Antitrust Division Merger Challenges
Union Pacific Corp./Southern Pacific Rail Corp. (4/12/96)
In comments filed with the Surface Transportation Board,
the Division expressed its competitive concerns regarding the
merger between Union Pacific Corp. and Southern Pacific Rail Corp.
The Division noted that in a large number of markets throughout the western
United States, the number of possible rail carrier competitors would decline from
two to one or from three to two, which would likely result in price increases to shippers
and consumers of approximately $800 million. Thereafter, on July 3, 1996, the Surface
Transportation Board approved the $5.4 billion merger.
United States v. Titan Wheel International, Inc., (5/7/96)
The Division filed a complaint which alleged that Titan Wheel International
violated the premerger notification reporting requirements of the Hart-Scott-Rodino
Act in connection with its $41 million acquisition of a Pirelli Armstrong Tire
Corp. plant in Des Moines, Iowa. According to the complaint, Titan took control
of the Pirelli assets, including the inventory, machinery, equipment, and customer and supplier
lists, before the companies notified federal antitrust agencies about the acquisition.
The Hart-Scott-Rodino Act of 1976 imposes notification and waiting period requirements
on individuals and companies before they can consummate acquisitions of stock
or assets over a certain value or ownership percentage. Titan was in continuous
violation of the law until the purchase agreement in the acquisition was amended
and control of the plant returned to Pirelli Armstrongóa total of 13 days. A
proposed final judgment was filed simultaneously settling the suit, under which
Titan agreed to pay a civil penalty in the amount of $130,000. The final judgment
was entered by the Court on May 10, 1996.
Darling International, Inc./Modesto Tallow Company (5/23/96)
In response to the Divisionís competitive concerns,
Darling abandoned its proposed acquisition of Modesto Tallow Company,
a small rendering company located in Modesto, California and about thirty
miles from Turlock. Had the merger gone forward, it could have resulted in
increased prices in the tallow/rendering industry.
UNC, Inc./CFC Aviation (5/29/96)
The Division did not oppose UNCís proposed $150 million purchase
of Phoenix-based CFC Aviation Services, L. P. after UNC divested one of its jet
engine heavy maintenance businesses to Sabreliner. As originally structured, the
acquisition would have lessened competition in the $100 million market for heavy repair
of Allied Signalís TFE 731 turbofan engines, the premier business jet engine in the United States.
The merger would have combined the only independent service centers authorized by Allied Signal to
perform heavy maintenance on the TFE 731.
Smith International, Inc./Anchor Drilling Fluids (6/5/96)
The Division agreed to a modification of a 1994 consent decree allowing Smith
International to purchase Anchor Drilling Fluids, provided that Smith divested
Anchorís U. S. drilling fluids business. Drilling fluids are used in various
drilling applications: they are pumped through drill pipes to cool and lubricate
the cutting tools on the pipe, remove cuttings from the drill hole, and control
down hole pressure to prevent an explosion of the drill site. Smith was the
majority owner of M-I, the largest drilling fluids company in the United States,
and Anchor Drilling Fluids was the fourth largest producer and distributor of
drilling fluids in the United States.
(Description of photograph: Silhouette of oil-pumping equipment.)
Sinclair Broadcast Group, Inc./River City Broadcasting L. P. (6/6/96)
In response to the Divisionís concerns that the transaction posed serious antitrust concerns in the sale of radio advertising in the Columbus, Ohio market, Sinclair and River City agreed to restructure the transaction by amending their purchase agreement to exclude the Columbus station.
ConAgra/Mrs. Smithís, Inc. (6/7/96)
ConAgra abandoned its plans to acquire 100 percent of Mrs. Smithís, a wholly-owned subsidiary of J. M. Smucker Company, after the Division expressed concern that the acquisition would have anticompetitive effects in the frozen pie market. Mrs. Smithís was the largest competitor in that market.
United States v. American Skiing Company and S-K-I Limited (6/11/96)
The Division challenged the $137 million acquisition of S-K-I Limited by American
Skiing Company, and charged that the acquisition would raise prices and eliminate
discounts for day skiing trips for Maine residents and weekend ski excursions
for residents of Maine, eastern Massachusetts, eastern Connecticut, and Rhode
Island. A proposed final judgment was filed simultaneously with the complaint,
requiring divestiture of New Hampshire ski resorts at Waterville Valley and
Mount Cranmore. Without the divestiture, American Skiing would have controlled
eight of the largest ski resorts serving skiers residing in the eastern portions
of New England.
Cooper Cameron Corp./Ingram Cactus Co. (6/13/96)
In response to the Divisionís concerns that Cooper Cameronís $98 million acquisition of Ingram Cactus would lessen competition in the U. S. market for geothermal wellheads and valves, Cooper Cameron agreed to license and supply certain oil well equipment and technology to a third company, Daniel Valve Co. Without this resolution, the merger would have combined the two largest suppliers of geothermal wellheads and valves and would have lessened competition for customers of important oil well equipment in the United States.
Park Corp./Johnstown Corp. (6/17/96)
In response to the prospect of an antitrust suit by the Division, Park Corp., the nationís largest producer of cast steel industrial equipment, abandoned its bid to buy Johnstown Corp. at a bankruptcy auction. Had Park been allowed to acquire Johnstown, it would have controlled a monopoly share of the markets for both cast steel work rolls and large slag pots, which could have resulted in increased prices for consumers.
Bank of Boston/BayBanks (6/18/96)
In response to the Divisionís concerns that the $2 billion merger between Bank
of Boston and BayBanks would lessen competition for banking services available
to small and medium-sized businesses, the parties agreed to sell 20 bank branches
located in the Boston metropolitan area, with total deposits of approximately
$860 million, to USTrust. The Division had conducted a joint investigation with
the Office of the Massachusetts Attorney General.
United States, State of California, State of Connecticut, State of Illinois,
Commonwealth of Massachusetts, State of New York, State of Washington, and State
of Wisconsin v. The Thomson Corp. and West Publishing Company (6/19/ 96)
The Division challenged the $3.4 billion merger of two of the nationís largest
legal publishers, Thomson Corporation and West Publishing, alleging that the
acquisition would lessen competition in 9 markets for enhanced primary law products
(legal publications of statutes or court decisions in which commentary is offered)
and in more than 50 markets for secondary law products (treatises and legal
guides), as well as in the online services market. A proposed final judgment,
filed simultaneously with the complaint, settled the suit. The final judgment
required the divestiture of more than 40 products by Thomson, guaranteed access
to important databases, required Thomson to license openly (for a capped fee)
other law publishers the right to use the pagination of individual pages in
Westís National Reporter System in their products, and gave options to three
states to reopen bidding for certain contracts.
Genencor International, Inc./Solvay, S. A. (7/1/96)
The Division announced that after it raised concerns that Genencor Internationalís acquisition of Solvayís worldwide industrial enzyme business would lessen competition in U. S. markets for the sale of alpha amylase and glucoamylase enzymes, the transaction was restructured. Genencor agreed to license and supply technology relating to certain enzymes used to process starch to a third company, Nagase Biochemicals, Ltd. These enzymes are used for processing starch-containing raw materials (usually corn) into sugar-containing syrups (such as high-fructose corn syrup) and fuel alcohol.
United States v. Jacor Communications, Inc. and Citicasters, Inc. (8/5/
The Division challenged the $770 million merger between Jacor and Citicasters,
two of the nationís largest radio station owners. The complaint alleged that
the combination would control more than 50 percent of the sales of radio advertising
time in Cincinnati and could enable the companies to increase prices to advertisers
and substantially reduce competition in the $80 million Cincinnati radio advertising
market. A proposed final judgment, filed simultaneously with the complaint,
settled the suit. Jacor and Citicasters agreed to divest WKRQ-FM, a leading
Cincinnati contemporary music station, to an independent buyer. The Jacor/Citicasters
acquisition was one of the first of many radio industry transactions announced
following passage of the Telecommunications Reform Act of 1996, which relaxed
previous limits on radio ownership.
(Description of photograph: Two broadcasting towers with several satellite
Outdoor Systems, Inc./Gannett Co. (8/12/96)
The Division announced that after it raised competitive concerns with Outdoor Systemsí acquisition of the Outdoor Division of Gannett, Outdoor Systems agreed to sell its Denver billboard operations to another party. Both companies were leading competitors in the billboard advertising business in numerous areas across the country, but Denver was the only city in which both companies operated competitive billboard businesses.
United States v. Foodmaker, Inc. (8/13/96)
The Division filed a compliant charging Foodmaker, of San Diego, California, with violating the HartScott-Rodino premerger notification reporting requirements for acquiring all of the voting securities of Consul Restaurant Corporation without notifying federal antitrust authorities. Consul, which had operated 26 franchised ChiChiís restaurants, was acquired by ChiChiís, Inc., then a subsidiary of Foodmaker. Foodmaker was in violation of the law for a total of 471 days, from October 23, 1992 until February 5, 1994. Foodmaker agreed to pay a $1.45 million civil penalty to settle the charges. The final judgment was entered by the Court on August 20, 1996.
Ingersoll-Rand Company/Zimmerman International, Corp. (8/29/96)
In order to resolve the Divisionís competitive concerns with IngersollRandís acquisition of Zimmerman, a manufacturer of air balancers equipment primarily used to lift and move heavy objects on assembly lines, IngersollRand agreed to end its exclusive licensing agreement with another manufacturer, Knight Industries. The licensing agreement allowed Ingersoll-Rand to produce air balancers under its own brand name using Knightís technology. Eliminating the exclusive licensing agreement that allowed Knight to license others that wished to enter the industry ensured that competition was maintained in the manufacture and sale of air balancers.
United States, State of Texas, and Commonwealth of Pennsylvania v. USA
Waste Services, Inc. and Sanifill, Inc. (8/30/96)
The Division challenged the $1.5 billion proposed merger between USA Waste and Sanifill, two of the largest waste hauling and disposal companies in North America. The complaint alleged that the acquisition would substantially lessen competition in the markets for small containerized hauling and disposal in Houston, Texas, and small containerized hauling in Johnstown, Pennsylvania. A proposed final judgment, filed simultaneously with the complaint, settled the suit. The decree required certain divestitures and included other provisions, including requiring municipal solid waste landfill capacity in Houston and Johnstown to be made available to independent haulers for a ten-year period.
Westinghouse Air Brake Company/Vapor Corp. (8/30/96)
The Division announced that it would not oppose Westinghouse Air Brake Companyís acquisition of Vapor Corp., a subway car door system supplier, after Westinghouse Air Brake agreed to sell its 50 percent interest in Westcode, another subway car door system supplier. Because Vapor Corp. and Westcode were the only U. S. subway and rail car door suppliers, the spin-off of Westcode ensured that the rail car door systems market in the United States would remain competitive.
United States and State of Connecticut v. Oldcastle Northeast, Inc., CRH,
plc, Tilcon, Inc., and BTR, plc (9/3/96)
The Division challenged the $270 million deal between two companies that competed in the production of asphalt concrete, which is also known as blacktop and is used mainly for constructing or resurfacing roads, driveways, and parking lots. A proposed consent decree, filed simultaneously with the complaint, required Oldcastle to divest a quarry (East Granby, Connecticut) and two of the three asphalt plants located at the quarry. The transaction, as originally proposed, would have allowed Oldcastle Northeast to become the dominant asphalt concrete company in the greater Hartford area market with the power to increase prices.
Fairmont Tamper/Pandrol Jacksonís Tamper Business (9/10/96)
Fairmont Tamper, a subsidiary of Harsco Corporation, abandoned its plans to acquire Pandrol Jackson, formerly Jackson Jordan, after the Division expressed concerns that the acquisition would be anticompetitive and result in a high concentration in the automatic tamper market. Automatic tampers are maintenance-of-way-equipment used to realign a railroad track after the alignment is altered as a result of train traffic.
Archer Daniels Midland Co./Gruma S. A. de C. V. (9/13/96)
The Division and the Texas Attorney Generalís Office announced that they would
not oppose a $280 million deal between Americaís two largest tortilla flour
manufacturersóArcher Daniels Midland Co. (ADM) and Grumman S. Aóafter the companies
agreed to divest a masa flour mill in the Texas panhandle. ADM was acquiring
22 percent of Gruma stock and forming a partnership with Gruma to combine the
companiesí U. S. masa flour mill operations. Masa flour is produced by the milling
of cooked whole-kernel corn and is the primary ingredient in corn tortillas,
taco shells, and tortilla chips. As originally structured, ADM and Gruma would
have merged the six domestic masa flour mills of the two firms, creating a single
dominant firm. The sale of the Texas mill ensured that the masa flour market
in the United States remained competitive.
United States and the State of New York v. American Radio Systems Corp.,
The Lincoln Group L. P., and Great Lakes Wireless Talking Machine LLC (10/24/96)
The Division challenged the proposed acquisition of three Rochester, New York, radio stations by American Radio Systems (ARS) from The Lincoln Group L. P. and a joint sales agreement between ARS and Great Lakes Wireless Talking Machine. The complaint alleged the acquisition was likely to raise radio advertising prices. A proposed final judgment, filed simultaneously with the complaint, allowed ARS to acquire two Rochester radio stations from The Lincoln Group, provided it divested the WHAM-AM, WVOR-FM, and WCMFAM stations. The final judgment also required dissolution of the joint sales agreement, under which ARS had the sole right to sell all the advertising time of another station. This was the Divisionís first challenge ever to a radio joint sales agreement.
