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.
Executive Agrees to Go to Jail for Submitting Falsified Documents to the Antitrust Agencies During the Merger Review Process
On May 3, 2012, the Antitrust Division of the Department of Justice (“DOJ”) announced that an executive of Hyosung Corporation, an affiliate of Nautilus Hyosung Holdings Inc. (“Nautilus”), agreed to plead guilty and serve five months in prison in the United States for obstruction of justice charges in connection with the antitrust agencies’ merger investigation of its proposed acquisition of U.S.-based Triton Systems. The transaction was abandoned.
On February 10, 2012, the Department of Justice (“Department”) entered into a settlement that allows International Paper to acquire Temple-Inland. The settlement agreement requires International Paper and Temple-Inland Inc. to divest three containerboard mills in order to proceed with their $4.3 billion merger. The Department said that the merger, as originally proposed, would have substantially lessened competition in the production and sale of containerboard, the type of paper used to make corrugated boxes, in the United States. The following mills are to be sold: (1) both the New Johnsonville Mill and the Ontario Mill, AND (2) either the Port Hueneme Mill or the Henderson Mill, but not both mills.
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
On October 21, 2011, the DOJ Antitrust Division (“DOJ”) filed a civil lawsuit in U.S. District Court in Washington, D.C. to prevent Grupo Bimbo S.A.B. de C.V. and BBU Inc. (collectively, “BBU”) from acquiring Sara Lee Corporation’s (“Sara Lee”) North American Fresh Bakery business. The DOJ simultaneously filed a Proposed Final Judgment, reflecting a settlement with BBU and Sara Lee upon which they agreed to divestitures of certain sliced bread brands and associated assets in select areas where the two companies compete head-to-head in order to proceed with the acquisition. Such divestitures would resolve competitive concerns alleged in the suit.
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.
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 May 23, 2011, the Department of Justice (“DOJ”) filed a civil antitrust lawsuit to block H&R Block Inc.’s (“H&R”) proposed acquisition of TaxAct, a digital do-it-yourself tax preparation software provider. The DOJ’s Antitrust Division filed its lawsuit in U.S. District Court in Washington, D.C., to prevent H&R Block from acquiring 2SS Holdings Inc., an entity within TA IX L.P. and the maker of TaxACT. The DOJ’s complaint details H&R’s motive to eliminate competition.
VeriFone and Hypercom Abandon Planned Divestiture of Hypercom’s U.S. Assets When Faced With DOJ’s Lawsuit
On May 20, 2011, the DOJ announced that VeriFone Systems Inc.(“VeriFone”), Hypercom Corp. (“Hypercom”), and Ingenico S.A. (“Ingenico”) abandoned plans for Hypercom to divest its U.S. point-of-sale (“POS”) business to Ingenico as the Department of Justice (“DOJ”) did not find the divestiture adequate to resolve the competitive concerns raised by the VeriFone/Hypercom transaction.
DOJ Challenges George’s Inc.’s Consummated Acquisition of Tyson Foods Inc.’s Harrisonburg Poultry Processing Complex
On May 10, 2011, the Department of Justice (“DOJ”) filed a civil antitrust lawsuit challenging George’s Inc.’s (“George’s”) acquisition of Tyson Foods’ (“Tyson”) chicken processing complex in Harrisonburg, VA. This is a challenge to a consummated $3 million acquisition in a very limited geographic market in Virginia.
On May 6, 2011, Unilever NV ("Unilever”) and the U.S. Department of Justice (“DOJ”) reached an agreement to settle antitrust concerns over its $3.7 billion acquisition of hair care company Alberto-Culver Co. (“Alberto”). The DOJ’s Antitrust Division filed a civil antitrust lawsuit in U.S. District Court in Washington, D.C. to block the proposed transaction between the parties of the acquisition along with a proposed consent decree that would resolve the competitive concerns alleged in the lawsuit.
