NorVergence was forced into bankruptcy, and the promised services stopped. The judgment the FTC obtained against NorVergence left unaffected thousands of rental agreements NorVergence had already sold to finance companies.
On June 5, the FTC authorized the staff to seek a temporary restraining order and preliminary injunction in federal district court to halt Whole Foods Market, Inc.’s approximately $670 million acquisition of its chief rival, Wild Oats Markets, Inc., pending an administrative trial on the merits. According to the complaint, the transaction would violate federal antitrust laws by eliminating the substantial competition between these two uniquely close competitors in numerous markets nationwide in the operation of premium natural and organic supermarkets. If the transaction continues unopposed, the FTC contends that Whole Foods is likely to raise prices and reduce quality and services unilaterally.
FTC Challenges Rite Aid’s Proposed $3.5 Billion Acquisition of Brooks and Eckerd Pharmacies from Canada’s Jean Coutu Group, Inc.
On June 4, the FTC entered into a settlement to resolve its concerns relating to Rite Aid Corporation’s proposed $3.5 billion acquisition of the Brooks and Eckerd pharmacies from Canada’s Jean Coutu Group (PJC), Inc. Rite Aid and Jean Coutu were required to sell 23 pharmacies to FTC-approved buyers in order to remedy the alleged anticompetitive impact of the proposed transaction. The stores will be sold to: 1) Kinney Drugs; 2) Medicine Shoppe International, Inc.; 3) Walgreen Co.; 4) Big Y; and 5) Weis Markets.
FTC Chairman Deborah Platt Majoras Participated in Sixth Annual International Competition Network Conference in Moscow, Russia
On May 24, FTC Chairman Deborah Platt Majoras participated in the sixth annual International Competition Network (“ICN”) Conference in Moscow, Russia, from May 30-June 1, 2007. Senior government antitrust officials, private sector antitrust experts from around the world, and representatives from intergovernmental organizations met to discuss competition issues.
On May 23, Bureau of Economics Director Michael A. Salinger described the FTC’s initiatives to protect competitive markets in the production, distribution, and sale of gasoline through the agency’s comprehensive merger program on behalf of the FTC before the U.S. Congress’ Joint Economic Committee.
Although the FTC does not regulate energy market sectors, the agency plays a key role in maintaining competition and protecting consumers in energy markets. The FTC has been very involved regarding mergers in the oil industry that could harm competition. It examines any merger and any course of conduct in the industry that has the potential to decrease competition and thus harm consumers of gasoline and other petroleum products.
On May 22, Commissioner William E. Kovacic detailed the FTC’s varied initiatives to protect competitive markets in the production, distribution, and sale of gasoline and other petroleum products before the U.S. House of Representatives Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce.
The petroleum industry plays a crucial role in our economy. Indeed, few issues are more important to American consumers and businesses than the decisions being made about current and future energy production and use. Not only do changes in gasoline prices affect consumers directly, but the price and availability of gasoline also influence many other economic sectors. This is why this industry is so carefully scrutinized, more than others, by the FTC.
On May 2, FTC Commissioner Jon Leibowitz testified on behalf of the FTC before the U.S. House Subcommittee on Commerce, Trade, and Consumer Protection of the Committee on Energy and Commerce regarding anticompetitive patent settlements in the U.S. pharmaceutical industry. Leibowitz alleged that recent court cases have made it more difficult to bring antitrust cases to stop exclusion payment settlements between brand manufacturers and their generic competitors.
On April 16, the FTC requested Actavis Group’s (“Actavis”) and Abrika Pharmaceuticals, Inc. (“Abrika”) divest all rights and assets needed to make and market generic isradipine capsules to Cobalt Laboratories, Inc. (“Cobalt”) within 10 days of the proposed acquisition. The FTC challenged the terms of the acquisition alleging that the transaction would create a monopoly in the U.S. market for generic isradipine capsules, a drug typically prescribed to patients to lower their blood pressure and also is used to treat hypertension, ischemia, and depression.
FTC Files Complaint in Federal District Court Seeking to Block Equitable Resources’ Acquisition of The Peoples Natural Gas Company from Dominion Resources
On April 13, the FTC filed for a temporary restraining order and preliminary injunction in the U.S. District Court of Western Pennsylvania, to stop Equitable Resources, Inc.’s (“Equitable”) proposed acquisition of The Peoples Natural Gas Company (“Dominion Peoples”), a subsidiary of Dominion Resources, Inc. The FTC alleged that the acquisition would lead to higher prices for the local distribution of natural gas to nonresidential customers in some areas of western Pennsylvania.