United States v. US West, Inc. and Continental Cablevision, Inc. (11/5/96)
The Division challenged the acquisition of Continental Cablevision, the third largest cable system operator in the nation, by US WEST, one of the seven Regional Bell Operating Companies. The complaint alleged that the partial acquisition would have resulted in a substantial lessening of competition in the market for dedicated telephone services, which include special access (dedicated lines linking high-volume business users with their chosen long-distance carriers) and local private line services (dedicated lines connecting multiple locations of an end-user within a given metropolitan area). At the same time, a proposed final judgment was filed that settled the case. As part of the proposed settlement, US WEST and the Boston-based Continental agreed to divest Continentalís interest in Teleport Communications by December 31, 1998. The final judgment also prohibited the parties from appointing members to or participating in meetings of Teleport Communicationsí Board of Directors. In each of the relevant cities (Denver, Phoenix, Seattle, and Omaha, Nebraska), US WEST was the dominant provider of dedicated services, and Teleport Communications was one of only a small number of firms challenging US WESTís dominance.
United States v. Westinghouse Electric Corp. and Infinity Broadcasting
The Division challenged the approximately $4.9 billion acquisition of Infinity
Broadcasting by Westinghouse Electric, a subsidiary of CBS, Inc. The complaint
alleged that the acquisition would have lessened competition substantially for
radio advertising in the Philadelphia, Pennsylvania, and Boston, Massachusetts,
markets, giving Westinghouse over 40 percent of the radio advertising revenues
in each city, and would have eliminated competition for radio advertisers trying
to reach particular demographic groups. A final judgment, filed simultaneously
with the complaint, settled the suit. The decree required the divestiture of
two radio stations: WMMR-FM in Philadelphia and WBOS-FM in Boston.
Andersen Area Medical Center/Greenville Hospital/Spartanburg Hospital (12/9/96)
Three northwestern South Carolina hospital systemsóAndersen Area Medical Center,
Greenville Hospital System and Spartanburg Hospital System (collectively AGS)óabandoned
plans to consolidate their operations after the Division expressed concerns
that the merged hospitals would be able to force managed care plans to exclude
other hospitals from their plans if they were to include any of the AGS hospitals
in their panels. If the merger had been consummated, the merging parties would
have had 60 to 70 percent of the areaís hospital beds.
StarKist Food, Inc./H. J. Heinz, Co./Bumble Bee Seafoods/Unicord Public
Company and Questor Partners (12/10/96)
Unicord abandoned its plans to sell its Bumble Bee brand tuna to Questor Partners
and to sell three Bumble Bee plants in Puerto Rico, Ecuador, and California
to StarKist after the Division noted its concerns to the parties. StarKist,
a subsidiary of H. J. Heinz Company, and Bumble Bee, were the number one and
two sellers of canned tuna respectively and major competitors in a highly concentrated
United Security Bank/First Bank and Trust (12/12/96)
After the Division expressed concerns that the merger between United Security Bank and First Bank and Trust would lessen competition for business banking services, the parties agreed to divest the Grove Hill, Clark County, Alabama branch, which alleviated Division concerns and preserved banking services. The merger, had it gone forward as originally structured, would have resulted in a monopoly in the town of Grove Hill.
United States and State of Colorado v. Vail Resorts, Inc., Ralston Resorts,
Inc., and Ralston Foods, Inc. (1/3/97)
The Division challenged Vail Resortsí $310 million acquisition of Ralston Resorts
and simultaneously filed a proposed final judgment requiring that Ralstonís
Arapahoe Basin Ski Resort be sold to a third party in order for the deal to
go forward. The complaint alleged that, without the proposed divestiture, the
merger would have lessened competition substantially in the Front Range skier
market, likely resulting in higher prices to skiers who live in Coloradoís Front
Range and ski at the resorts on day and overnight trips. The Front Range is
the area east of the Rocky Mountains including the Colorado cities of Denver,
Fort Collins, Boulder, and Colorado Springs. Vail Resorts owned the Vail, Beaver
Creek, and Arrowhead Mountain ski resorts, and Ralston Resorts owned the Breckenridge,
Keystone, and Arapahoe Basin ski resorts. The deal, as originally structured,
would have resulted in the merged firm having more that 38 percent of the Front
United States v. Signature Flight Support Corp. (2/5/97)
The Division challenged Signature Flight Supportís acquisition of International
Aviation Palm Beach, Inc., alleging that the transaction, as proposed, would
have reduced competition in the market for the provision of fixed base operation
services at Palm Beach International Airport. Fixed base operations are facilities
located at airports that provide flight support services, such as fueling and
ramp and hanger space rental to charter, private, and corporate aircraft operators.
The complaint alleged that the acquisition, as originally structured, would
likely have led to higher prices by creating a duopoly in the sale of jet fuel
to aviation customers using the Palm Beach Airport. A proposed final judgment,
filed simultaneously with the complaint, required Signature to divest certain
assets and leaseholds of its fixed base operations business at Palm Beach International
(Description of photograph: Silhouette of a jet against the clouds. The jet
is descending for a landing, with the end-of-runway lights in the foreground.)
United States v. Figgie International, Inc. and Harry E. Figgie, Jr. (2/13/97)
The Divisionís complaint alleged a violation of the premerger notification and waiting period requirements of the Hart-Scott-Rodino Act and sought civil penalty of $150,000. The complaint charged that Figgie International of Willoughby, Ohio, a manufacturer of industrial and consumer products and its founder, Harry E. Figgie, were in violation of the reporting requirements when Mr. Figgie acquired more than 15 percent of the voting securities of Figgie International. A proposed final judgment, filed simultaneously with the complaint, required each of the defendants to pay $75,000 in civil penalties. The final judgment was entered by the Court on February 14, 1997.
United States v. American Radio Systems Corp. and EZ Communications, Inc.
The Division challenged the $655 million acquisition of EZ Communications by
American Radio Systems (ARS). The complaint alleged that the acquisition would
have lessened compe tition substantially in the Sacramento, California radio
advertising market and would have given ARS control over six of the 12 class
B FM radio signalsóthe strongest and most competitively significant radio broadcasting
signalsóoperating in the area and would have given ARS 36 percent of Sacramentoís
radio advertising revenues. A proposed final judgment, filed simultaneously
with the complaint, required ARS to divest KSSJ-FM, a new age contemporary station
in the process of being upgraded to class B status.
United States v. EZ Communications, Inc. and Evergreen Media Corp. (2/27/97)
In a case related to the American Radio Systems case (see above) filed the same day, the Division challenged EZís acquisition of six radio stations in Charlotte, North Carolina, from Evergreen Media Corporation. The complaint alleged that the acquisition would have lessened competition substantially in the Charlotte, North Carolina, radio advertising market. This was one of a series of transactions involving ARS and EZ that, without restructuring, would have resulted in ARS having 55 percent of Charlotteís radio advertising revenues. A proposed final judgment, filed simultaneously with the complaint, required divestiture of the largest rock format station in Charlotte, WRFX-FM. Following consummation of the merger between ARS and EZ, ARS (as EZís successor) would become a party to the EZ/Evergreen action and would be required to fulfill EZís divestiture obligation.
Gulfstar Communications Inc./Demaree Media, Inc (3/6/97)
Gulfstar Communications abandoned its efforts to acquire three Arkansas radio stations from Demaree Media after the Division expressed concerns that the deal would lead to higher advertising prices in Northwest Arkansas. Acquisition of the Demaree stations, together with other acquisitions by Gulfstar, would have given Gulfstar more than 62 percent of the 1995 advertising revenues in the Northwest Arkansas radio market.
First Virginia Banks, Inc./Premier Bankshares Corp. (3/18/97)
The Division required First Virginia Banks and Premier Bankshares to sell three branch offices in southwestern Virginia before going forward with their proposal merger. The divestitures, designed to preserve competition for loans and other banking services provided to individuals and small businesses, resulted from a joint investigation by the Division and the Office of the Virginia Attorney General.
Pike Industries/Frank F. Whitcomb Construction Company (3/28/97)
Pike Industries, a New Hampshirebased aggregate and asphalt concrete company,
abandoned its efforts to acquire a quarry and two asphalt plants from a New
Hampshire highway construction company after the Division expressed concerns
that the deal would reduce competition and lead to higher prices for aggregate
and asphalt concrete in Vermont and New Hampshire. Aggregate is used in the
production of both asphalt concrete and ready-mix concrete. Asphalt concrete,
also known as blacktop, is used principally for constructing and resurfacing
roads, driveways, and parking lots.
(Description of photograph: A bulldozer loading sand from a large sand pile
that is twice as high as the bulldozer.)
United States and Commonwealth of Pennsylvania, State of New York, and
State of Ohio, v. Cargill, Inc., Akzo Nobel, N. V., Akzo Nobel, Inc.,
and Akzo Nobel Salt, Inc. (4/21/97)
The Division challenged the $160 million merger between two of the nationís
largest salt producers. The complaint alleged that the merger, as originally
structured, would have lessened competition substantially in the bulk deicing
salt market in the northeast interior of the country and in the foodgrade evaporated
salt market east of the Rocky Mountains. Deicing salt is medium or coarse grade
rock salt bought in bulk by state and municipal governments for use in melting
snow and ice on public roads. Cargill and Akzo were two of only four producers
of bulk deicing salt in the $100 million northeast interior market, an area
which includes Rochester, Syracuse, and Buffalo, New York; Erie, Pennsylvania;
and Burlington, Vermont. Food grade evaporated salt is a highly refined, extremely
pure salt (meeting Food and Drug Administration standards for human consumption)
that is added during food processing as a preservative and flavor-enhancing
ingredient for a variety of baked, frozen, and canned foods. Cargill and Akzo
were the second and third leading producers of food grade evaporated salt in
the $200 million market east of the Rocky Mountains. A proposed final judgment,
filed simultaneously with the complaint, required Cargill to sell several key
assets to American Salt Company, a prospective new entrant. The assets included
a stockpile of bulk deicing salt in Retsof, New York, a four-year salt supply
contract from the Cargill and Akzo mines, and numerous salt depots for storage
and transshipment of salt to customers. Cargill was also required to divest
Akzoís Watkins Glen, New York, plant to alleviate competitive effects in the
food-grade salt market.
Southern National Corp./United Carolina Bancshares (4/29/97)
Southern National and United Carolina Bancshares agreed to sell 20 North Carolina
bank branch offices with total deposits of about $488 million in order to address
Division concerns that the merger would have lessened compe tition for banking
services in 10 different geographic areas of North Carolina.
Northern States Power Company/Wisconsin Energy Company (5/16/97)
Northern States Power Company and Wisconsin Energy terminated their merger
agreement and abandoned their plans to consolidate after the Division stated
its concerns and the Federal Energy Regulatory Commission disapproved the merger
as proposed. The Division was concerned about possible anticompetitive effects
in Wisconsin resulting from Northernís control over a transmission line at the
MinneapolisWisconsin state border, which was an exclusive gateway into Wisconsin.
Absent the merger, Northern had the incentive to keep the transmission line
open and sell its cheaper power in Wisconsin, where it would compete with Wisconsin
Energy. With the merger, it would sell its cheap power elsewhere and use its
control over transmission to maintain Wisconsin Energyís market power and ability
to sell at high prices.
First Bank of Grants/Grants State Bank (5/27/97)
First Bank of Grants and Grants State Bank terminated their plans to merge after the Division expressed concerns about the transaction. The merger would have eliminated competition in Cibola County, New Mexico, for business banking services.
United States v. Martin Marietta Materials, Inc., CSR Limited, CSR America,
Inc., and American Aggregates, Inc. (5/27/97)
The Division challenged the $234.5 million acquisition of American Aggregates
Corporation by Martin Marietta Materials, Inc. American Aggregates was a subsidiary
of CSR America, a Georgia-based company owned by CSR Limited of Australia.
The complaint alleged that the acquisition, as originally structured, would
have allowed Martin Marietta to become the dominant supplier of aggregate in
Marion County, Indiana, with the power to increase prices. Aggregate is used
to manufacture asphalt concrete and ready-mix concrete, which are used to build
roads and highways. The Indiana Department of Transportation, through its highway
contracts, was the largest purchaser of aggregate in Marion County. A proposed
final judgment, filed simultaneously with the complaint, required Martin Marietta
to divest American Aggregatesí Harding Street Quarry in Indianapolis.
Lamar Advertising Co./Hedrick Outdoor, Inc. (6/2/97)
The Division announced that it would not oppose Lamar Advertisingís acquisition of Hedrick Outdoor on condition that Lamar divest 170 billboards located in four metropolitan areas in Mississippi, Louisiana, and Florida. Without the divestitures, Lamar would have controlled more than 50 percent of the available billboards in each of the communities involved and would have had more than 70 percent of the billboards along the most heavily traveled highways in the area.
United States v. Long Island Jewish Medical Center and North Shore Health
System, Inc. (6/11/97)
The Division sued to block the combination of two flagship hospitals on Long
Island: North Shore Health System and Long Island Jewish Medical Center (LIJMC).
The complaint alleged that North Shoreís flagship hospital, North Shore Manhasset,
and LIJMC were each otherís principal competitor by virtue of their premier
reputations, comparable full range of services, and strategic location. They
competed headto-head to be the ďflagshipĒ or ďanchorĒ hospital in the networks
of hospitals assembled by managed care plans on Long Island to be able to offer
a choice of health care options to area employers, families, and individuals
throughout Nassau and Queens Counties. The Division contended that if the proposed
transaction were permitted to go through, North Shore and LIJMC would cease
to compete for the business of managed care plans, and managed care plans would
have only a single entity to negotiate with, eliminating the bargaining that
has benefitted consumers of health care services. The district court denied
the governmentís request for a permanent injunction and entered judgment in
favor of the defendants (983 F. Supp. 121 (E. D. N. Y. 1997)).