DOJ Conditions Google’s Acquisition of ITA Software by Requiring Google to Develop and License Travel Software
On April 8, 2011, the Department of Justice (“DOJ”) filed a civil antitrust lawsuit in U.S. District Court in Washington, D.C., to block the proposed acquisition of ITA Software Inc. (“ITA”) by Google Inc. (“Google”). At the same time, the DOJ filed a proposed consent decree to resolve the DOJ’s antitrust concerns. The settlement requires Google to develop and license travel software currently owned by ITA, to establish internal firewall procedures and to continue software research and development pursued by ITA. Google will also be required to provide mandatory arbitration under certain circumstances and provide a mechanism for complaints if Google acts in an unfair manner.
On April 8, 2011, Stericycle Inc. (“Stericycle”) entered into a settlement agreement with Department of Justice (“DOJ”) allowing it to proceed with its acquisition of Healthcare Waste Solutions Inc. (“HWS”). The DOJ along with the attorney general of the state of New York filed an antitrust lawsuit to block the transaction and simultaneously filed a proposed settlement to resolve antitrust concerns raised by the transaction.
On March 29, 2011, Department of Justice (“DOJ”) reached a settlement with Dean Foods Company (“Dean”) that requires Dean to divest a significant milk processing plant in Waukesha, Wis., and related assets that it acquired from the Foremost Farms USA Cooperative, including the Golden Guernsey brand name. The DOJ’s Antitrust Division and state attorneys general from Illinois, Michigan and Wisconsin, filed a proposed consent decree in U.S. District Court for the Eastern District of Wisconsin in Milwaukee. The settlement agreement resolves the antitrust concerns alleged in the civil antitrust lawsuit originally filed by the DOJ and the state attorneys general on Jan. 22, 2010.
Canadian Competition Bureau Blocks First Merger After 6 Years – And It’s A Non-Reportable, Consummated Transaction
On January 26, 2011, in a surprising enforcement action, the Canadian Competition Bureau publically announced its application to the Competition Tribunal for an order to undo the consummated acquisition by CCS Corporation (“CCS”) of Complete Environmental Inc. (“Complete”) and its proposed Babkirk Secure Landfill in northeastern British Columbia (Babkirk”). The Competition Bureau determined, following a thorough review of the transaction, that CCS’s acquisition of Complete would substantially reduce potential competition for the disposal of hazardous waste in northeastern British Columbia. Specifically, the Competition Bureau is seeking an order from the Competition Tribunal dissolving the merger and requiring CCS to divest itself of Complete entirely, or, in the alternative, to divest other appropriate assets to address the Bureau’s concerns.
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 14, 2010, the U.S. Department of Justice announced a settlement with Pittsburgh-based L.B. Foster Co. to divest a West Virginia plant used in development, manufacture and sale of certain railroad joints to Koppers Inc., a wholly owned subsidiary of Koppers Holdings Inc., in order to proceed with Foster’s acquisition of Portec Rail Products Inc. DOJ said the acquisition as originally proposed would combine the two primary U.S. manufacturers of bonded insulated rail joints and two of only three U.S. manufacturers of polyurethane-coated insulated rail joints. Divestiture of the West Virginia plant will preserve competition. Without the divestiture, the acquisition would lead to higher prices, lower quality, less customer service and less innovation.
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.
On September 16, 2010, the United Kingdom’s Office of Fair Trading (“OFT”) and the Competition Commission (“CC”) published the final version of their new joint Merger Assessment Guidelines (“Guidelines”). The Guidelines expand and revise the previous guidance published separately by OFT and CC in various publications and attempt to clarify the 2002 Enterprise Act.
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 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 March 8, 2010, Blue Cross Blue Shield of Michigan's (Blue Cross-Michigan) subsidiary, Blue Care Networks of Michigan, abandoned its attempt to purchase Physicians Health Plan of Mid-Michigan (PHP) after the Department of Justice and the Michigan Attorney General informed the companies that they would file an antitrust lawsuit to block the acquisition.
On February 22, 2010, the DOJ entered into a settlement with KeySpan Corporation that requires KeySpan to pay $12 million for violating the antitrust laws by entering into an agreement restraining competition in the New York City electricity capacity market. The DOJ alleged that the financial derivative agreement likely resulted in a price increase for retail electricity suppliers and, in turn, an increase in electricity prices for consumers.