New Mexico Court Temporarily Blocks Western Refining’s Acquisition of Rival Energy Company Giant Industries, Inc.
On April 13, the U.S. District Court for the District of New Mexico issued a temporary restraining order (“TRO”) to prevent Western Refining, Inc. from closing on its proposed $1.4 billion acquisition of Giant Industries, Inc., pending the completion of a preliminary injunction hearing.
On April 10, 2007, the FTC approved a complaint challenging the acquisition and authorized FTC staff to seek a preliminary injunction in federal district court to block the proposed transaction.
The federal district court complaint alleged that the acquisition would lead to reduced competition and higher prices for the bulk supply of light petroleum products, including gasoline, to northern New Mexico, an area of the country where the companies are direct and significant competitors.
On March 30, the FTC approved a petition for proposed divestiture from Thermo Electron Corporation (“Thermo”). Under the consent agreement and order with the FTC regarding Thermo’s proposed acquisition of Fisher Scientific International, Inc., the respondent was required to divest the high-performance centrifugal vacuum evaporators (“CVE”s) assets, to a Commission-approved buyer. In its petition, Thermo requested FTC approval to divest the CVE assets to Riverlake Equity Partners, L.P. and, in part owing to the acquisition of certain indirect ownership interests, to MVC Capital, Inc. By a vote of 5-0, the Commission approved the proposed divestiture.
On March 16, following a public comment period, the FTC approved the issuance of a final consent order in the matter concerning the acquisition of interests in Kinder Morgan, Inc by TC Group LLC (The Carlyle Group) et al. The Commission vote was 3-1, with Commissioner Jon Leibowitz voting no and Commissioner J. Thomas Rosch recused.
On March 15, the FTC approved a complaint challenging Equitable Resources, Inc.’s (“Equitable”) proposed acquisition of The Peoples Natural Gas Company (“Dominion Peoples”), a subsidiary of Dominion Resources, Inc., on the basis that the merger would create a monopoly in the sale of natural gas in Southwestern Pennsylvania. The complaint alleged that Equitable and Dominion Peoples are each other’s sole competitors in the distribution of natural gas to nonresidential customers in certain areas of Allegheny County, Pennsylvania, which includes Pittsburgh. It also alleged that the proposed transaction would result in a monopoly for many customers in the Pittsburgh area resulting in higher prices. The transaction that includes Equitable’s purchase of Hope Gas, Inc., another subsidiary of Dominion, is valued at $970 million. The complaint did not challenge the acquisition of Hope Gas, Inc.
On March 12, the FTC received a petition from Service Corporation International (“SCI”) and Alderwoods Group, Inc. seeking approval of a proposed divestiture related to SCI’s recent acquisition of Alderwoods. In the FTC’s consent agreement and order SCI and Alderwoods were required to divest a range of funeral home and cemetery services companies. Through this petition the companies requested approval to divest Universal Chung Wah Funeral Directors of Alhambra, California (the funeral home to be divested), to New Universal Chung Wah, LLC, and Universal Chung Wah Funeral Directors, Inc. (collectively “Universal”), which are entities owned by employees of the funeral home to be divested. The FTC sought public comments on the proposed divestiture for 30 days, until April 11, 2007, after which it decided to approve it.
On March 9, the FTC approved an application for a proposed divestiture from Linde AG and The BOC Group plc concerning an August 29, 2006, FTC consent order regarding the acquisition of BOC by Linde. Under the terms of the order, the parties were required, among other things, to divest the relevant “Atmospheric Gases Assets” to a single buyer approved by the FTC. Through the application, the parties requested FTC approval to divest these assets to Airgas, Inc., a Delaware corporation. The application was approved with a vote of 5-0.
FTC Receives Supplemental Petition for Approval of Proposed Divestiture from SCI and Alderwoods Group
On March 6, the FTC received a supplemental petition from Service Corporation International (“SCI”) and Alderwoods Group, Inc. seeking approval of a proposed divestiture related to SCI’s recent acquisition of Alderwoods. The FTC’s agreement and order required SCI and Alderwoods to divest a range of funeral home and cemetery services companies in order to guarantee competition and quality of service. Through this petition, the companies requested approval to divest Parnick Jennings Funeral Home & Cremation Services of Cartersville, Georgia, to Pinnacle Funeral Services, LLC. This petition supplements a petition submitted to the Commission earlier this year by substituting Pinnacle for Rollings Funeral Services, Inc. Pinnacle is a collaboration between Vinyard Financing, LLC, and Greg Rollings, who founded and owns Rollings and will serve as president of Pinnacle.