AlliedSignal Truck Brake Systems Co./Midland Brake, Inc. (6/13/97)
AlliedSignal Truck Brake Systems Co., a subsidiary of AlliedSignal, abandoned its proposed acquisition of the assets of Midland Brake, Inc., a subsidiary of Echlin, Inc., after the Division expressed concerns that the deal, as originally structured, would have eliminated competition in brake components for trucks, trailers, and other types of vehicles, possibly resulting in higher prices for consumers.
United States v. Mahle GmbH, Mahle, Inc., Mabeg E. V. Metal Leve, S. A.,
and Metal Leve, Inc. (6/19/97)
The Division filed a complaint against Mahle GmbH, a German piston manufacturer,
and Metal Leve, S. A., a Brazilian competitor, that alleged a violation of the
premerger notification and waiting period requirements of the Hart-Scott-Rodino
Act and sought a civil penalty of $5.6 million. The complaint charged the parties
with failing to notify federal officials of Mahleís proposed acquisition of
a controlling interest in Metal Leve. Mahle acquired 50.1 percent of the voting
securities of Metal Leve for about $40 million on June 26, 1996, without notifying
the Federal Trade Commission and the Department of Justice. The parties were
in violation of the Act from June 26, 1996 through at least March 20, 1997.
Defendant Mahle GmbH and Metal Levee each agreed to pay a penalty of $2,801,000
for a total of $5,602,000. A proposed final judgment, filed simultaneously with
the complaint, settled the suit. The consent decree was entered by the Court
on June 24, 1997. The civil penalty was paid on July 23, 1997.
Waste Management of Ohio/USA Waste Services, Inc. (6/30/97)
USA Waste Services abandoned its efforts to acquire the WMX operations of Waste Management of Ohio after the Division expressed concerns about the decrease in competition in the solid waste hauling business in the Allentown, Pennsylvania market.
GKN, plc/Weasler Holdings, Inc. (6/30/97)
GKN, plc abandoned its plan to acquire the $48 million Weasler Holdings Inc,
whose only asset was 100 percent of the stock of Weasler Engineering, Inc.,
from Code, Hennessy & Simmons after the Division expressed its concerns that
the transaction would likely raise prices for consumers of the driveline systems
for agricultural implements. Weasler manufactured driveline systems (also referred
to as power takeoff driveshafts) and related components for agricultural implements.
GKN and its subsidiaries, operating under the name of Walterscheid, was one
of the worldís leading manufacturers of driveline systems for a broad range
of vehicles. GKN manufactured agricultural driveline systems that competed in
the North American market with Weasler. Weasler was the North American market
leader in the highly engineered agricultural driveline market while GKN had
the second largest market share.
United States v. Raytheon Company and Texas Instruments (7/2/97)
The Division challenged the proposed $2.9 billion acquisition of Texas Instrumentsí
Defense System and Electronics Unit by Raytheon Company. The acquisition, as
originally structured, would have resulted in higher prices paid by the Department
of Defenseó and ultimately by the taxpayersó for advanced military radars used
in major weapons systems. The Division simultaneously filed a proposed final
judgment requiring Raytheon to sell Texas Instrumentsí monolithic microwave
integrated chips (MMICs) business, which produced a key component for radar
systems, in order for the deal to go forward. MMICs extend the power and range
of radars, enabling them to scan airspace quickly and efficiently, with a lower
probability of detection by enemies. The complaint alleged that Raytheon and
Texas Instruments competed aggressively to develop leading edge high power amplifiers
and that their research and development efforts had positioned them as the only
firms able to supply competitive MMICs for future Defense Department radar programs.
The required divestiture, at that time the largest since the post Cold War effort
to consolidate the defense industry began, ensured that there would be a viable
competitor to Raytheon in a position to provide the MMICs necessary for the
next generation of Defense Department radar systems.
British Telecom/MCI Communications Corp. (7/7/97)
The Division moved, in the U. S. District Court for the District of Columbia,
to modify and extend the 1994 settlement involving British Telecom and MCI to
ensure that British Telecomís then-proposed acquisition to obtain 100 percent
of MCI would not disadvantage competitors and raise prices for consumers. The
1994 consent decree had settled Division allegations that British Telecomís
acquisition of an initial 20 percent interest in MCI would have violated the
antitrust laws. The original 1994 settlement contained provisions designed to
prevent British Telecom from using its market power in the United Kingdom to
discriminate in favor of MCI or in favor of a British Telecom/MCI joint venture
at the expense of others competing in the market for international telecommunications
services between the United States and the United Kingdom and around the world.
The proposed modified final judgment retained and, in some cases, strengthened
those protections to take into account the full integration of British Telecom
and MCI, as well as changed market conditions. Specifically, it required the
newly formed company to increase the amount of information reported to the Division
to facilitate the detection of specific instances of discrimination, and to
enable the Division to monitor whether BT is engaged in discrimination. MCI
was ultimately acquired by WorldCom, Inc., not British Telecom, and British
Telecom sold its 20 percent interest.
(Description of photograph: Three satellite dishes pointed in different directions.)
Jacor Communications/Village Communications (7/11/97)
The Division did not oppose Jacor Communicationsí acquisition of radio stations from Village Communications in the Lexington-Fayette, Kentucky, market after Jacor agreed to divest its WXZZ-FM station to Regent Communications. The deal, as originally structured, would have resulted in the merged entity controlling 52 percent of the radio advertising market.
United States and State of Texas v. Allied Waste Industries, Inc. and USA
Waste Services (7/14/97)
The Division challenged a proposed Texas landfill acquisition involving Allied
Waste and USA Waste Services, two of the largest waste hauling and disposal
companies in North America. The complaint alleged that the acquisition would
have lessened competition substantially in the Tarrant County area of Texas
(where Fort Worth is located) by concentrating the landfill capacity in that
area into the hands of only three companies, resulting in higher prices for
waste disposal and hauling. A proposed final judgment, filed simultaneously
with the complaint, required the divestiture of more than 1.4 million cubic
yards of landfill space over a five-to ten-year period at the two landfills
in the Tarrant County area Allied would own after the acquisition. Additional
divestiture of landfill space would be required if Allied expanded its capacity
at USA Wasteís Crow Landfill or developed a new landfill nearby. In addition,
the decree required the acceptance of waste at Alliedís two Tarrant County area
landfills from haulers not affiliated with Allied on nonprice terms and conditions
identical to those provided Allied.
Outdoor Systems, Inc./3M (8/15/97)
The Division did not oppose Outdoor Systemsí acquisition of 3Mís subsidiary, National Advertising Company, after Outdoor Systems agreed to sell billboards in 10 metropolitan areas. Without the divestiture, the transaction would have given Outdoor Systems market shares above 50 percent in many markets and limited advertisers to only one remaining billboard provider as an alternative to the merged company.
United States and Commonwealth of Pennsylvania v. USA Waste Services, Inc.,
United Waste Systems, Inc., and Riviera Acquisition Corp. (8/22/97)
The Division challenged the acquisition of United Waste Systems by USA Waste Services, two of the nationís largest waste hauling companies. The complaint alleged that the acquisition would lessen competition substantially for municipal solid waste disposal and hauling services in Allegheny County, Pennsylvania, by giving USA Waste control over about 60 percent of the disposal services offered to haulers of municipal solid waste generated there. This would have resulted in higher prices for municipal solid waste disposal and hauling services in that area. Municipal solid waste includes residential and commercial trash and garbage. A proposed final judgment, filed simultaneously with the complaint, required the divestiture of a Pittsburgh-area landfill owned by a subsidiary of United Waste.
Tyco International Ltd./Keystone International (8/22/97)
The Division did not oppose Tyco Internationalís acquisition of Keystone International
after Keystone agreed to sell its waterworks butterfly valve assets and business
to a third party. Butterfly valves are used in waterworks applications, such
as waste-water treatment. Without the spin-off, the transaction would have
significantly increased concentration among producers of these valves and would
have left only two providers of such valves in sizes below 24 inches. The divestiture
was designed to ensure that municipalities, the largest consumers of butterfly
valves for waterworks, would continue to have viable choices for this essential
waterworks construction component.
United States v. Mid-America Dairymen, Inc., Southern Foods Group LP and
Milk Products LLC (9/3/97)
The Division challenged the acquisition of Borden/Meadows Gold Dairies Holdings,
Inc. by Mid-America Dairymen, the largest dairy cooperative in the United States.
The complaint alleged that the acquisition would have lessened competition substantially
for the sale of milk to public schools throughout eastern Texas and Louisiana.
Throughout much of Texas and Louisiana, Southern Foods Group LP, in which Mid-
America had a partial ownership interest, and Borden were the only two bidders
for school milk contracts. A proposed final judgment, filed simultaneously with
the complaint, settled the suit. The decree required divestiture of nine plants:
five in Texas, three in Louisiana, and one in New Mexico. A newly formed firm,
Milk Products LLC, would be allowed to buy the divested dairies under certain
conditions set out in the decree. The transaction, as originally proposed, would
have had MidAmerica finance most of the purchase price to be paid by Milk Products,
but the complaint alleged that this would have left Mid-America with the ability
to influence the operations of Milk Products. The decree placed limits on the
terms and duration of Mid-America loans to Milk Products and placed strict
limits on Mid-Americaís access to information about Milk Products.
United States v. Raytheon Company, General Motors Corp., and HE Holdings,
The Division challenged Raytheonís $5.1 billion acquisition of General Motorsí Hughes Aircraft subsidiary. The complaint alleged that the acquisition would have lessened competition substantially in infrared sensors used in both ground and aviation weapons systems, and in electro-optical systems for ground vehicles. A proposed final judgment, filed simultaneously with the complaint, required divestiture of two defense electronics businesses in order to preserve competition in sophisticated technology for U. S. weapons systems. The divestiture was, at the time, the largest divestiture since the end of the Cold War.
Wachovia Corp./Central Fidelity Banks, Inc. (10/17/97)
The Division did not oppose Wachovia Corporationís and Central Fidelity Banksí
merger after Wachovia agreed to divest nine branches, with total deposits of
about $218 million, in order to resolve the Divisionís concerns that the merger
would lessen competition for banking services in certain areas of Virginia.
The agreement resulted from a joint investigation conducted by the Division
and the Office of the Virginia Attorney General.
(Description of photograph: View of several city high-rise buildings, taken
from below the buildings looking toward the sky.)
Connoisseur Communications/Lincoln Group L. P. (10/23/97)
The Division did not oppose Connoisseur Communicationsí $13.5 million acquisition of two Youngstown, Ohio, radio stations from the Lincoln Group after Connoisseur sold two other Youngstown area radio stations. Connoisseur sold the stations after the Division and the Ohio Attorney General expressed concerns that the acquisition of Lincolnís stations would lessen competition in the Youngstown radio advertising market. Without the divestiture, Connoisseurís acquisition of stations from Lincoln would have given Connoisseur 55 percent of the radio advertising revenues in Youngstown.
United States v. Chancellor Media Corp. and SFX Broadcasting, Inc. (11/6/97)
The Division challenged Chancellorís acquisition of four Long Island, New York,
radio stations, alleging that the acquisition would result in local businessesí
owned by SFX Broadcasting paying higher radio advertising prices. Chancellor
and SFX were the two largest radio groups on Long Island, and the merger would
have created a dominant Long Island radio group with more than 65 percent of
the market. The suit, which was the first contested court challenge to a radio
station merger since passage of the Telecommunications Act of 1996, was resolved
when Chancellor agreed to enter into a final judgment requiring it to abandon
its plan to acquire SFXís Long Island stations. The judgment also required Chancellor
and SFX to terminate a local marketing agreement under which Chancellor had
been operating SFXís Long Island radio stations in anticipation of the acquisition.
American Information Systems/Business Records Corp. (11/19/97)
The Division did not oppose the merger between American Information Systems and Business Records Corp., two voting machine manufacturers, after Business Records agreed to sell its optical scan vote tabulation business to a third party. The deal, as originally structured, raised significant antitrust concerns that consumers of the optical scan vote tabulation equipment (state and local governments that run elections) would likely suffer anticompetitive price increases and decreased services. American Information Systems and Business Records were two of only three manufacturers of optical scan vote tabulation equipment in the U. S. Attorneys General from eight states participated in the investigation.
NationsBank Corp./Barnett Banks (12/9/97)
The Division did not oppose the proposed merger of NationsBank with Barnett Banks after NationsBank divested approximately 124 branch offices, with total assets of approximately $4.1 billion, in 15 areas of Florida. At the time, this divestiture was the largest bank divestiture in a single state and the second largest bank divestiture. The Divisionís investigation was conducted jointly with the Florida Attorney Generalís Office.
United States v. Aluminum Company of America and Reynolds Metals Company
The Division challenged Alcoaís acquisition of Reynoldsí aluminum rolling mill and other related assets in Muscle Shoals, Alabama. As part of the acquisition, Alcoa planned to close the Reynolds facility. The complaint alleged that the acquisition would have resulted in higher prices for aluminum used to produce cans and higher prices to consumers who purchase canned beverages. Alcoa and Reynolds were, respectively, the largest and third largest makers of aluminum can stock in the United States. The two firms together had more than 60 percent of U. S. aluminum can stock capacity in a business that had only two other major players. On December 30, 1997, Alcoa abandoned the transaction.