On January 25, 2010, the Department of Justice entered into a settlement agreement with Ticketmaster Entertainment Inc. that allowed it to complete its acquisition of Live Nation, Inc. The settlement agreement required Ticketmaster to license its ticketing software, divest ticketing assets and subject itself to anti-retaliation provisions in order to proceed with its proposed merger with Live Nation. The proposed settlement is designed to protect competition for primary ticketing, which will in turn maintain incentives for innovation and discounting.
On January 20, the Department of Justice reached a settlement with the Daily Gazette Company and MediaNews Group Inc. (now known as Affiliated Media Inc.), that requires the companies to restructure their newspaper joint operating arrangement (JOA) and take other steps to remedy the anticompetitive effects of the 2004 transaction, which was originally challenged by the DOJin May 2007.
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 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.
DOJ SETTLES WITH MICROSEMI TO RESTORE COMPETITION IN SEMICONDUCTOR DEVICES USED IN MILITARY AND SPACE APPLICATIONS
On August 20, 2009, the DOJ announced that it reached a proposed settlement with Microsemi Corporation requiring the company to divest all of the assets that it acquired from Semicoa Inc. on July 14, 2008. The DOJ investigated the consummated acquisition and filed a civil antitrust suit to force Microsemi to divest the Semicoa assets to restore competition on December 18, 2008. Without this settlement agreement to divest, there would be little or no competition in the development, manufacture and sale of certain semiconductor devices used in military and space programs essential to the security of the United States.
On August 20, 2009, Oracle announced that the DOJ closed its investigation of Oracle's acquisition of Sun. The DOJ issued a second request to further investigate the transaction in late June. The DOJ ended its investigation approximatley two months after issuing the second request without requiring any remedy.
On July 30, 2009, the DOJ announced that it reached a settlement that will require Sapa Holding AB and Indalex Holdings Finance Inc. to divest a North Carolina aluminum sheathing facility in order to proceed with Sapa's proposed $150 million acquisition of Indalex. According to the complaint, the transaction would substantially lessen competition for the manufacture and sale of aluminum sheathing (coiled extruded aluminum tubing) used in the manufacture of high frequency coaxial cable in the United States, resulting in increased prices and reduced quality, service and innovation, had the parties not agreed to the divestiture.
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 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 February 20, 2009, JBS and National Beef announced the abandonment of the JBS/National Beef transaction. The Antitrust Division filed an antitrust lawsuit in the U.S. District Court in Chicago to block the proposed acquisition, alleging that the deal would result in lower prices paid to cattle suppliers and higher beef prices for consumers. At that time, Attorneys General of Colorado, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas and Wyoming joined the Department's lawsuit. On Nov. 7, 2008, the states of Arizona, Connecticut, New Mexico and Mississippi joined the lawsuit as well.
SHIPPING EXECUTIVES CHARGED WITH CONSPIRACY TO ELIMINATE COMPETITION AND RAISE PRICES FOR MOVEMENT OF GOODS BETWEEN THE U.S. AND PUERTO RICO
On October 1, 2008, four U.S. shipping company executives including Peter Baci of Jacksonville, FL, Kevin Gill and Gregory Glova of Charlotte, NC, and Gabriel Serra of San Juan, Puerto Rico pled guilty for their role in a broad conspiracy to rig bids, fix prices, and allocate market share for customers transporting goods between the United States and Puerto Rico. A fifth shipping executive, Alexander Chisholm, of Jacksonville, FL was charged with obstruction of justice. He agreed to plead guilty and serve jail time.
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.
DOJ REQUIRES DIVESTITURE IN SIGNATURE’S ACQUISITION OF HAWKER BEECHCRAFT’S FLIGHT SUPPORT SERVICE BUSINESS
On July 3, 2008, the Department of Justice (“DOJ”) entered into a settlement agreement allowing Signature Flight Support Corporation to acquire Hawker Beechcraft’s (“Hawker”) fixed based operations (“FBO”). The settlement agreement requires Signature to divest its flight support service assets.