On February 27, the FTC approved a petition from General Dynamics Corporation (“General Dynamics”) to divest its 50% interest in American Ordinance LLC (“AO”). The divestiture was required to maintain competition in the U.S. and Canadian markets for melt-pour load, assemble, and pack (“LAP”) services. Through its petition, General Dynamics requested Commission approval to divest its interest in AO to Day & Zimmerman, Inc. (“DZI”), or one or more direct or indirect wholly owned subsidiaries of DZI. DZI currently owns the other 50 percent interest in AO, which operates the Milan Army Ammunition Plant (“AAP”) in Tennessee and the AAP in Middletown, Iowa. By a vote of 5-0, the Commission approved the proposed divestiture to DZI.
On February 23, the Commission approved an application for divestiture from Dan L. Duncan (“Duncan”); EPCO, Inc. (“EPCO”); Texas Eastern Products Pipeline Company, LLC; and TEPPCO Partners, L.P. (together “TEPPCO”), concerning a 2006 FTC order related to TEPPCO’s interest in the Mont Belvieu Storage Partners, L.P. (“MBSP”). Under the terms of the FTC decision and order, Duncan, EPCO, and TEPPCO were required to divest TEPPCO’s interest in MBSP and sell certain pipelines, land, and other assets owned by TEPPCO in and around Mont Belvieu. MBSP is a partnership between TEPPCO Partners, L.P. and Louis Dreyfus Energy Services, L.P. (“Louis Dreyfus”), and provides salt dome storage for natural gas liquids in Mont Belvieu.
On February 16, the Commission received a petition from Service Corporation International (“SCI”) and Alderwoods Group, Inc. seeking approval of a proposed divestiture related to SCI’s recent acquisition of Alderwoods. The FTC’s consent agreement and order required that SCI and Alderwoods divest a range of funeral home and cemetery service companies. Through this petition, the companies requested approval to divest Yuma Mortuary & Crematory of Yuma, Arizona, to C.E.J. Management, Inc. The FTC accepted public comments on the proposed divestiture for 30 days, until March 19, 2007, after which it decided to approve it.
FTC Receives Application for Approval of Proposed Divestiture from Thermo Electron Corporation; Final Consent Orders Approved in Matters of Advocate Health Partners and General Dynamics/SNC Technologies
On February 9, the FTC received a petition for approval of a proposed divestiture from Thermo Electron Corporation. Under the order, Thermo was required to divest the high-performance centrifugal vacuum evaporators (“CVE”s) assets to a Commission-approved buyer. In the petition, Thermo requested FTC approval to divest the CVE assets to Riverlake Partners, L.P. (Riverlake) and, in part owing to the acquisition of certain indirect ownership interests, to MVC Capital, Inc. (“MVC”). The petition was approved
On January 18, the Commission announced its challenge to Hospira Inc.’s (“Hospira”) proposed $2 billion acquisition of rival drug manufacturer Mayne Pharma Ltd. (“Mayne”), along with an agreement and order requiring the companies to sell assets used to manufacture and supply five generic injectable pharmaceuticals in order for the transaction to proceed. Absent relief, the FTC charged that the deal would violate U.S. competition laws.
FTC Provides Senate Testimony on Anticompetitive Patent Settlements in the U.S. Pharmaceutical Industry
On January 17, testifying before the Senate Committee on the Judiciary on the subject of anticompetitive patent settlements in the U.S. pharmaceutical industry, FTC Commissioner Jon Leibowitz said that recent court cases have made it more difficult to bring antitrust cases to stop exclusion payment settlements between brand manufacturers and their generic competitors, and that “the impact of the court rulings is becoming evident in the marketplace.”
On January 9, the Commission received a petition from Service Corporation International (SCI) and Alderwoods Group, Inc. seeking approval to divest the properties listed below under three sale agreements, to KAG, LLC, which, prior to the closing of the transaction, will be a subsidiary of NorthStar Memorial Group, LLC.