General Electric Corp./Stewart & Stevenson Services, Inc. (12/30/97)
The Division did not oppose General Electricís proposed $600 million purchase
of Stewart & Stevenson Servicesí Gas Turbine Division after GE agreed to license
a newly formed joint venture, TransCanada Turbines, to perform maintenance and
overhauls of certain GE-manufactured marine and industrial equipment. Stewart
& Stevenson was GEís largest competitor worldwide in the provision of maintenance
and overhaul services and was the only North American company licensed to service
certain GE engines.
Perkin-Elmer Corp./PerSeptive BioSystems, Inc. (1/15/98)
The Division did not oppose PerkinElmerís $360 million purchase of PerSeptive BioSystems after PerkinElmer agreed to sell the entire bundle of PerSeptiveís DNA synthesis patent rights to NeXstar Pharmaceuticals, Inc. The divestiture, which would enable NeXstar to make the instruments and chemicals used in the synthesis of DNA molecules, resolved concerns that the acquisition would stifle competition for these products. Perkin-Elmer and PerSeptive were the only two companies that held patents necessary for production of certain DNA molecules, which are used in the research and development of certain medical treatments.
Capstar Broadcasting Partners/Patterson Broadcasting (1/29/98)
The Division did not oppose Capstarís acquisition of Patterson Broadcasting
after Capstar agreed to sell the two Allentown, Pennsylvania, radio stations
acquired in the transaction. The transaction, as originally structured, would
have increased concentration and lessened competition for radio advertising
in Allentown, Pennsylvania.
KPMG Peat Marwick/Ernst & Young (2/13/98)
KPMG Peat Marwick and Ernst & Young, two of the big six accounting firms, abandoned their plans to merge after the Division expressed concerns that the merger would have adversely affected competition by reducing the already limited number of firms providing auditing services to Fortune 1000 companies.
United States v. Pacific Enterprises and Enova Corp. (3/3/98)
The Division challenged the proposed $6 billion merger of Pacific Enterprises,
a California natural gas utility, and Enova Corporation, a California electric
utility company. This was the Divisionís first challenge to a merger between
a gas and electric utility. The complaint alleged that, as a result of the merger
of Pacificís natural gas pipeline with Enovaís electric power business, the
combined company would have had both the incentive and the ability to lessen
competition in the market for electricity in California and that the merger
likely would have resulted in consumers in California paying higher prices for
electricity. The complaint further stated that, in early 1998, the California
electric market experienced significant changes as a result of legislatively
mandated restructuring. In this new competitive electric market, gasfired plants,
which were the most costly generating plants to operate, set the price that
all sellers received for electricity in California in peak demand periods. Thus,
if a firm could increase the cost of gas-fired plants by raising fuel prices,
it could raise the price charged by all sellers of electricity and increase
the profits of owners of lower cost sources of electricity. In this way, the
acquisition of Enovaís low-cost electric generating plants gave Pacific a means
to benefit from any increase in electric prices. A proposed final judgment,
filed simultaneously with the complaint, required Enova to sell its two largest
low-cost electric power plants in order to complete its merger with Pacific.
Haynes Holdings, Inc./Inco Alloys International (3/3/98)
The Division announced that Blackstone Capital Partners II Merchant Banking Fund, L. P. and Haynes Holdings abandoned their attempt to purchase Inco Alloys International, the alloys division of Inco Limited, after the Division announced its intention to challenge the proposed acquisition. The Division said that the acquisition would likely have resulted in higher prices to consumers purchasing certain highperformance nickel-based alloy products. High-performance nickel-based alloys are sold in various forms and designed to be used in high temperature and highly corrosive environments, such as in the aerospace, chemical processing, land-based gas turbine, and oil and gas industries.
Peoples Heritage Financial Group, Inc./CFX Corp. (3/9/98)
The Division did not oppose Peoples Heritageís purchase of CFX after the parties
agreed to divest three branch offices in New Hampshire. The agreement resolved
Division concerns that the merger would lessen competition for business banking
services in New Hampshire.
Reed Elsevier Business Information/Wolters Kluwer NV (3/9/98)
Reed Elsevier and Wolters Kluwer abandoned their $7.8 billion merger, which would have combined Reed Elsevier, a worldwide publisher of scientific and business information, with Wolters, a leading publisher participating in such segments as business, medical, and legal publishing, after the Division and the European Union expressed concerns about the merger. The Division was concerned that the merger would have likely resulted in higher prices for consumers for certain publications, such as scientific, technical, and medical publications. The Division and the European Union conducted independent investigations of the proposed transactions, but there was significant cooperation between the agencies.
Andrew Taitz/Harley Davidson (3/20/98)
Union City Body Company abandoned plans to acquire the assets of Utilmaster, a division of Holiday Rambler, LLC (a subsidiary of Harley Davidson), after the Division expressed concerns that the deal would likely result in higher prices for consumers. Union City and Utilmaster were direct competitors in the market for walk-in van assembly and had combined sales of about 67 percent of the walk-in van market. There was only one other competitor.
United States v. Lockheed Martin Corp. and Northrop Grumman Corp. (3/23/
The Division challenged the proposed acquisition of Northrop Grumman by Lockheed
Martin, an $11.6 billion merger that was the single largest ever challenged
by a federal antitrust agency. The complaint alleged that the merger would have
resulted in unprecedented vertical and horizontal concentration in the defense
industry, which would substantially lessened, and in several cases eliminated,
competition in major product markets critical to the national defense. The merger
would have resulted in Lockheed Martinís obtaining a monopoly position in airborne
early warning radar, electrooptical missile warning systems, directed infrared
countermeasures systems, the SQQ-89 antisubmarine warfare combat system, and
fiber-optic towed decoys, which would likely have led to higher costs, higher
prices, and less innovation for systems required by the U. S. military. In addition,
the merger would have reduced competition in the sale of advanced tactical and
strategic aircraft, airborne early warning radar systems, sonar systems, and
several types of countermeasure systems that are designed to alert aircraft
pilots to threats and to help them respond to those threats. On July 16, 1998,
the parties abandoned the transaction.
(Description of photograph: Silhouette of a military jet with landing gear
United States v. Lehman Brothers Holdings, Inc. and L-3 Communica-tions
Holdings, Inc. (3/27/98)
The Division challenged L-3 Communicationsí (L-3) proposed acquisition of
Allied Signalís Ocean Systems Business and Allied Signal ELAC Nautik GmbH (Ocean
Systems) and simultaneously filed a proposed final judgment requiring L-3 to
put into place procedures to ensure Ocean Systemsí independence as a competitor
for a future submarine detector known as a towed sonar array. Ocean Systems
and Lockheed Martin Corporation (Lockheed Martin) were the leading providers
of submarine detectors used on U. S. Navy surface combat vessels and submarines.
Lockheed Martin owned 34 percent of the common stock of L-3 and controlled
three of 10 seats on L-3ís Board of Directors. The complaint alleged that the
proposed acquisition would have lessened competition substantially because there
was a strong likelihood that competitively sensitive information concerning
L-3ís design, production, and bid plans for towed arrays would be shared with
United States v. Loewen Group, Inc. and Loewen Group International, Inc.
The Division filed a complaint against Loewen Group and Loewen Group International
alleging a violation of the premerger reporting requirements of the Hart-Scott-
Rodino Act. The violation was a result of Loewen Groupís $16 million acquisition
of the voting securities of Prime Succession Inc., an Indiana-based owner and
operator of funeral homes and cemeteries, before notifying the nationís two
federal antitrust agencies. A proposed final judgment, filed simultaneously
with the complaint, settled the suit, and on May 14, 1998, the defendants paid
a civil penalty totaling $500,000. The final judgment was entered by the Court
on April 15, 1998.
United States v. CBS Corp. and American Radio Systems Corp. (3/31/98)
The Division challenged the $1.6 billion acquisition of American Radio Systems by CBS. The complaint alleged that the acquisition would likely have resulted in higher radio advertising prices in Boston, Massachusetts; St. Louis, Missouri; and Baltimore, Maryland. The acquisition would have resulted in CBS having 59 percent of Bostonís radio advertising revenues, 49 percent in St. Louis, and 46 percent in Baltimore. A proposed final judgment, filed simultaneously with the complaint, required CBS to divest seven radio stations: four in Boston (WEEI-AM, WAAF-FM, WEGQ-FM, and WRKOAM), two in St. Louis (KSD-FM and KLOU-FM), and one in Baltimore (WOCT-FM). The divestiture reduced CBSís share of radio advertising revenues in each of the three cities to less than 40 percent.
United States v. Hicks, Muse, Tate & Furst, Inc., Capstar Broadcasting
Partners, Inc., and SFX Broadcasting, Inc. (3/31/98)
The Division challenged the $2.1 billion acquisition of SFX Broadcasting by Capstar Broadcasting Partners, Inc. The complaint alleged that the acquisition would likely have resulted in higher radio advertising prices in Greenville, South Carolina; Houston, Texas; Pittsburgh, Pennsylvania; Jackson, Mississippi; and Suffolk County, New York. The acquisition would have resulted in Capstar and its related entities (Hicks, Muse, Tate & Furst Inc. and Chancellor Media Corporation) having 74 percent of radio advertising revenues in Greenville, 43 percent in Houston, 44 percent in Pittsburgh, 57 percent in Jackson, and 65 percent in Suffolk County, New York. A proposed final judgment, filed simultaneously with the complaint, required Capstar to divest 11 radio stations: four in Greenville (WESC-FM and AM, WJMZ-FM, and WTPT-FM), one in Houston (KKPNFM), one in Pittsburgh (WTAE-AM), one in Jackson (WJDX-FM), and four SFX stations in Long Island, New York (WBLI-FM, WBAB-FM, WHFM-FM, and WGBB-AM).
Clear Channel Communications, Inc./Universal Outdoor Holdings, Inc. (4/1/
The Division did not oppose Clear Channel Communicationsí $1.1 billion acquisition
of Universal Outdoor Holdings after Clear Channel agreed to resolve the Divisionís
competitive concerns by selling billboard assets in three markets: Milwaukee,
Wisconsin; Orlando, Florida; and Pinellas County, Florida. The deal, as originally
structured, would have reduced competition in billboard advertising in these
three markets. The transaction would have left Milwaukee with only one significant
billboard provider, and in the two Florida markets, consumers would have lost
a significant competitor.
Sungard Data Systems, Inc./Rolfe & Nolan, plc (4/3/98)
Sungard abandoned its $120 million plan to purchase Rolfe & Nolan after the Division expressed concerns about the transaction. Sungard and Rolfe were the only two providers of clearing and settlement software for use by banks, trading firms, and exchanges. The merger would have given the combined firm a monopoly in the clearing and settlement software market.
First Union Corp./CoreStates Financial Corp. (4/10/98)
The Division did not oppose the $16.6 billion merger of First Union with CoreStates Financial after an agreement was reached to divest 32 branch offices in Pennsylvania. The divestitures ensured that consumers would continue to receive the most competitive loan rates and the best banking services in those markets. The 32 CoreState branches required to be divested were located in Philadelphia, Delaware, and Montgomery Counties and Lehigh Valley, and had total deposits of approximately $1.1 billion. The Divisionís investigation was conducted jointly with the Pennsylvania Attorney Generalís Office.
United States, State of New York, and State of Illinois v. Sony Corp. of
America, LTM Holdings Inc. d/b/a Loews Theatres Cineplex Odeon Corp., and J.
E. Seagram (4/16/98)
The Division challenged the proposed merger between Loews Theatres, a subsidiary of Sony Corp., and Cineplex Odeon Corp. The complaint alleged that the merger of these two movie theater chains would lessen competition substantially in the Manhattan and metro-Chicago markets, leading to higher ticket prices and reduced theater quality for first-run movies. The merged firm would have had market shares, by revenues, of 67 percent in Manhattan and 77 percent in Chicago. A proposed consent decree, filed simultaneously with the complaint, required the divestiture of 14 theaters in Manhattan and 11 theaters in Chicago. In both Manhattan and Chicago, the divestitures represented slightly more than the leading firm would have acquired in terms of both number of screens and revenues.
Banc One Corp./First Commerce Corp. (5/4/98)
The Division did not oppose Banc Oneís $3.1 billion merger with First Commerce after the banks agreed to resolve the Divisionís antitrust concerns by selling off 25 branch offices in Louisiana. The Division stated that, with the divestiture of those branches, with total deposits of $614 million, small and medium-sized business consumers would continue to receive competitive loan rates and banking services.