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 June 10, 2008 the Department of Justice (“DOJ”) along with the State of Vermont entered into a settlement agreement that would allay their concerns that Verizon Communication Corp.’s (“Verizon”) acquisition of Rural Cellular Corp. (“RCC”) for $2.7 billion as proposed is anticompetitive. To resolve antitrust concerns, the DOJ required Verzion to divest assets in six different geographic locations in Vermont, New York and Washington. Verizon and RCC provide service to approximately 60 percent of the consumers in those areas. The Department said that the transaction as originally proposed would have substantially lessened competition to the detriment of consumers of mobile wireless telecommunications services in those areas, potentially resulting in higher prices, lower quality and reduced network investments.
On June 5, 2008, the Department of Justice (“DOJ”) approved a joint venture between SABMiller plc and Molson Coors Brewing Company which combined their operations in the United States and Puerto Rico. While the transaction combined two of three largest U.S. brewers in the United States, the DOJ’s Antitrust Division did not find any evidence that this joint venture would reduce competition.
On May 28, 2008, the Department of Justice blocked a proposed $750 million acquisition of Houghton Mifflin Harcourt Publishing Company's College Division (“HM College”) by Cengage Learning, Inc (“Cengage”). The DOJ required the divestiture of Cengage’s assets related to the textbooks and education materials of 14 of its college level courses. The textbooks ranged from topics on foreign languages to business.
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.
On April 29, 2008, the DOJ required the divestiture of assets of Regal Cinema (“Regal”) and Consolidated Theatres Holding GP (“Consolidated”) in three metropolitan areas in North Carolina in order for the $210 million merger between the companies to proceed. The DOJ believes that the transaction would have resulted in less competition and higher ticket prices at the Crown Point 12 Cinema in Charlotte, the Raleigh Grand in Raleigh, the Town Square 10 in Garner (a suburb of Raleigh) and Hollywood 14 in Asheville, NC.
On March 24, 2008, the Department of Justice (“DOJ”) approved a proposed merger between XM Satellite Radio Holdings, Inc. (“XM”) and Sirius Satellite Radio, Inc. (“Sirius”), the only two satellite radio service providers in the United States. The DOJ stated despite a merger to monopoly that the merged companies would not increase prices to satellite radio customers because of alternative services for consumers and future technological changes that are going to provide consumers with more alternatives.
On March 5, 2008, Altivity Packaging LLC (“Altivity”) and Graphic Packaging International Inc. (“Graphic”) entered into a settlement agreement with the DOJ that they will divest two paperboard mills—one in Indiana and the other in Pennsylvania—in order to proceed with their proposed $1.75 billion merger. The Antitrust Division stated that the merger, as originally proposed, would have substantially lessened competition in the production and sale of a type of paperboard used to make folding cartons for consumer and commercial packaging, including cereal boxes. If for any reason divestiture of the Philadelphia CRB mill is not accomplished, the proposed settlement would require the sale of Altivity's Santa Clara, California mill.
On March 4, 2008, the DOJ reached a settlement that will require Cookson Group plc and Foseco plc to divest Foseco's U.S. carbon bonded ceramic (“CBC”) business in order to proceed with Cookson's proposed $1 billion acquisition of Foseco. Allegedly, the transaction, as originally proposed, would substantially lessen competition in the United States for certain CBCs used in the continuous casting steelmaking process, resulting in increased prices and reduced service and innovation.
On February 25, 2008, UnitedHealth Group Inc. (“United”) and Sierra Health Services Inc. (“Sierra”) entered into a settlement agreement that required United to divest assets relating to United's Medicare Advantage business in the Las Vegas area in order to proceed with United's acquisition of Sierra. Allegedly, the transaction, as originally proposed, would have created a combined company controlling 94 percent of the Medicare Advantage health insurance market in the Las Vegas area and resulted in higher prices, fewer choices, and a reduction in the quality of Medicare Advantage plans purchased by senior citizens in the Las Vegas area.
On February 19, 2008, the Antitrust Division entered into a settlement agreement requiring The Thomson Corporation (“Thomson”) to sell financial data and related assets in three markets for financial data in order to proceed with Thomson's proposed $17 billion acquisition of Reuters Group PLC (“Reuters”).
