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 Armstrong—a 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 Division’s 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 UNC’s 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 Signal’s 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 Anchor’s 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 Division’s 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. Smith’s, Inc. (6/7/96)
ConAgra abandoned its plans to acquire 100 percent of Mrs. Smith’s, 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. Smith’s 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 Division’s concerns that Cooper Cameron’s $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 nation’s 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 Division’s 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 nation’s 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 West’s 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 International’s acquisition of Solvay’s 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/ 96)
The Division challenged the $770 million merger between Jacor and Citicasters, two of the nation’s 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 dishes.)
Outdoor Systems, Inc./Gannett Co. (8/12/96)
The Division announced that after it raised competitive concerns with Outdoor Systems’ 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 ChiChi’s restaurants, was acquired by ChiChi’s, 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 Division’s competitive concerns with IngersollRand’s 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 Knight’s 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 Company’s 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 Jackson’s 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 General’s Office announced that they would not oppose a $280 million deal between America’s two largest tortilla flour manufacturers—Archer Daniels Midland Co. (ADM) and Grumman S. A—after 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 companies’ 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 Division’s 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 Continental’s 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 Communications’ 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 WEST’s dominance.
United States v. Westinghouse Electric Corp. and Infinity Broadcasting Corp. (11/13/96)
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 systems—Andersen Area Medical Center, Greenville Hospital System and Spartanburg Hospital System (collectively AGS)—abandoned 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 area’s 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 market.
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 Resorts’ $310 million acquisition of Ralston Resorts and simultaneously filed a proposed final judgment requiring that Ralston’s 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 Colorado’s 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 Range market.
United States v. Signature Flight Support Corp. (2/5/97)
The Division challenged Signature Flight Support’s 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 Airport.
(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 Division’s 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. (2/27/97)
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 signals—the strongest and most competitively significant radio broadcasting signals—operating in the area and would have given ARS 36 percent of Sacramento’s 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 EZ’s 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 Charlotte’s 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 EZ’s successor) would become a party to the EZ/Evergreen action and would be required to fulfill EZ’s 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 nation’s 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 Akzo’s 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 Northern’s 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 Energy’s 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 Aggregates’ Harding Street Quarry in Indianapolis.
Lamar Advertising Co./Hedrick Outdoor, Inc. (6/2/97)
The Division announced that it would not oppose Lamar Advertising’s 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 Shore’s flagship hospital, North Shore Manhasset, and LIJMC were each other’s principal competitor by virtue of their premier reputations, comparable full range of services, and strategic location. They competed headto-head to be the “flagship” or “anchor” 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 government’s 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 Mahle’s 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 world’s 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 Instruments’ Defense System and Electronics Unit by Raytheon Company. The acquisition, as originally structured, would have resulted in higher prices paid by the Department of Defense— and ultimately by the taxpayers— for advanced military radars used in major weapons systems. The Division simultaneously filed a proposed final judgment requiring Raytheon to sell Texas Instruments’ 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 Telecom’s 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 Telecom’s 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 Communications’ 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 Waste’s Crow Landfill or developed a new landfill nearby. In addition, the decree required the acceptance of waste at Allied’s 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 Systems’ acquisition of 3M’s 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 nation’s 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 International’s 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-America’s access to information about Milk Products.
United States v. Raytheon Company, General Motors Corp., and HE Holdings, Inc. (10/16/97)
The Division challenged Raytheon’s $5.1 billion acquisition of General Motors’ 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 Corporation’s and Central Fidelity Banks’ merger after Wachovia agreed to divest nine branches, with total deposits of about $218 million, in order to resolve the Division’s 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 Communications’ $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 Lincoln’s stations would lessen competition in the Youngstown radio advertising market. Without the divestiture, Connoisseur’s 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 Chancellor’s acquisition of four Long Island, New York, radio stations, alleging that the acquisition would result in local businesses’ 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 SFX’s Long Island stations. The judgment also required Chancellor and SFX to terminate a local marketing agreement under which Chancellor had been operating SFX’s 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 Division’s investigation was conducted jointly with the Florida Attorney General’s Office.
United States v. Aluminum Company of America and Reynolds Metals Company (12/29/97)
The Division challenged Alcoa’s acquisition of Reynolds’ 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 Electric’s proposed $600 million purchase of Stewart & Stevenson Services’ 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 GE’s 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 PerkinElmer’s $360 million purchase of PerSeptive BioSystems after PerkinElmer agreed to sell the entire bundle of PerSeptive’s 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 Capstar’s 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 Division’s first challenge to a merger between a gas and electric utility. The complaint alleged that, as a result of the merger of Pacific’s natural gas pipeline with Enova’s 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 Enova’s 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 Heritage’s 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/ 98)
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 Martin’s 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 down.)
United States v. Lehman Brothers Holdings, Inc. and L-3 Communica-tions Holdings, Inc. (3/27/98)
The Division challenged L-3 Communications’ (L-3) proposed acquisition of Allied Signal’s 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 Systems’ 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-3’s 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-3’s design, production, and bid plans for towed arrays would be shared with Lockheed Martin.