United States v. Primestar, Inc., TeleCommunications, Inc., TCI Satellite
Entertainment, Inc., Time Warner Entertainment Company, L. P., MediaOne Group,
Comcast Corp., Cox Communications, Inc., GE American Communications, Inc., Newhouse
Broadcasting Corp., The News Corp. Limited, MCI Communications Corp., and Keith
Rupert Murdoch (5/12/98)
The Division challenged Primestarís acquisition of the direct broadcast satellite
(DBS) assets of News Corp. Limited and MCI, alleging that it would allow five
of the largest cable companies in the United States, which controlled Primestar,
to protect their monopolies and keep out new competitors. The complaint alleged
that the proposed $1.1 billion acquisition would lessen competition substantially
and enhance monopoly power in multichannel video programming distribution, which
includes cable, DBS, and a few other types of video programming distribution,
denying consumers the benefits of competition, including lower prices, higher
quality, greater choice, and increased innovation. The proposed transaction
called for News Corp./MCI to transfer authorization to operate 28 satellite
transponders at the 110 west longitude orbital slot and two highpower DBS satellites
under construction to Primestar. The 110 slot was one of three that could be
used to provide high-power DBS service, which customers could receive using
dishes as small as 18 inches in diameter, to the entire continental United States,
and was the last position available for use or expansion by independent DBS
firms. The complaint alleged that the transaction would prevent an independent
firm from using the assets to compete directly and vigorously with the Primestar
ownersí cable systems and would eliminate the cable companiesí most significant
potential competitor, News Corp. ís ASkyB satellite venture. On October 14,
1998, Primestar abandoned its acquisition of News Corp. ís and MCIís DBS assets.
Star Bank, N. A./Bank One, N. A./Bank One Wheeling-Steubenville (5/15/98)
The Division did not oppose Star Bank N. A. ís acquisition of 53 Ohio branches of Bank One subsidiaries in Ohio (48 branches of Bank One, N. A., Columbus, Ohio, and five Ohio branches of Bank One WheelingSteubenville, N. A., Wheeling, West Virginia) after the parties agreed to restructure the proposed acquisition to alleviate Division concerns regarding Star Bankís acquisition of four branches in Scioto County: Portsmouth, Portsmouth Auto-Bank, Wheelersburg, and Lucasville. Star Bank agreed to amend its application to exclude these four branches, thereby preserving competition for retail and small business lending in these markets.
Sinclair Broadcast Group, Inc./Heritage Media Corp. and Phase II Broadcasting
The Division did not oppose Sinclairís acquisition of five radio stations in New Orleans from Heritage Media and Phase II after Sinclair agreed to sell three stations to Centennial Broadcasting LLC. The acquisition of the five stations would have given Sinclair control of nine radio stations in New Orleans, accounting for about 55 percent of the radio advertising revenues.
Capstar Acquisition Company Inc./KRNA, Inc. (6/8/98)
The Division did not oppose Capstarís acquisition of a Cedar Rapids, Iowa radio station from KRNA, Inc. after Capstar terminated a contract to acquire an additional Cedar Rapids area radio station from KRNA. Had Capstar acquired both radio stations, it would have had five of the 12 radio stations in the Cedar Rapids radio market and approximately 49 percent of the radio advertising revenues in that market.
Bangor Savings Bank/Fleet Bank of Maine (6/10/98)
The Division did not oppose Bangorís acquisition of several branches from Fleet Bank of Maine after Bangor Savings Bank amended the transaction to remove three branches, with total deposits of $36 million, located within the Guilford market. The transaction, as originally structured, would have had a significantly adverse effect on competition in the market for business banking services in Guilford, Maine.
Thermo Environmental Instruments, Inc./Smiths Industries, plc (6/11/98)
The Division did not oppose Thermo Environmentalís acquisition of Smiths Industries,
plcís Graseby, plc product-monitoring and environmentalmonitoring groups after
the acquisition was restructured. Under the restructured merger, Thermo Environmental
agreed not to acquire Graseby Specac Limited, which manufactured accessories
essential to test various substances in a spectrom eter. A spectrometer is a
device that determines the chemical composition of substances. Graseby Specac
remained part of Smiths Industries, plc. Graseby Specac and Thermo Environmentalís
SpectraTech were the only full-line manufacturers of sample holding accessories
for use with spectrometers. Thus the transaction, as originally structured,
would have combined the number one and the number two worldwide manufacturers
of spectrometer accessories respectively. The restructured deal would maintain
competition and would provide low prices and effective services for these accessories,
helping to ensure the purity and quality of many goods.
United States v. Aluminum Company of America and Alumax, Inc. (6/15/98)
The Division challenged the proposed $3.8 billion acquisition of Alumax by Alcoa. The complaint alleged that the acquisition likely would have resulted in higher prices for customers of aluminum cast plate. Alcoa and Alumax were the two largest producers of aluminum cast plate and together controlled approximately 90 percent of the worldwide market for cast plate. Cast plate is a flat aluminum product that resists warping and is used in machinery that makes products for packaging frozen foods and aircraft and automotive parts. A proposed final judgment, filed simultaneously with the complaint, required Alcoa to sell its cast plate operations, including its Vernon, California, plant that makes cast plate, to a firm that would continue to manufacture and sell cast plate.
National City Corp./First of America Bank Corp. (6/30/98)
The Division did not oppose the acquisition by National City Corporation of First of America Bank Corporation after First America agreed to divest two branch offices in the Anderson, Indiana, banking market (with total deposits of $31.9 million). Without this divestiture, the acquisition would have likely resulted in higher loan prices for business banking services in the Anderson, Indiana, banking market.
Capstar Broadcasting Partners/Paxson Communications (6/30/98)
Capstar Broadcasting Partners abandoned its acquisition of WYCL-FM from Paxson Communications in response to Division concerns that the acquisition would have resulted in increased radio advertising prices for consumers in the Pensacola, Florida, radio market. At the time of the proposed acquisition, Capstar operated two stations in the Pensacola, Florida market: WMEZ-FM and WXBM-FM.
American Airlines/Aerolineas Argentinas (7/8/98)
The Division did not oppose American Airlinesí proposed acquisition of about
8.5 percent of Aerolineas Argentinas, Argentinaís major airline, after American
agreed to restructure the acquisition. American and Aerolineas, along with United
Airlines, were the only carriers serving the United StatesArgentina market,
including the New York-Buenos Aires and Miami-Buenos Aires routes. Entry and
expansion on these routes was limited by a restrictive bilateral aviation treaty
between Argentina and the United States. Under the restructured transaction,
American would have no representatives on the Aerolineas Board of Directors
and would relinquish its right to vote its shares to influence competitive decisions
United States v. General Electric Company and InnoServ Technologies, Inc.
The Division challenged the acquisition of InnoServ by General Electric Company
(GE). The complaint alleged that the acquisition would lessen competition substantially
in the markets for servicing certain models of GE medical imaging equipment
and in local areas throughout the United States for multivendor service, in
which some hospitals contract with a single provider to service most or all
of a hospitalís equipment. GE was the worldís largest manufacturer of medical
imaging equipment and a leading provider of service for all types and brands
of medical equipment, and InnoServís PREVU software was one of a very few programs
available to service some models of imaging equipment. A proposed final judgment,
filed simultaneously with the complaint, required GE to sell InnoServís PREVU
software to a third party.
WorldCom, Inc./MCI Communications Corp. (7/15/98)
The Division did not oppose WorldComís $44 billion purchase of MCI after MCI
agreed to divest its Internet business. MCI agreed to sell internetMCI to Cable
& Wireless, plc for an estimated $1.75 billion, making it the largest divestiture
of a company at that date in merger history. Without that divestiture, the WorldCom/MCI
merger would have combined the two leading providers of nationwide Internet
backbone service, a service that connects various high-capacity computer networks
carrying Internet traffic. The merger, as originally proposed, would have given
WorldCom/MCI a significant proportion of the nationís Internet traffic, giving
the company the ability to cut off or reduce the quality of Internet services
that it provided to its rivals, and harming customers using the services of
those rivals. Customers of backbone services include Internet service providers
and private and public institutions and corporations. The Division and the European
Union conducted independent investigations of the proposed transactions, but
there was a high degree of cooperation between the agencies. Attorneys General
from ten states also participated in the investigation.
(Description of photograph: Close-up of a laptop, cell phone, and pager on
United States and States of Ohio, Arizona, California, Colorado, Florida,
Commonwealth of Kentucky, States of Maryland, Michigan, New York, Commonwealth
of Penn-sylvania, States of Texas, Washington, and Wisconsin v. USA Waste Services,
Inc., Dome Merger Subsidiary, and Waste Management, Inc. (7/16/ 98)
The Division and 13 states challenged the $13.5 billion acquisition of Waste Management, Inc. (WMI) by USA Waste Services, Inc. (USA Waste). WMI and USA Waste were two of the nationís largest waste collection and disposal companies. The complaint alleged that the acquisition would lessen competition substantially for waste collection and disposal services in 21 geographic areas across the United States. A proposed final judgment, filed simultaneously with the complaint, required USA Waste to divest waste collection and/or disposal operations in 13 states, covering 21 metropolitan areas: Tucson, Arizona; Los Angeles, California; Denver, Colorado; Gainesville and Miami, Florida; Louisville, Kentucky; Baltimore, Maryland; Detroit, Flint, and Northeast, Michigan; New York, New York; Akron, Cleveland, Canton and Columbus, Ohio; Portland, Oregon; Allentown, Philadelphia, and Pittsburgh, Pennsylvania; Houston, Texas; and Milwaukee, Wisconsin.
Specialty Teleconstructors, Inc./Stainless, Inc. (7/17/98)
Specialty Teleconstructors abandoned its proposed acquisition of 100 percent
of the stock of Stainless and certain related assets of Stainless Enterprises
of Pennsylvania, Inc., through its 33 percent ownership of Kline Iron & Steel
Company, after the Division expressed concerns about the anticompetitive effects
of the transaction in the market for the construction of towers for television
broadcasting, which require tremendous expertise. Stainless was a key competitor
of Kline in the highly concentrated market of tall television broadcast tower
United States v. Citicorp, Inc., Citicorp Services, Inc., GTECH Holdings
Corp., and Transactive Corp. (7/27/98)
The Division challenged the acquisition of the electronic benefit transfer
(EBT) system business of Transactive Corporation (Transactive), a subsidiary
of GTECH Holdings Corporation, by Citicorp Services, Inc. (Citicorp), a subsidiary
of Citicorp, Inc. The complaint alleged that the acquisition would lessen competition
substantially in the provision of EBT services to state and local governments.
EBT services are used by state and local agencies to provide food stamps and
cash benefits to Americans who qualify for welfare payments. Federal law requires
all states to use EBT systems to deliver food stamp benefits by the year 2002.
In the challenged transaction, Citicorp would have acquired from Transactive
the contracts to deliver EBT services to the states of Texas, Illinois, and
Indiana and Sacramento County in California, as well as certain computer hardware
and software used to provide processing services in these states. In addition
to the acquisition of these contracts, there was also a noncompete provision
in the agreement that would have prevented Transactive from competing with Citicorp
for new EBT contracts or from licensing its processing system to an other vendor
for use in delivering EBT systems. The complaint alleged that the acquisition
would have eliminated competition for EBT contracts, resulting in higher prices
and lower quality services for state and local agencies and lower quality services
for recipients of welfare benefits. On January 29, 1999, the parties abandoned
Capstar Broadcasting Partners/Big Chief Broadcasting Company (7/27/98)
As a result of Division concerns, Capstar Broadcasting abandoned its proposed acquisition of KTCS-FM and KTCS-AM radio stations from Big Chief Broadcasting Company. If the transaction had been consummated as planned, Capstar would have controlled approximately 62 percent of the Ft. Smith, Arkansas, radio market and would have owned four of the 12 Class stations licensed in the market.
Cape Fear Broadcasting/Sea Communications (8/10/98)
Cape Fear Broadcasting and Sea Communications abandoned their proposed merger
plan after the Division expressed concerns that the merger would have anticompetitive
effects in the Wilmington, North Carolina, market for radio advertising. Cape
Fear Broadcasting, at the time of the proposed merger, owned WMNX-FM, WGNIFM,
and WSFM-FM, and those stations controlled about 39 percent of the advertising
revenues in the market. Sea Communications owned WMNX-FM, which controlled
about 27 percent of the advertising revenues. The combined entity would have
controlled approximately 66 percent of the radio advertising revenues and controlled
four of the nine Class stations licensed.
Jacor Communications, Inc./Nationwide Communications, Inc. (8/10/98)
The Division did not oppose Jacor Communicationsí $620 million acquisition of Nationwide Communications after Jacor agreed to sell eight radio stations: two in San Diego, California; one in Cleveland, Ohio; and five in Columbus, Ohio. Without the divestitures, the acquisition would have significantly reduced competition in those cities. If the deal were approved as originally proposed, Jacor would have had control of 12 stations in San Diego, accounting for 42 percent of radio advertising revenues. In Cleveland, Jacor would have owned six radio stations with 43 percent of radio advertising revenues. In Columbus, with nine radio stations, Jacor would have had 58 percent of radio advertising revenues. The Division and the Ohio Attorney Generalís Office conducted a joint investigation.
Dean Foods Company/Barber Dairies, Inc. (8/11/98)
The Division did not oppose the acquisition of Barber Dairies, Inc. by Dean Foods Company after the parties agreed to sell a Barber Dairies plant in Huntsville, Alabama, to Southern Foods Group, L. P. The deal, as initially structured, could have lessened competition in bidding to supply milk to school districts in at least 18 counties in Alabama.
NationsBank Corp./BankAmerica Corp. (8/14/98)
The Division did not oppose NationsBankís proposed merger with BankAmerica after NationsBank agreed to sell off 17 branch offices with total deposits of approximately $491.6 million located in New Mexico (15 branch offices in Albuquerque, one in Clovis, and one in McKinley) in order to resolve the Divisionís concerns that the merger would lessen competition for loans to small and medium-sized businesses. The Divisionís investigation was conducted jointly with the offices of the New Mexico and Texas Attorney General.