On February 13, 2008, the DOJ entered into a settlement agreement with Clear Channel, the largest operator of radio stations in the United States, to divest radio stations in four cities in order for a group of private equity investors led by Bain Capital (“Bain”) and Thomas H. Lee Partners (“THL”) to proceed with their acquisition of a controlling interest in Clear Channel. The divestitures were required to assure continued competition in markets where the transaction would otherwise result in a significant loss of competition.
IHOP Corporation announced its plans to buy Applebee's International Inc. for $25.50 per share, as the newly restructured company seeks growth outside its pancake chain. IHOP franchises almost all of its restaurants, and believes it can improve the currently struggling chain by franchising a majority of Applebee's 508 company-operated restaurants.
In the race to build a more powerful marketing vehicle, Yahoo Inc. made its move by taking control of Right Media two weeks after Google agreed to buy DoubleClick in April. Right Media creates an open exchange to help buyers and sellers trade digital media more effectively, and Yahoo is counting on this acquisition to enhance its Internet ad sales. This form of advertisement is expected to be an increasingly popular method for companies to promote their brands rather than the use of newspapers, magazines, and television.
Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. are the only two corporations authorized by the Commission to provide satellite radio service in the United States. On March 20, 2007 they submitted an application to the FCC requesting permission to combine into a single entity. Each entity would own half of the company, and the equity ownership would be divided evenly between the shareholders of both corporations.
Justice Department Dismisses Antitrust Lawsuit Against Exelon Corp. And Public Enterprise Service Group Inc.
On September 28, the DOJ announced that it filed a notice with the U.S. District Court for the District of Columbia to dismiss its antitrust complaint challenging the potential acquisition of Public Service Enterprise Group Inc. (PSEG) by Exelon Corp. Exelon formally abandoned its effort to acquire PSEG, and therefore the lawsuit and proposed consent decree were no longer necessary.
On September 27, five major cable companies asked the FCC for conditions on AT&T’s merger with BellSouth to ensure that the combined phone giants cannot discriminate against cable’s competing digital-phone service. The cable companies seeking these conditions were Advance/Newhouse Communications, Charter Communications, Cablevision Systems, Cox Communications and Insight Communications.
On September 19, the Senate Commerce Committee unanimously reported on the nomination of FCC Chairman Kevin Martin for a second five-year term. Martin was approved following an off-the-floor markup held after the first vote on the Senate floor. According to Commerce Committee spokesman Joe Brenckle, the only senator to miss the 21-0 vote was Sen. John McCain (R-Arizona). Martin now awaits consideration by the full Senate.
On September 18, the DOJ announced that it filed a notice with the U.S. District Court for the District of Columbia to dismiss its antitrust complaint regarding the potential acquisition of Falconbridge Limited by Inco Limited because Inco has formally abandoned its effort to acquire Falconbridge. The DOJ said that the lawsuit and proposed consent decree are no longer necessary as Falconbridge was instead acquired by Xstrata plc, a Swiss mining company, in August 2006. The DOJ also said that Xstrata's acquisition of Falconbridge does not pose any competitive problems.
FTC/DOJ Issue Annual HSR Premerger Notification Report to Congress; Commission Approves Final Consent Order in Matter of CardSystems Solutions
The Commission, with the concurrence of the Acting U.S. Assistant Attorney General for Antitrust, has authorized the release of the Twenty-Eighth Annual Report to Congress Regarding the Hart-Scott-Rodino (HSR) Premerger Notification Program. The report summarizes Commission and Department of Justice (DOJ) actions conducted under the HSR Act in fiscal year 2005, noting that 1,695 premerger filings were received 17 percent more than the 1,454 filings received in fiscal year 2004.
On September 7, the DOJ announced that ALLTEL Corporation agreed to divest assets in rural areas of Minnesota in order to proceed with its $1.075 billion acquisition of Midwest Wireless Holdings LLC. The DOJ said that the deal as originally proposed would have resulted in higher prices, lower quality, and diminished investment in network improvements for consumers of mobile wireless telecommunications services in four areas where both ALLTEL and Midwest Wireless currently operate.
The Federal Trade Commission (“FTC”) announced a law enforcement action on August 18 challenging a 2005 acquisition that combined the natural gas liquids (“NGL”) storage businesses of Enterprise Product Partners, L.P. and TEPPCO Partners, L.P. under common ownership. The FTC’s complaint alleged that the transaction likely would result in higher prices and service degradations by reducing the number of commercial salt dome NGL storage providers in Mont Belvieu, Texas, from four to three.