On January 5, the Commission received a petition from Service Corporation International (SCI) and Alderwoods Group, Inc. seeking approval to divest a range of funeral home and cemetery services companies. Through this petition, a public version of which can be found on the Commission’s Web site as a link to this press release, the companies have requested approval to divest Parnick Jennings Funeral Home & Cremation Services of Cartersville, Georgia, to Rollings Funeral Service, Inc.
On December 28, the Commission announced its decision to challenge General Dynamics’ proposed $275 million acquisition of SNC Technologies, Inc. and SNC Technologies, Corp. (collectively, SNC). The FTC’s complaint alleged that the deal would undermine competition by bringing together two of only three competitors providing the U.S. military with melt-pour load, assemble, and pack (LAP) services used during the manufacture of ammunition for mortars and artillery.
On December 22, the Commission received a petition from Service Corporation International (SCI) and Alderwoods Group, Inc. seeking approval to divest to Keystone America, Inc., a wholly owned subsidiary of Keystone North America, Inc., the following companies and properties: 1) Hankins & Whittington-Dilworth Chapel, Charlotte, North Carolina; 2) Bush River Memorial Gardens, Columbia, South Carolina; 3) Elmwood Cemetery, Columbia, South Carolina; 4) Southland Memorial Gardens, West Columbia, South Carolina; 5) Caughman-Harman Funeral Home, Columbia, South Carolina; 6) Caughman-Harman Funeral Home, West Columbia, South Carolina; 7) Diuguid Funeral Service, Lynchburg, Virginia; 8) Diuguid Waterlick Chapel, Lynchburg, Virginia; 9) T.J. McGowan Sons Funeral Home, Garnersville, New York; 10) T.J. McGowan Sons Funeral Home, Haverstraw, New York; 11) Shaw & Sons Funeral Directors, Inc., Yakima, Washington; 12) Glen Haven Memorial Gardens, Macon, Georgia; and 13) Lambeth Troxler Funeral Home, Greensboro, North Carolina.
On December 20, the Commission received a petition from Service Corporation International (SCI) and Alderwoods Group, Inc. seeking approval to divest: 1) Conroe Memorial Park, Conroe, Texas; 2) Harper-Talasek Funeral Home, Killeen, Texas; 3) Palmer Mortuary, Sequin, Texas; 4) Trevino Funeral Home, Brownsville, Texas; 5) Darling-Mouser Funeral Home, Brownsville, Texas; 6) Elmwood Funeral Home, Abilene, Texas; 7) Elmwood Memorial Park, Abilene, Texas; 8) Sunset Memorial Home, Odessa, Texas; 9) Resthaven Gardens of Memory cemetery, Baton Rouge, Louisiana; 10) Resthaven Gardens of Memory funeral home, Baton Rouge, Louisiana; 11) Welsh Funeral Home, Gonzalez, Louisiana; 12) James F. Webb Funeral Home, Meridian, Mississippi; and 13) James F. Webb Funeral Home, Newton, Mississippi to Legacy Holdings.
On December 19, the Commission received a petition from Service Corporation International (SCI) and Alderwoods Group, Inc. seeking approval of a proposed divestiture related to SCI’s recent acquisition of Alderwoods. In the FTC’s consent agreement and order allowing the transaction to proceed with conditions, SCI and Alderwoods were required to divest a range of funeral home and cemetery services companies. Through this petition, the companies requested approval to divest: 1) Conejo Mountain Funeral Home, located at 2052 Howard Road, Camarillo, California (Southern Ventura County); and 2) Conjeo Mountain Memorial Park, located at the same address, to two wholly owned subsidiaries of Carriage Services, Inc.: Carriage Cemetery Services, Inc. (CCSI) and Cochrane’s Chapel of Roses, Inc. Under an agreement with SCI, CCSI will buy the cemetery assets and Cochrane’s will buy the funeral home assets.
FTC Challenges Terms of Johnson & Johnson’s Proposed Acquisition of Pfizer’s Consumer Healthcare Business To Protect Competition
On December 12, the Federal Trade Commission announced its decision to challenge the terms of Johnson & Johnson’s (J&J) proposed $16.6 billion acquisition of Pfizer Inc.’s (Pfizer) Consumer Healthcare business. The FTC’s complaint alleged that the transaction as originally proposed would reduce competition in the U.S. markets for over-the-counter (OTC) H-2 blockers used to prevent and relieve heartburn, OTC hydrocortisone anti-itch products, OTC night-time sleep aids, and OTC diaper rash treatments.
The Federal Trade Commissi