Capstar Broadcasting Partners/KATQ Radio, Inc. (9/2/98)
Capstar Broadcasting abandoned its acquisition of KATQ Radio after the Division expressed concerns that the acquisition would have reduced competition and increased prices in the Texarkana, Arkansas-Texas, radio advertising market. By purchasing KATQ Radio, Capstar would have acquired two radio stations that competed with Capstar stations in that market and would have had a 62 percent share of advertising revenues.
Banc One Corp./First Chicago NBD Corp. (9/8/98)
The Division did not oppose the $29 billion merger of Banc One with First Chicago
after the banks agreed to divest 39 branch offices in Indiana with total deposits
of approximately $1.47 billion. In addition, the banks offered to sell certain
middle-market commercial loan operations in Indiana and associated middle market
commercial loans. The divestiture ensured that small and medium-sized business
consumers would continue to have the benefits of competition. The Divisionís
investigation was conducted jointly with the Indiana Attorney Generalís Office.
West Virginia Radio Corp./Fantasia Broadcasting (9/16/98)
West Virginia Radio Corporation abandoned its proposed acquisition of one Morgantown, West Virginia, radio station, WFGM-FM, from Fantasia Broadcasting after the Division expressed concerns that the transaction would have resulted in higher prices for consumers in the Morgantown, West Virginia, radio advertising market.
Meredith Corp./First Media Television, L. P. (9/16/98)
The Division did not oppose Meredith Corporationís acquisition of First Media Television after the parties agreed to restructure the transaction. The transaction, as originally structured, would have resulted in anticompetitive effects in the television advertising market in Orlando, Florida, by combining the partiesí competing television stations. The parties agreed to restructure the transaction by divesting one of the Orlando area television stations.
Talleyrand Broadcasting, Inc./Citadel Broadcasting Company (9/24/98)
Talleyrand Broadcasting abandoned its efforts to purchase radio stations from Citadel Broadcasting, after the Division expressed concerns that the acquisition likely would have resulted in a loss of competition in the State College, Pennsylvania, radio advertising market, where both companies owned radio stations. If the deal had gone forward, Talleyrand would have controlled approximately 46 percent of the radio advertising revenues in the State College market.
United States v. Halliburton Company and Dresser Industries, Inc. (9/29/98)
The Division challenged the proposed merger of Halliburton and Dresser. The
complaint alleged that the merger would result in increased prices and decreased
quality for logging-while-drilling (LWD) tools and services for oil and natural
gas drilling projects, as well as decreased competition in the development and
improvement of LWD tools. LWD services provide information to oil and gas companies
about the formations through which the companies are drilling, whether there
is oil in the formation, and the ease with which oil can be extracted. A proposed
final judgment, filed simultaneously with the complaint, required Halliburton
to divest its entire LWD business, including its manufacturing, research and
development, and sales and service capabilities. Separately, Halliburton also
agreed to sell its 36 percent interest in M-I Drilling to Smith International,
Inc. Without that divestiture, Halliburton would have acquired one of its principal
competitors, Dresserís Baroid Division. M-I and Baroid were the two largest
drilling fluids competitors in a $3 billion industry. Halliburton sold this
interest on August 31, 1998. Drilling fluids, which are a combination of chemical
compounds and minerals, are the second largest cost of drilling for oil and
natural gas after rental of the rig. They are critical for cooling and lubricating
the drill bit and controlling downhole pressure. The decree was entered by the
Court on February 22, 1999.
Lamar Advertising Company/Outdoor Communications, Inc. (10/2/98)
The Division did not oppose Lamar Advertisingís $148.2 million acquisition
of Outdoor Communications after the parties agreed to divest billboard assets
in six counties in Alabama, Mississippi, and Tennessee. The deal, as originally
structured, would have resulted in Lamar controlling approximately 50 percent
or more of the available billboards in these markets. The divestitures ensured
that competition would remain in the billboard market, protecting small business
customers who rely on billboard advertising as a cost-effective way to promote
U. S. Bancorp/Northwest Bancshares, Inc. (10/9/98)
The Division did not oppose the merger of U. S. Bancorp and Northwest Bancshares after U. S. Bancorp agreed to divest a bank branch in Clark County, Washington. The Division stated that the deal, as originally proposed, would have lessened competition for banking services in Clark County. The divestiture ensured that local customers would continue to have competitively priced banking services.
Norwest Corp./Wells Fargo & Company (10/13/98)
The Division did not oppose the $34 billion merger of Norwest Corporation with Wells Fargo & Company after the banks agreed to sell 26 bank branch offices in Arizona and Nevada with deposits totaling approximately $1.18 billion. The divestiture was designed to ensure that local customers, particularly small businesses, had access to competitively priced banking services.
United States v. Northwest Airlines Corp. and Continental Airlines, Inc.
The Division filed suit to block Northwest Airlines from buying a controlling
stake in Continental Airlines. Northwest and Continental are the fourth and
fifth largest U. S. airlines respectively and compete to provide air transportation
services on thousands of routes across the country. The proposed acquisition
would allow Northwest to acquire voting control over Continental, as well as
to share in Continentalís profits, diminishing substantially both Northwestís
and Continentalís incentives to compete against each other. The complaint alleged
that Northwest and Continental are each otherís most significant competitoróif
not the only competitorófor nonstop airline service between the cities where
they operate hubs. According to the complaint, Northwest plans to acquire stock
representing 14 percent of Continentalís equity but carrying 51 percent of its
voting rights. Although a related agreement with Continental required Northwest
to place its stock in a ďvoting trustĒ for six years, the complaint alleged
that the voting trust would not prevent the competitive harm likely to result
from the acquisition. Northwest has gone ahead with its acquisition, and litigation
is pending in U. S. District Court in Detroit, Michigan. Trial is scheduled
to commence September 19, 2000.
United States v. Chancellor Media Corp. and Kunz & Company (11/12/98)
The Division challenged Chancellor Mediaís $39.5 million acquisition of Kunz
& Company. Chancellor and Kunz were head-to-head competitors in the business
of selling outdoor advertising, such as billboard space, to business customers.
The complaint alleged that the acquisition would substantially lessen competition
for outdoor advertising in Kern, Kings, and Inyo Counties, California, and Mojave
County, Arizona, giving Chancellor a virtual monopoly in some areas and more
than 60 percent of the market in others. A proposed final judgment was filed
simultaneously with the complaint that required Chancellor to divest outdoor
advertising assets valued at more than $5 million in those four counties.
United States and States of New York and Florida and Commonwealth of Pennsylvania
v. Waste Management, Inc., Ocho Acquisition, Corp., and Eastern Environmental
Services, Inc. (11/17/98)
The Division, joined by three states, sued to block the nationís largest waste collection and disposal firm, Waste Management, from acquiring a large regional rival, Eastern Environmental Services. The complaint alleged that the $1.2 billion merger would reduce competition on a multibillion dollar contract to dispose of New York Cityís residential solid waste and would also reduce competition for other solid waste collection and disposal services in New York, Pennsylvania, and Florida. A proposed final judgment that would settle the suit was filed December 31, 1998. It required the companies to divest waste collection and/or disposal operations in nine markets in those three states. In addition, Eastern was required to sell its pending proposal to be awarded part of a $6 billion contract to dispose of New York Cityís residential waste.
United States v. Pearson, plc, Pearson, Inc., and Viacom International,
The Division challenged Pearsonís $4.6 billion acquisition of educational, professional, and reference publishing businesses from Viacom. The complaint alleged that the acquisition would have lessened competition, and a proposed final judgment, filed simultaneously with the complaint, required Pearson to sell off an elementary school science textbook program and textbooks used in 32 college courses. Pearson and Viacom were two of only four publishers of major comprehensive elementary school science programs (which include textbooks and related materials and services) and two of only a few publishers of textbooks and educational materials for over 30 college courses.
United States v. Chancellor Media Corp., Whiteco Industries, Inc., and
Metro Management Associates (11/25/98)
The Division challenged Chancellor Mediaís $930 million acquisition of Whiteco Industries. Chancellor and Whiteco were head-to-head competitors in the business of selling outdoor advertising, such as billboard space. The complaint alleged that the acquisition would have reduced competition in seven counties located in Kansas, Pennsylvania, Connecticut, and Texas. The combined entity would have had a monopoly in Hartford County, Connecticut, and market shares ranging between 48 percent to 88 percent in the remaining markets. A proposed final judgment was filed that required divestiture of billboard assets in those seven counties.
City Holding Company/Horizon Bancorp, Inc. (11/30/98)
The Division did not oppose City Holding Companyís acquisition of Horizon Bancorp after the parties agreed to divest two branch offices in West Virginia with deposits totaling approximately $94.8 million. Without the divestitures, the deal would have reduced competition for consumers of business banking services in Greenbrier County and Hinton, West Virginia.
Monsanto Company/DeKalb Genetics Corp. (11/30/98)
The Division did not oppose Monsantoís $2.3 billion acquisition of DeKalb Genetics
after Monsanto agreed to modify the deal. The Divisionís concerns focused on
maintaining competition in biotechnology developments in corn. Monsanto agreed
to spin off its claims to a recently developed technology used to introduce
new genetic traits into corn seed (agrobacterium-mediated transformation technology)
to the University of California at Berkeley. Monsanto also entered into binding
commitments to license its Holdenís corn germplasm, the type of genetic material
that is used by biotech companies to introduce new transgenic traits in corn
to breed the hybrid seed that farmers plant. Transgenic corn is corn that has
been genetically altered so that it has certain traits, such as insect resistance
or herbicide tolerance.
(Description of photograph: Rows of leaf lettuce in a large field.)
United States v. AT& T Corp. and TeleCommunications, Inc. (12/30/98)
The Division challenged the $48 billion merger between AT& T and TCI and simultaneously
filed a proposed final judgment that would settle the suit. The decree required
complete divestiture of TCIís interests in Sprint PCS over a five-year period.
AT& T was the largest provider of mobile wireless telephone services in the
United States, and TCI owned approximately 23.5 percent of the stock of Sprintís
mobile wireless telephone business, Sprint PCS. Both AT& T and Sprint operated
wireless networks that offered nearly complete nationwide geographic coverage.
Under the terms of the settlement, the parties were required to transfer the
Sprint PCS stock to an independent trustee before closing their merger. The
trustee would then have approximately five years to complete the sale. The settlement
was structured to minimize any risk that the divestiture of Sprint PCS stock
would harm competition by interfering with Sprintís ability to issue new stock
or otherwise raise capital in order to continue to construct its wireless network.
Southeast Missouri Hospital/St. Francis Memorial Hospital (1/8/99)
Southeast Missouri and St. Francis Memorial abandoned their proposed merger after the Division expressed concerns that the merger could have inhibited the development of costeffective health care in the southeast Missouri region. Southeast and St. Francis are the only two hospitals in Cape Girardeau, Missouri, which is the largest city south of St. Louis, Missouri. Had the merger gone forward, patients would have lost their only nearby choice of hospitals for routine services.
Formica Corp./International Paper Company (1/15/99)
The Division announced that it would challenge the proposed acquisition by
Formica Corp. of the decorative high-pressure laminate (HPL) business of International
Paper Company because the transaction would result in higher prices for HPL.
HPL is used to make durable and impact-resistant decorative surfacing products,
such as kitchen and bath countertops, eating surfaces, doors, lavatory dividers,
desktops, and work surfaces. The Division said that the proposed acquisition
would remove a key competitor from the approximately $1 billion HPL market in
the United States and would substantially increase the opportunity for the two
dominant players to coordinate their prices. The risk of this coordinated interaction
was especially pronounced where the competitors had timely access to pricing
announcements and other competitively sensitive information. On January 19,
1999, the transaction was abandoned.
Capstar Broadcasting Company/Radio of Vero, Inc. (1/19/99)
As a result of Division concerns, Capstar abandoned its proposed acquisition of WPAW-FM from Radio of Vero, Inc. At the time of the proposed acquisition, Capstar owned five radio stations in Vero Beach. Those stations controlled almost 60 percent of the advertising revenues in the market. Had the acquisition gone forward, Capstar would have controlled about 64 percent of the advertising revenues and controlled six of the eight C licensed stations, which would likely have resulted in higher prices for radio advertising.
Capstar Broadcasting Company/Powell Broadcasting (1/25/99)
Capstar abandoned its proposed acquisition of KTBT-FM from Powell Broadcasting because of concerns expressed by the Division about the merger and its effect on the Baton Rouge, Louisiana, radio market. At the time of the proposed acquisition, Capstar owned WYNK-A/F, WLSS-FM, KRVE-FM, WJBO-AM, and WBIU-AM in Baton Rouge. These stations represented 49 percent of the advertising revenues in the market. Powell owned KTBT-FM, which controlled about 1 percent of the market. Post-merger, Capstar would have controlled about half of the radio advertising revenues in Baton Rouge.
Media One Group-Erie, Ltd./Rambaldo Communications, Inc. (1/27/99)
Media One Group-Erie abandoned its efforts to purchase two Erie, Pennsylvania, radio stations from Rambaldo Communications after the Division expressed concerns that the acquisition likely would have resulted in higher prices to businesses in the Erie radio advertising market.
United States v. Signature Flight Support Corp., AMR Combs, Inc., and AMR
The Division challenged Signature Flight Support Corp. ís proposed acquisition of AMR Combs, Inc., and simultaneously filed a proposed final judgment that would settle the suit. The decree required Signature to sell flight support businesses at Palm Springs, Bradley International (Hartford, CT) and Denver Centennial Airports. Signature and Combs were head-to-head competitors in the business of providing flight support services, such as fueling, ramp, and hangar space rentals, at Palm Springs and Bradley International Airports. At Denver Centennial Airport, Signature had agreed to become the operator of a flight support facility, which upon completion in the year 2000 would have put it in direct competition with Combs.