Internet Video Distributor VDC Complains to FCC about Inability to Secure Carriage Deals with Established Cable Networks
In an August 14 letter to the FCC, internet video distributor VDC Corp. (“VDC”), owner of VDC.com, complained that it is having difficulty securing carriage deals with established cable networks. While VDC.com distributes content from Discovery Communications, most of the company’s carriage deals are with smaller cable networks such as The Pentagon Channel and Mav TV. The broadband video site also carries home-shopping channels QVC and ShopNBC. VDC chairman Scott Wolf said that VDC plans to seek relief from the FCC “in the next few weeks” under the FCC’s program access rules. In his letter to FCC chairman Kevin Martin, Wolf alleges that some cable networks are balking at licensing their networks to VDC.com because of “external influence, mainly from the large [cable] MSOs.”
The European Commission said on August 8 it would look into the Italian government's move to block a proposed merger between the Italian highway operator Autostrade and the Spanish infrastructure company Abertis. The Italian government and highways regulator rejected the proposed merger, worth nearly 12 billion euros ($15 billion). The deal created the world's largest highway company, operating in 16 countries with a road network of 6,713 kilometers (4,171 miles).
On August 3rd, European Union antitrust regulators asked Spain to explain why it attached conditions to German energy company E.On AG's $34 billion bid for the Spanish utility Endesa SA. Spain's National Energy Commission said last week that it would permit the 26.9 billion euro deal only if E.On sells about a third of Endesa's power generation assets.
On August 1, the DOJ Antitrust Division announced that it would require Mittal Steel Company N.V. to divest one of three North American tin mills it will own after its $33 billion acquisition of Arcelor S.A. in order to proceed with the deal. After a thorough investigation, the DOJ concluded that the original deal would have adversely affected competition by eliminating constraints on the ability of tin mill products producers to coordinate their behavior and thereby increase the price of tin mill products to can manufacturers and other customers particularly in the eastern United States.
On July 26, Oji, Japan's largest paper manufacturer said it would go ahead with a tender offer for sixth-ranked Hokuetsu in a deal that could exceed $1.4 billion, a rare attempt at a hostile takeover in a society where deals are generally more cautious and consensus-led. An Oji-Hokuetsu merger would create the world's fifth-largest paper manufacturer. In a move to prevent Oji Paper Co.'s hostile takeover bid, Nippon Paper Industries Co. started purchasing large amounts of Hokuetsu Paper Mills Ltd.’s shares.
On July 18, the FTC announced that it reached a settlement that would allow Linde AG’s acquisition of the BOC Group to proceed. As is typical in merger reviews, the FTC staff focused on specific product overlaps to determine what assets needed to be divested to resolve the antitrust concerns. The Commission approved the merger so long as the companies divest two groups of assets: (1) liquid oxygen and liquid nitrogen and (2) bulk refined helium. The divestitures are required to satisfy the FTC that competition will not be harmed following the transaction. That being said, an up front buyer was required for one set of assets, while an upfront buyer was not required for the other. The consent order states that Linde will have to find FTC-approved buyer for the liquid oxygen and liquid nitrogen assets within six months, however, the FTC required Linde to divest the bulk refined helium assets to an upfront buyer, Nippon Sanso.
On July 14, a federal judge said he wants to examine internal FCC documents regarding two large recent telephone company mergers to see if the Justice Department protected market competition in approving the buyouts. U.S. District Court Judge Emmet G. Sullivan's review concerns the now-completed mergers of SBC Communications Inc. (“SBC”) with AT&T Corp. (“AT&T”) and Verizon Communications Inc. (“Verizon”) with MCI Inc. (“MCI”).
On July 13, the FCC approved the sale of substantially all of the cable systems and assets of Adelphia Communications Corporation (“Adelphia”) to Time Warner Inc. (“Time Warner”) and Comcast Corporation (“Comcast”), the exchange of certain cable systems and assets between affiliates or subsidiaries of Time Warner and Comcast, and the redemption of Comcast’s interests in Time Warner Cable and Time Warner Entertainment Company.