United States v. Loewen Group, Inc. and Loewen Group International, Inc. (3/ 31/98)
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 Group’s $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 nation’s 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 Boston’s 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 CBS’s 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/ 98)
The Division did not oppose Clear Channel Communications’ $1.1 billion acquisition of Universal Outdoor Holdings after Clear Channel agreed to resolve the Division’s 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 Division’s investigation was conducted jointly with the Pennsylvania Attorney General’s 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 One’s $3.1 billion merger with First Commerce after the banks agreed to resolve the Division’s 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 Primestar’s 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 owners’ cable systems and would eliminate the cable companies’ most significant potential competitor, News Corp. ’s ASkyB satellite venture. On October 14, 1998, Primestar abandoned its acquisition of News Corp. ’s and MCI’s 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. ’s 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 Bank’s 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 (5/28/98)
The Division did not oppose Sinclair’s 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 Capstar’s 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 Bangor’s 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 Environmental’s acquisition of Smiths Industries, plc’s 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 Environmental’s 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 Airlines’ proposed acquisition of about 8.5 percent of Aerolineas Argentinas, Argentina’s 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 by Aerolineas.
United States v. General Electric Company and InnoServ Technologies, Inc. (7/14/98)
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 hospital’s equipment. GE was the world’s largest manufacturer of medical imaging equipment and a leading provider of service for all types and brands of medical equipment, and InnoServ’s 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 InnoServ’s PREVU software to a third party.
WorldCom, Inc./MCI Communications Corp. (7/15/98)
The Division did not oppose WorldCom’s $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 nation’s 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 a table.)
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 nation’s 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 construction.
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 the transaction.
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 Communications’ $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 General’s 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 NationsBank’s 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 Division’s concerns that the merger would lessen competition for loans to small and medium-sized businesses. The Division’s 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 Division’s investigation was conducted jointly with the Indiana Attorney General’s 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 Corporation’s 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 parties’ 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, Dresser’s 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 Advertising’s $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 their businesses.
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. (10/ 23/98)
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 Continental’s profits, diminishing substantially both Northwest’s and Continental’s incentives to compete against each other. The complaint alleged that Northwest and Continental are each other’s most significant competitor—if not the only competitor—for nonstop airline service between the cities where they operate hubs. According to the complaint, Northwest plans to acquire stock representing 14 percent of Continental’s equity but carrying 51 percent of its voting rights. Although a related agreement with Continental required Northwest to place its stock in a “voting trust” 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 Media’s $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 nation’s 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 City’s 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 City’s residential waste.
United States v. Pearson, plc, Pearson, Inc., and Viacom International, Inc. (11/23/98)
The Division challenged Pearson’s $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 Media’s $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 Company’s 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 Monsanto’s $2.3 billion acquisition of DeKalb Genetics after Monsanto agreed to modify the deal. The Division’s 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 Holden’s 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 TCI’s 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 Sprint’s 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 Sprint’s 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 Corp. (3/1/99)
The Division challenged Signature Flight Support Corp. ’s 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/ 99)
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 Foods’ 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 sought— and the defendants agreed not to oppose— 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 SBC’s $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 Industries’ $44 million acquisition of AlliedSignal’s pitch and coal tar refining business after the parties agreed to restructure the transaction to resolve the Division’s 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 Reilly’s contractual rights to use AlliedSignal’s 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 parties’ 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 (4/13/99)
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 Weber’s label to Four-S Baking Company for production and sale of Weber’s 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 “a perpetual, royalty-free, assignable, transferable, exclusive license” to use the Weber’s label. Despite the clear language of the order, IBC had demanded that Four-S return the formulas and production processes for the baking of Weber’s bread. The petition stated that the IBC’s 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 court’s 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 Company (4/21/99)
The Division challenged Capstar’s $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 Channel’s $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 SA’s $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 Division’s complaint challenged Bell Atlantic’s 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 Paine’s 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 Company’s $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 station’s 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 America’s 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- Fort Worth.
Consolidated Edison, Inc./Orange & Rockland Utilities, Inc. (7/2/99)
The Division did not oppose Consolidated Edison’s (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 & Rockland’s electric generation facilities remained an independent source for electricity.
United States v. Cargill Incorporated and Continental Grain Company (7/8/ 99)
The Division filed suit challenging Cargill Incorporated’s acquisition of Continental Grain Company’s 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 farmers’ getting less money for major crops they produced. The complaint alleged that the combination of the merging firms’ 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 Litton’s 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, Inc. (7/20/99)
The Division challenged Allied Waste Industries’ 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 companies’ 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/ 99)
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 Court’s 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 Baroid’s drilling fluids subsidiary. To comply with the Court’s 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 Court’s order, Smith violated the Final Judgment by selling Schlumberger a 40 percent interest in the joint venture and combining M-I with Schlumberger’s drilling fluid operations. The petitions alleged that Smith’s 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 Ingstads’ proposed acquisition of KFGO, Inc. after the Ingstad’s 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 Division’s 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 Media’s 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 Financial’s 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 banks.
Lamar Advertising Company/Chancellor Media Company (9/15/99)
The Division did not oppose Lamar’s 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 Division’s concerns that Lamar’s $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.