United States v. Central Parking Corp. and Allright Holdings, Inc. (3/16/
The Division challenged the $585 million merger between Central Parking and
Allright Holdings and simultaneously filed a proposed final judgment that required
the companies to sell or terminate their interests in certain offstreet parking
facilities in 18 cities in 10 states. Central and Allright were the two largest
parking management companies in the United States. Without the divestitures
required under the decree, Central would have been given a dominant market share
of off-street parking facilities in certain areas of each of the 18 cities
and would have had the ability to control the prices and the type of services
offered to motorists. The State Attorney General Offices of Maryland, Ohio,
Illinois, Texas, Tennessee, and Minnesota assisted in the investigation.
United States v. Suiza Foods Corp. and Broughton Foods Company (3/18/99)
The Division filed suit to block Suiza Foodsí acquisition of Broughton Foods
because the transaction would result in higher prices for milk sold to school
districts in Kentucky. Suiza and Broughton were head-to-head competitors for
school milk contracts in dozens of school districts in south central Kentucky.
According to the complaint, in more than 20 of those districts, the merger would
have created a monopoly on bids to supply milk, and in at least 30 other districts,
it would have reduced the number of bidders from three to two. The Division
noted that the merger was set to occur in an industry that had been plagued
by a history of collusion, with the Division having prosecuted more than 100
criminal cases involving bid rigging on school milk contracts including Kentucky.
The complaint stated that the proposed merger could recreate the anticompetitive
effects of a prior bid-rigging conspiracy. The Division soughtó and the defendants
agreed not to opposeó entry of a temporary restraining order to prevent the
companies from closing the deal until resolution of a preliminary injunction
motion. Thereafter, a proposed final judgment was filed on April 28, 1999, requiring
the divestiture of Southern Bell Dairy.
United States v. SBC Communications, Inc. and Ameritech Corp. (3/23/99)
The Division challenged SBCís $62 billion acquisition of Ameritech Corporation and Comcast Cellular Corporation. The acquisitions, as originally proposed, would have led to a loss of head-to-head competition in wireless mobile telephone service in 17 markets in Illinois, Indiana, and Missouri. A proposed final judgment, filed simultaneously with the complaint, required Ameritech to divest its cellular telephone systems in St. Louis and other markets in Missouri, as well as its cellular telephone systems in three markets in Illinois where it competed with Comcast.
Reilly Industries, Inc./AlliedSignal, Inc. (3/29/99)
The Division did not oppose Reilly Industriesí $44 million acquisition of AlliedSignalís
pitch and coal tar refining business after the parties agreed to restructure
the transaction to resolve the Divisionís antitrust concerns. Reilly and AlliedSignal
were two of the four significant producers of binder pitch sold to U. S. consumers.
Binder pitch is an essential raw material in the manufacture of carbon anodes
used for aluminum production and carbon graphite electrodes used in steel production.
The deal, as originally structured, would have reduced competition in the binder
pitch market and would have likely lead to a price increase in aluminum and
graphite products. The parties restructured the deal by: (1) precluding Reilly
from implementing a planned strategic alliance with competitor VfT, which would
have tied up additional binder pitch supplies to be sold in the United States;
(2) limiting Reillyís contractual rights to use AlliedSignalís Ironton, Ohio
pitch melter so that this melting capacity would be available to other binder
pitch competitors; and (3) continuing to investigate the proposed tolling agreement
entered into by Reilly and competitor Koppers to insure that the impact of the
tolling agreement was procompetitive.
United States v. Blackstone Capital Partners II Merchant Banking Fund L.
P. and Howard Andrew Lipson (3/30/99)
The Division filed a complaint against Blackstone Capital Partners II Merchant Banking Fund L. P. for a violation of Hart-Scott-Rodino premerger notification requirements. The violation was a result of its failure to produce a key document before undertaking its acquisition of more than $15 million in voting securities from Prime Succession, Inc., an owner and operator of funeral homes and cemeteries. Under the proposed final judgment, filed simultaneously with the complaint, the defendants agreed to pay a civil penalty. Blackstone paid $2,785,000 and Howard Andrew Lipson paid a $50,000 penalty. The final judgment was entered by the Court on March 31, 1999.
United States and States of Illinois and Missouri v. Allied Waste Industries,
Inc. and Browning Ferris Industries, Inc. (4/8/99)
The Division challenged the $210 million acquisition of Allied Waste Industries from Browning Ferris Industries (BFI) of certain assets, including nine hauling companies, three transfer stations, and one landfill. According to the complaint, the proposed acquisition would substantially lessen competition for commercial solid waste hauling services in the St. Louis market. Allied and Browning-Ferris were two of only three major competitors providing small container commercial hauling services in the St. Louis market, which included the City of St. Louis and St. Louis County in Missouri and the Illinois counties of St. Clair, Madison, and Monroe. Commercial waste hauling is the collection and transportation to a disposal site of trash and garbage stored in small metal containers or dumpsters, generally by specialized front-end load trucks, from such establishments as office and apartment buildings and retail businesses, such as stores and restaurants. A final judgment, filed simultaneously with the complaint, required Allied and BFI to divest certain waste collection routes in the St. Louis metropolitan area.
United States v. Input/Output, Inc. and The Laitram Corp. (4/12/99)
The Division filed a complaint against Input/Output and The Laitram Corp.
alleging a violation of Hart-ScottRodino premerger notification requirements.
The violation was a result of the partiesí failure to observe the required antitrust
premerger waiting period before consummating the acquisition. The complaint
alleged that Input/Output obtained beneficial ownership of DigiCOURSE, a Laitram
subsidiary, when it took operational control of DigiCOURSE when under contract
to acquire the company. A proposed final judgment, filed simultaneously with
the complaint, settled the suit. Input/Output and Laitram each agreed to pay
a civil penalty of $225,000 for a total of $450,000. The final judgment was
entered on May 13, 1999.
United States v. Interstate Bakeries Corp. and Continental Baking Company
The Division filed a civil petition in U. S. District Court in Chicago, Illinois,
to find Interstate Bakeries in civil contempt for violating a 1996 judgement
of the Court, entered on January 9, 1996, in United States v. Interstate Bakeries
Corp., et al., (7/20/95). That civil suit was filed to block the merger of
Interstate Bakeries Corp. (IBC) and Continental Baking. At that time, IBC and
Continental were two of the three largest producers of white pan bread. Pursuant
to the 1996 final judgment, IBC licensed its Weberís label to Four-S Baking
Company for production and sale of Weberís brand bread in the Southern California
area. On March 29, 1999, Four-S was purchased by Bimbo Bakeries USA, Inc.,
which became the sole stockholder of Four-S. The final judgment required IBC
to grant ďa perpetual, royalty-free, assignable, transferable, exclusive licenseĒ
to use the Weberís label. Despite the clear language of the order, IBC had demanded
that Four-S return the formulas and production processes for the baking of
Weberís bread. The petition stated that the IBCís actions were in civil contempt
of the final judgment. A civil contempt is a sanction to enforce compliance
with an order of the court, and a court may order a fine to coerce a defendant
into compliance with the courtís order. The Division requested that the Court
find IBC in contempt and fine IBC for each day it was in violation of the order
to comply. After defendants withdrew their letter to Bimbo and agreed to authorize
assignment of know-how rights, the Division withdrew its contempt motion.
General Dynamics/Newport News Shipyard (4/14/99)
General Dynamics abandoned its $2 billion proposed acquisition of Newport News Shipyard after the Division expressed concerns about the transaction. At the time of the proposed acquisition, General Dynamics already owned three of the six shipyards that built new vessels for the U. S. Navy, including one for building submarines and one for nuclear vessels. If it had acquired Newport News Shipyard, it would have controlled four of the six yards doing Navy construction, including the only two yards that construct submarines and the only two yards capable of building nuclear vessels. The Division coordinated its investigation with the Department of Defense.
United States v. Capstar Broadcasting Corp. and Triathlon Broadcasting
The Division challenged Capstarís $190 million acquisition of Triathlon Broadcasting
Company. At the time of the proposed acquisition, Capstar owned about 309 stations
in 76 markets. Triathlon owned 31 radio stations in six markets. In order for
the acquisition to go forward, Capstar was required to sell five radio stations
in Wichita, Kansas. A proposed final judgment, filed simultaneously with the
complaint, required Capstar to sell five radio stations: KEYN-FM, KWSJ-FM,
KNSS-AM, KFH-AM, and KQAM-AM. The transaction, as originally structured,
would have allowed Capstar to control more than 45 percent of the Wichita radio
advertising market and would likely have allowed it to raise prices for advertising
on radio stations in the Wichita metropolitan area.
Clear Channel Communication, Inc./Jacor Communications (4/22/99)
The Division did not oppose Clear Channelís $3.8 billion acquisition of Jacor after both parties agreed to sell 18 radio stations in four cities: Cleveland, Ohio; Dayton, Ohio; Louisville, Kentucky; and Tampa, Florida. Without the divestitures, the acquisition would have significantly reduced competition in those cities in the radio advertising market.
United States v. Imetal, DBK Minerals, Inc., English China Clays, plc,
and English China Clays, Inc. (4/26/99)
The Division challenged Imetal SAís $1.24 billion acquisition of English China
Clays, plc. The complaint alleged that the acquisition, as originally structured,
would have substantially lessened competition in four markets: waterwashed kaolin,
calcine kaolin, ground calcium carbonate, and fused silica. Imetal and English
China Clays were two of only five producers of waterwashed kaolin and calcined
kaolin and were the dominant producers of fused silica in the United States.
Water-washed kaolin is a type of clay used as a pigment for coating paper and
as a filler in the body of paper. Calcined kaolin is used in paper-making when
the paper requires a greater opacity. Ground calcium carbonate (GCC) is a mineral
used as a pigment in paper-making. Fused silica is used in such applications
as investment castings, high-grade glass, and refractory applications, such
as the preparation of ceramics. A proposed final judgment, filed simultaneously
with the complaint, required that Imetal divest assets and operations in each
of the four product areas.
United States v. Citadel Communications Corp., Triathlon Broadcasting Company,
and Capstar Broadcasting Corp. (4/28/99)
The Division challenged the proposed acquisition by Capstar Broadcasting Corporation
of Triathlon, including radio broadcast stations in Colorado Springs and Spokane,
Washington. The complaint also sought to terminate a Joint Sales Agreement between
Citadel Communications Corporation and Triathlon Broadcasting Company that eliminated
competition in the sale of radio advertising on certain radio stations in Colorado
Springs and Spokane. A proposed final judgment, filed simultaneously with the
complaint, required the termination of the joint sales agreement, and in the
Colorado market, Capstar was to transfer KSPZ-FM, KVOR-AM, and KTWK-AM to
Citadel, while Citadel agreed to transfer KKLI-FM to Capstar. In Spokane, Capstar
agreed to transfer KEYF-FM and KEYF-AM to Citadel, and Citadel entered into
an agreement with a third party to acquire KNJY-FM.
United States v. Bell Atlantic Corp. and GTE Corp. (5/7/99)
The Divisionís complaint challenged Bell Atlanticís merger with GTE and alleged that the merger, as originally structured, would have led to a loss of head-to-head competition in wireless mobile telephone services in 65 markets in nine states. A proposed final judgment, filed simultaneously with the complaint, settled the suit. Under the decree, the parties agreed to sell one of their two interests in overlapping wireless telephone systems. At the time, this was one of the largest divestiture packages involving a merger ever required by the Division and the second largest telecommunications merger in history.
Fox Paine Capital Fund L. P./Century Telephone (5/7/99)
Fox Paine restructured its proposed acquisition of the cellular operations
of Century Telephone in Fairbanks, Alaska, in order to resolve concerns expressed
by the Division that the acquisition, as originally planned, would have resulted
in a loss of head-to-head competition in mobile wireless telephone services
in Fairbanks. As a result of Fox Paineís restructuring, Fox was able to go forward
with its acquisition of ATU Communications Inc. and the local telephone assets
of the Municipality of Anchorage. Under the restructured agreement, Century
Telephone continued to own and operate the Fairbanks cellular system as it had
prior to entering into the PTI deal with Fox.
Chittenden Corp./Vermont Financial Services Corp. (5/12/99)
The Division did not oppose the merger of Chittenden Corporation with Vermont
Financial Services Corp. after the parties agreed to divest 17 branch offices
and one ATM in Vermont with deposits totaling about $480 million. The divested
branch offices were located in eight Vermont banking markets: Barre-Montpelier,
Bennington, Brattleboro, Burlington-St Albans, Middlebury, Rutland, Springfield,
and Vergennes. With these divestitures, local customers and small businesses
were assured of having competitively priced banking services.
(Description of photograph: A man sitting on one side of the desk reaching
over and shaking hands with another man on the opposite side of the desk. Sitting
beside the second man is a woman. On the desk is a contract with a pen.)
United States v. Computer Associates International, Inc. and Platinum Technology
International, Inc. (5/25/99)
This complaint challenged the acquisition of Platinum Technology International
by Computer Associates International and alleged that the proposed transaction,
as originally structured, would have reduced competition in five mainframe systems
management product markets. Computer Associates was the dominant competitor
in the job accounting products software business. Platinum was a major competitor
in mainframe systems management products and had been one of the few substantial
competitors to Computer Associates in a number of markets. A proposed final
judgment, filed simultaneously with the complaint, settled the suit. Under the
decree, Computer Associates was required to sell six Platinum mainframe systems
management software products and related assets.