On June 27, the Department of Justice announced that it will require The McClatchy Company and Knight Ridder Inc. to divest the St. Paul Pioneer Press in order to proceed with their proposed multi-billion dollar newspaper merger. The DOJ said that the transaction, as originally proposed, would have eliminated head-to-head competition between McClatchy and Knight Ridder and likely would have resulted in higher prices for advertisers and readers in the Minneapolis/St. Paul metropolitan area.
On June 22, the DOJ announced that the $16 billion merger between Exelon Corp. and Public Service Enterprise Group Inc. can proceed as long as they divest six electricity generating plants, which in total provide more than 5,600 megawatts of generating capacity. The DOJ is making the companies shed two generating plants in Pennsylvania and four in New Jersey.
On June 19, the FCC approved Intelsat Ltd. (“Intelsat”) and PanAmSat Holding Corp.'s (“PanAmSat”) $6.4 billion cash-and-debt deal, concluding the transaction is unlikely to have an adverse effect on Fixed Satellite Services (“FSS”) price, quantity or transponder availability for customers from broadcasters to the U.S. government. The FCC’s five commissioners approved the deal unanimously.
On June 14, McClatchy Co. announced that the Department of Justice is extending its review of the company's sale of two California newspapers to MediaNews Group Inc. The two properties, the San Jose Mercury News and the Contra Costa Times, are part of a $1 billion three-way swap of four papers that also involves Hearst Corp. On April 26, McClatchy announced plans to sell the four papers, acquired as part of its $4.5 billion purchase of Knight Ridder Inc. McClatchy must divest the four papers and eight others to raise cash and satisfy Justice Department antitrust concerns over the larger Knight Ridder deal. The DOJ’s second request for information, could delay the MediaNews-Hearst arrangement until late summer.
On May 26, Intelsat Ltd. announced that it received clearance from the Department of Justice for its $6.4 billion cash-and-debt deal to buy rival PanAmSat Holdings Corp. Under the terms, Intelsat would pay $25 in cash for each share of PanAmSat and assume about $3.2 billion in debt. The Bermuda-based satellite communications company said last August it would buy PanAmSat in a deal that would give the company nearly two dozen satellites above North America.
On May 23, the Department of Justice approved Precision Castparts Corp.'s $540 million cash acquisition of Special Metals Corp. Huntington, West Virginia based Special Metals is the world's biggest maker of nickel-based alloys and superalloys for forged products. Precision, based in Portland, Oregon, is one of Special Metals' customers and manufactures components for the aerospace, power and automotive markets. Precision aims to cut costs by bringing its alloy production in-house.
On May 23, Attachmate Corp. received clearance from the Department of Justice for its $495 million cash purchase of San Jose-based NetlQ Corp. The deal was announced in April. Seattle-based Attachmate is a privately held vendor of software used to link mainframes to PCs. The takeover removes ailing NetIQ from the ranks of publicly traded companies. NetlQ has struggled to integrate several acquisitions and faced mounting competition in the market for software used to manage corporate computer networks.
On May 22, it was announced that the government of New Zealand was reviewing the Commerce Act, which encompasses its antitrust laws that cover mergers and acquisitions in order to ensure that New Zealand companies would be able to compete globally. Commerce Minister Lianne Dalziel reportedly said that the government may consider granting increased powers to the Commerce Commission, which functions as the New Zealand antitrust regulator, to approve deals that could have a broader public benefit even if such deals reduce competition. Dalziel also told reporters that there were concerns within the New Zealand business community that businesses could not achieve significant scale to compete globally. The announcement was welcomed by economists and competition lawyers within the country.
On May 17, the DOJ’s Antitrust Division granted early termination to Sprint Nextel’s acquisition of UbiquiTel, the exclusive provider of Sprint digital wireless mobility communications network products and services under the Sprint brand name to midsize markets in the Western and Midwestern United States. UbiquiTel and Sprint Nextel announced on April 20th that Sprint Nextel would acquire UbiquiTel for approximately $1.3 billion, including the assumption of approximately $300 million of net debt.
