STATES DISTRICT COURT
FEDERAL TRADE COMMISSION,
CARDINAL HEALTH, INC.,
BERGEN BRUNSWIG CORP.,
COMPLAINT FOR PRELIMINARY INJUNCTION PURSUANT TO SECTION 13(b) OF THE FEDERAL TRADE COMMISSION ACT
Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), by its designated attorneys, petitions the Court, pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), for a preliminary injunction enjoining defendant Cardinal Health, Inc. ("Cardinal"), including its domestic and foreign agents, divisions, subsidiaries, affiliates, partnerships, or joint ventures, from acquiring through a merger or otherwise any stock, assets, or other interest, either directly or indirectly, from defendant Bergen Brunswig Corp. ("Bergen"); thereby maintaining the status quo during the pendency of an administrative proceeding, challenging defendant's proposed combination, that will be commenced by the Commission pursuant to Section 5 of the FTC Act, 15 U.S.C. § 45, and Sections 7 and 11 of the Clayton Act, 15 U.S.C. §§ 18 and 21.
JURISDICTION AND VENUE
1. Jurisdiction is based on Section 13(b) of the FTC Act, 15 U.S.C. § 53(b) and 28 U.S.C. §§ 1337 and 1345. Venue is proper under Section 13(b) of the FTC Act; 28 U.S.C. § 1391(b) and (c); and Section 12 of the Clayton Act, 15 U.S.C. § 22.
2. The Commission is an administrative agency of the United States Government established, organized, and existing pursuant to the FTC Act, 15 U.S.C. § 41 et seq., with its principal offices at Sixth Street and Pennsylvania Avenue, NW, Washington, DC 20580. The Commission is vested with authority and responsibility for enforcing, inter alia, Section 7 of the Clayton Act and Section 5 of the FTC Act.
3. Defendant Cardinal is a corporation organized and existing under the laws of the state of Ohio, with its principal place of business at 655 Metro Place South, Dublin, Ohio 43017.
4. Defendant Bergen is a corporation organized and existing under the laws of the state of New Jersey, with its principal place of business at 4000 Metropolitan Drive, Orange, California 92668.
5. Defendant Cardinal is engaged in commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44, and Section 1 of the Clayton Act, 15 U.S.C. § 12.
6. Defendant Bergen is engaged in commerce, as defined in Section 4 of the FTC Act, 15 U.S.C. § 44, and Section 1 of the Clayton Act, 15 U.S.C. § 12.
SECTION 13(b) OF THE FTC ACT
7. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), provides in pertinent part:
(b) Whenever the Commission has reason to believe --
(1) that any person, partnership or corporation is violating, or is about to violate, any provision of law enforced by the Federal Trade Commission, and
(2) that the enjoining thereof pending the issuance of a complaint by the Commission and until such complaint is dismissed by the Commission or set aside by the court on review, or until the order of the Commission made thereon has become final, would be in the interest of the public --
the Commission by any of its attorneys designated by it for such purpose may bring suit in a district court of the United States to enjoin any such act or practice. Upon a proper showing that, weighing the equities and considering the Commission's likelihood of ultimate success, such action would be in the public interest, and after notice to the defendant, a temporary restraining order or a preliminary injunction may be granted without bond. . . .
THE PROPOSED MERGER AND THE COMMISSION'S RESPONSE
8. Pursuant to an Agreement and Plan of Merger dated August 23, 1997, Cardinal proposes to acquire all of the voting shares of Bergen for approximately $2.5 billion, and to merge with Bergen.
9. On March 3, 1998, the Commission authorized the commencement of an action under Section 13(b) of the FTC Act to seek injunctive relief barring the proposed merger during the pendency of administrative proceedings.
10. Defendants Cardinal and Bergen have advised the Commission that they will delay consummation of the proposed acquisition until after this Court rules on the Commission's request for a preliminary injunction.
11. In authorizing the commencement of this action, the Commission determined that such an injunction is in the public interest and that it has reason to believe that the aforesaid proposed merger would violate Section 7 of the Clayton Act because the acquisition may substantially lessen competition and/or tend to create a monopoly in the relevant market.
LIKELIHOOD OF SUCCESS ON THE MERITS AND NEED FOR RELIEF
12. The Commission is likely ultimately to succeed in demonstrating, in administrative proceedings to adjudicate the legality of the proposed merger, that the proposed merger would violate Section 7 of the Clayton Act. In particular, the Commission is likely ultimately to succeed in demonstrating, inter alia, that:
a. The relevant product market in which the competitive effects of the proposed merger may be assessed is the wholesale distribution of a full line of prescription drugs (including the provision of services related to such distribution), delivered to the point of dispensing on a next-day or more frequent basis. Narrower markets include drug wholesaling to particular classes of customers, including hospitals and other institutional customers; independent drugstores; and chain drugstores.
b. One relevant geographic market within which to assess the competitive effects of the proposed merger is the United States. c. The effect of the proposed acquisition, if consummated, may be substantially to lessen competition in the relevant market(s) by, among other things, eliminating an effective competitor, and eliminating or reducing substantial actual competition between Cardinal and Bergen, thereby increasing the likelihood of anticompetitive activity in the relevant market(s) once this acquisition is consummated. Moreover, these anticompetitive effects would be heightened by another proposed merger in the same relevant market(s), if McKesson Corporation consummates its proposed acquisition of AmeriSource Health Corporation.
d. Substantial and effective entry into the relevant market(s) is difficult.
13. The reestablishment of Cardinal and Bergen as independent viable competitive entities if they were to merge would be difficult, and there is a substantial likelihood that it would be difficult or impossible to restore the businesses as they originally existed. Furthermore, it is likely that substantial interim harm to competition would occur even if suitable divestiture remedies could be devised.
14. For the reasons stated above, the granting of the injunctive relief sought is in the public interest.
WHEREFORE, the Commission requests that the Court:
1. Preliminarily enjoin defendant Cardinal, and all its affiliates, from taking any further steps to consummate, directly or indirectly, the proposed merger with Bergen, or any other acquisition of stock, assets, or other interest, either directly or indirectly, in Bergen;
2. Maintain the status quo pending the issuance of an administrative complaint by the Commission challenging such acquisition, and until such complaint is dismissed by the Commission or set aside by a court on review, or until the order of the Commission made thereon has become final; and
3. Award such other and further relief as the Court may determine to be proper and just, including costs.
MICHAEL E. ANTALICS
Dated: March 9, 1998