United States v. Florida Rock Industries, Inc., Harper Bros., Inc., Commercial
Testing, Inc., and Daniel R. Harper, Inc. (5/26/99)
The Division filed a complaint that challenged Florida Rock Industries $60 million merger with Harper Bros. and Commercial Testing and alleged that the acquisition would substantially lessen competition in the aggregate and silica sand markets in southwest Florida. Aggregate is used to manufacture asphalt concrete and ready mix concrete. Silica sand is used to manufacture specific types of ready mix concrete. A proposed final judgment, filed simultaneously with the complaint, settled the suit. Under the terms of the decree, Florida Rock was required to divest the Alico Road Quarry in Fort Myers, Florida, and the Palmdale Sand Mine in Palmdale, Florida.
Lamar Advertising Company/Vivid, Inc. (5/28/99)
The Division did not oppose Lamar Advertising Companyís $22.5 million acquisition
of Vivid after the parties agreed to restructure the deal. As originally structured,
Vivid would have sold to Lamar all of its billboard operations throughout Wisconsin,
Indiana, and Illinois, which would have led to a loss of competition between
Vivid and Lamar for the sale of outdoor advertising in the two counties and
fewer choices for local businesses in connection with their billboard advertising
requirements. Under the modified agreement, Vivid would retained certain billboards
in Walworth County, Wisconsin, and Winnebago County, Illinois.
Chancellor Media Corp./Petry Media Corp. (6/9/99)
Chancellor Media abandoned its proposed acquisition of Petry Media, a television representative firm, after the Division expressed concerns that the transaction would have decreased competition in the television representative market, which would have affected advertisers and owners of radio or television stations in the form of higher commissions paid to representative firms. Television representative firms act on behalf of client television or radio stations by selling time on those stations to advertisers located outside a stationís local geographic area.
Capstar Broadcasting Partners/James L. Gibbons (6/14/99)
Capstar Broadcasting Partners terminated its proposed acquisition of two radio stations, WPVR-FM and WFIR-AM, from James L. Gibbons in the Roanoke-Lynchburg, Virginia, radio market after the Division expressed concerns that the transaction would have reduced competition and raised prices for radio advertising. Had the merger occurred, Capstar would have operated nine of the top eleven stations in this market and controlled almost 64 percent of advertising revenues.
United States and the State of Texas v. Aetna, Inc. and The Prudential
Insurance Company of America (6/21/99)
The Division challenged the $1 billion proposed acquisition of The Prudential
Insurance Company of Americaís health care business by Aetna. The complaint
alleged that the proposed transaction would have made Aetna the dominant provider
of health maintenance organization (HMO) and HMObased point-of-service (POS)
plans in Houston and Dallas-Fort Worth, Texas. The transaction, as originally
structured, would have also resulted in increased prices or reduced quality
of those health care plans. HMO plans generally compete in local areas on the
basis of the breadth and quality of their physician and hospital networks, their
benefits structure, and their prices. A proposed final judgment, filed simultaneously
with the complaint, settled the suit. The decree required Aetna to divest its
NYLCare Health Maintenance Organization (HMO) businesses in Houston and Dallas-
Consolidated Edison, Inc./Orange & Rockland Utilities, Inc. (7/2/99)
The Division did not oppose Consolidated Edisonís (ConEd) $800 million merger with Orange & Rockland Utilities after the latter company agreed to divest its electric generating plants and a plant co-owned by the companies to Southern Energy, Inc. Without the divestitures, ConEd would have owned 50 percent or more of the capacity of electric generation plants available to supply electricity in eastern New York during peak periods. The divestitures preserved competition for electricity in New York and ensured that electricity produced by Orange & Rocklandís electric generation facilities remained an independent source for electricity.
United States v. Cargill Incorporated and Continental Grain Company (7/8/
The Division filed suit challenging Cargill Incorporatedís acquisition of Continental Grain Companyís Commodity Marketing Group. Cargill and Continental operated nationwide distribution networks that annually move millions of tons of grain and soybeans to customers throughout the United States and around the world. The transaction, as originally structured, would have decreased competition for the purchase of grain (such as wheat and corn) and soybeans from farmers and other suppliers, resulting in American farmersí getting less money for major crops they produced. The complaint alleged that the combination of the merging firmsí competing port elevators in the Pacific Northwest, Central California, and the Texas Gulf would have harmed competition, and that the combination of their competing river elevators and rail terminals in Midwestern states, such as Illinois, Iowa, Kansas, Missouri, and Ohio, would have been anticompetitive. In addition, the consolidation of Cargill and Continental river elevators along the Illinois River would have concentrated ownership of delivery points authorized by the Chicago Board of Trade (CBOT) for settlement of corn and soybean futures contracts under the control of Cargill and one other firm. This concentration would have increased the risk that prices for CBOT corn and soybean futures contracts could be manipulated. A proposed final judgment, filed simultaneously with the complaint, settled the suit. The decree required Cargill to divest grain and soybean facilities in various states.
Litton/Newport News (7/9/99)
Litton abandoned its proposed acquisition of Newport News Shipyard after the Division expressed concerns that this and a related transaction would reduce competition in the construction of naval ships. If this acquisition and Littonís acquisition of Avondale had been permitted to go forward, there would have been only two remaining companies building such ships for the Navy, and for some kinds of ships (auxilary ships and amphibious crafts), there may have been no other close alternatives. At the time of this proposed transaction, there were six U. S. shipyards doing construction for the U. S. Navy, three of which were owned by General Dynamics and one by Litton.
Abry Broadcast Partners/Bastet Broadcasting Corp. (7/16/99)
Abry Broadcast Partners abandoned its proposed agreement with Bastet Broadcasting to sell advertising on competing television stations and purchase Bastet after the Division expressed concerns about the transaction. At the time of the proposed acquisition, Abry owned WBRE-TV (the NBC affiliate) and Bastet owned WYOU-TV (the CBS affiliate), both of which where in Wilkes-Barre/Scranton, Pennsylvania, market. The transaction would have reduced competition in the sales of television advertising in the WilkesBarre/Scranton market, and businesses would have likely paid higher prices to advertise on the local broadcast stations.
United States v. Allied Waste Industries, Inc. and Browning-Ferris Industries,
The Division challenged Allied Waste Industriesí proposed $9.4 billion acquisition of Browning-Ferris Industries (BFI). Allied and BFI were direct competitors in many geographic markets for both waste collection and waste disposal services, and the transaction, as originally structured, would have substantially lessened competition for waste collection and disposal services in 18 markets. In most of the markets, the combination of Allied and BFI would have left only two or three major competitors. As a result, those competitors would have been able to coordinate their pricing, causing consumers (residents, businesses, and government entities) to pay higher prices. A proposed final judgment, filed simultaneously with the complaint, settled the suit. The final judgment required divestitures in every market in which there was a significant competitive overlap in the companiesí waste or waste disposal operations. Waste collection firms, like Allied and BFI, contract to collect municipal solid waste (garbage and trash) from residential and commercial customers. They transport the waste to disposal facilities, such as transfer stations, incinerators, and landfills, which for a fee will process and legally dispose of waste.
United States v. Smith International, Inc. and Schlumberger, Ltd. (7/27/
On July 27, 1999, in its first criminal antitrust contempt petition case involving
a merger decree in more than 15 years, the Division filed civil and criminal
contempt papers against Smith International and Schlumberger. The Division petitioned
the U. S. District Court for an Order to Show Cause why respondents Smith International
and Schlumberger should not be found in criminal and civil contempt for violating
a Final Judgment entered by the Court on April 12, 1994, in United States v.
Baroid, et al., Civil Action No. 93-262 (1993), as modified, by the Courtís
September 19, 1996 order. The Final Judgment was the result of a civil suit,
filed December 23, 1993 by the Division, to block the merger of Dresser Industries,
Inc. and Baroid Corporation. At that time, M-I Drilling Fluids, a company in
which Dresser had a 64 percent interest, and Baroid were the two largest producers
of drilling fluids in the United States. The court order settling the suit required
Dresser to sell either its interest in M-I or Baroidís drilling fluids subsidiary.
To comply with the Courtís order, Dresser sold its M-I interest to Smith, and
Smith agreed to be bound by the Final Judgment. The Final Judgment also barred
Smith from selling the divested drilling fluid business to, or combining that
business with, the drilling fluid operations of certain companies, including
Schlumberger. According to the petitions, despite the clear language of the
Courtís order, Smith violated the Final Judgment by selling Schlumberger a 40
percent interest in the joint venture and combining M-I with Schlumbergerís
drilling fluid operations. The petitions alleged that Smithís actions were in
willful violation of the Final Judgment to which it was bound and requested
that the Court require both companies to pay a fee for each day that the were
in violation of the order to comply and impose criminal penalties. On December
9, 1999 the Court found the companies in civil and criminal contempt and imposed
criminal fines of $1.5 million. The parties also agreed to pay $13.1 million
to settle the civil contempt case.
Thomas E. and James D. Ingstad/MSB, Inc. (8/17/99)
The Division did not oppose Thomas and James Ingstadsí proposed acquisition of KFGO, Inc. after the Ingstadís agreed to divest five radio broadcast stations (KQWB-AM/FM, KPFX-FM, KLTA-FM, and KVOX-FM) to Triad Broadcasting, a new market entrant. Thomas and James Ingstad had proposed to purchase six radio broadcast stations (KFGO-AM/FM, KPTH-FM, KFGX-FM, and KVOX-AM/FM) from KFGO in the Fargo-Moorehead, North Dakota, radio market. At the time of the proposed acquisition, the Ingstads owned five stations. Under the restructured agreement, the Ingstads would retain ownership of KFGO-AM/FM, KVOX-AM, KFGX-FM, KPHT-FM, and WDAY-FM. Had the deal gone forward as originally structured, the Ingstads would have controlled nearly 93 percent of the radio advertising revenues and would have operated 11 of the top 14 stations in the Fargo-Moorehead market.
AK Steel Corp/Armco, Inc. (8/26/99)
AK Steel Corp. agreed to license patents relating to the manufacture and sale
of aluminized stainless steel to Wheeling-Nisshin, in order to resolve the
Divisionís concerns that the proposed acquisition would lessen competition in
the United States for the sale of aluminized 409 stainless steel. Aluminized
409 stainless steel is used prima rily in automobile exhaust systems. AK Steel
was the only U. S. producer of aluminized 409 stainless steel and held two process
patents for making the product, as well as the licenses on other product and
process patents relating to the product. Armco, which was preparing to manufacture
aluminized 409 stainless steel, held four patents, including the product patents,
and had licenses for the two process patents owned by AK Steel. As originally
structured, the proposed acquisition would have reduced competition by combining
the only U. S. producer of aluminized 409 stainless steel with the only other
U. S. company that had the rights to make and sell the product under the patents
held by AK Steel and Armco. With the license agreement, Wheeling-Nisshin would
have the ability to become a long-term, viable competitor in the manufacture
and sale of aluminized stainless steel, preserving competition for the benefit
of consumers of aluminized stainless steel.
Marathon Media L. P./Citadel Communications Corp. (9/1/99)
The Division did not oppose Marathon Mediaís acquisition of radio stations
from Citadel after Marathon agreed to sell three radio stations to New Northwest
Broadcasters II, Inc. The deal, as originally structured, would have likely
increased concentration and lessened competition for radio advertising in the
Billings, Montana, market, given Marathon almost 65 percent of advertising revenues,
and allowed Marathon to operate nine of the 16 stations in that market. Under
the restructured agreement, Marathon would sell its three Billings radio stations
(KIDX-FM, KRSQ-FM, and KGHL-AM) to New Northwest, a new entrant to the Billings
market. In addition, Marathon agreed to terminate its time brokerage agreement
with another station in the market, KBEX-FM, and to abandon its contractual
option to purchase the station. Under a time brokerage agreement, a radio station
will sell blocks of time to a broker, who then supplies the programming to fill
that time and sells commercial advertising to support that broker.
Fleet Financial Group/BankBoston Corp. (9/2/99)
The Division did not oppose Fleet Financialís merger with BankBoston after
the parties agreed to sell $13.2 billion in deposits in 306 branch offices in
Massachusetts, New Hampshire, Rhode Island, and Connecticut in order to resolve
concerns about the proposed merger for numerous banking customers in New England.
This was the largest bank divestiture in history, exceeding the $8.5 billion
divestiture in the 1992 Bank of America/Security Pacific merger. The restructured
agreement called for Fleet to divest 204 branches with about $816 billion in
deposits in Massachusetts, 13 branches with about $543.5 million in deposits
in New Hampshire, 50 branches with approximately $2.3 billion in deposits in
Rhode Island, and 39 branches with approximately $1.8 billion in deposits in
Connecticut. The bulk of the divestitures were to go to a primary buyer, while
28 branches and about $810 million in deposits were to be sold to Massachusetts
Lamar Advertising Company/Chancellor Media Company (9/15/99)
The Division did not oppose Lamarís acquisition of Chancellor Media after Lamar agreed to divest billboard assets valued at over $30 million in 31 markets across 13 states. The divestitures resolved the Divisionís concerns that Lamarís $2.6 billion acquisition would have led to a significant loss of competition in the outdoor advertising market. These divestitures provided local businesses with greater choices for their outdoor advertising needs and preserved competition in the 31 markets.