On May 12, the DOJ’s Antitrust Division announced that it reached a settlement agreement with Mittal Steel Company N.V. regarding its offer to acquire Arcelor S.A. The agreement would resolve potential antitrust concerns in the event that the Antitrust Division concludes the combination of Mittal and Arcelor raises anticompetitive concerns. Under the agreement, the DOJ will continue to investigate the competitive implications of the combination of Mittal and Arcelor -- the world's two largest steel producers. The agreement requires Mittal to divest Dofasco Inc., currently owned by Arcelor, to ThyssenKrupp AG in the event the DOJ determines the combination of Mittal and Arcelor is likely to result in a substantial lessening of competition. If Mittal acquires Arcelor but is unable to divest Dofasco, the agreement requires Mittal to divest certain alternative assets to a buyer acceptable to the DOJ. The DOJ has determined that the divestiture of either Dofasco or the alternative assets would address the potential competitive problem identified by the Antitrust Division.
On May 11, the DOJ cleared KLA-Tencor Corp.'s acquisition of ADE Corp. KLA supplies integrated circuit manufacturers with equipment to manage their chip wafer fabrication process while ADE makes technology to detect defects in semiconductor wafers and computer disks. The deal was announced shortly after KLA announced it abandoned plans to buy August Technology Corp.
On May 2, AT&T Inc. (“AT&T”) and BellSouth Corp. (“BellSouth”) confirmed that the DOJ had issued a second request with respect to AT&T's nearly $90 billion acquisition of BellSouth. This transaction will make AT&T the dominant phone carrier in 22 states and comes on the heels of two other large telecom deals and amid growing concern about the impact of consolidation on control of America's rapidly growing broadband communications networks. Last year, regulators approved SBC Communications Inc.'s $16 billion merger with AT&T Corp., forming ATT Inc., and Verizon Communications Inc.'s $6.75 billion takeover of MCI Inc. The Federal Communications Commission also must approve the deal.
On April 20th, the Federal Trade Commission announced a consent agreement that will protect competition and consumers in several significant medical device markets affected by Boston Scientific’s proposed $27 billion acquisition of the Guidant Corporation (“Guidant”). The agreement will allow the transaction to proceed, provided the parties comply fully with its terms.
On March 30th, Fresenius AG agreed to sell 91 outpatient kidney dialysis clinics and financial interests in 12 more to settle Federal Trade Commission charges that Fresenius’ purchase of rival dialysis provider Renal Care Group, Inc. would violate federal antitrust laws. When the deal is finalized, Fresenius will be the largest provider of outpatient dialysis services in the United States.
On March 27th, the Federal Trade Commission and the U.S. Department of Justice jointly released a “Commentary on the Horizontal Merger Guidelines” that continues the agencies’ ongoing efforts to increase the transparency of their decision-making processes – in this case, with regard to federal antitrust review of “horizontal” mergers between competing firms. The analytical framework and standards used to scrutinize the likely competitive effects of such mergers are embodied in the Horizontal Merger Guidelines, which the agencies jointly issued in 1992, and revised, in part, in 1997. The Commentary, which is available now on both agencies’ Web sites, explains how the FTC and DOJ have applied particular Guidelines’ principles, in the context of actual merger investigations.
On March 8th, Botox marketer Allergan, Inc., and Inamed Corporation agreed to divest the rights to develop and distribute Reloxin, a potential Botox rival, in order to settle Federal Trade Commission charges that Allergan’s $3.2 billion purchase of Inamed would violate federal antitrust laws. The FTC alleges that Allergan’s purchase of the expected first serious competitor to Botox likely would reduce competition and force consumers to pay higher prices for the botulinum toxin type A products used by millions of Americans to temporarily erase frown lines and wrinkles. Under the terms of the FTC settlement, the companies will return the development and distribution rights to Reloxin to Ipsen Ltd., its U.K.-based manufacturer.
On March 5, AT&T announced its intention to merge with Bellsouth. While the Antitrust Division is conducting its investigation of the proposed merger, very little with regards to conditions or divestitures are expected because there is little overlap between the companies' two networks. One area of concern is the area of wholesale dedicated access and spectrum.