Legal Library: Cases and Proceedings

In an administrative complaint issued on October 25, 2001, the Commission challenged the February 2001 purchase of the Water Division and Engineered Construction Division of Pitt-Des Moines, Inc. alleging that the consummated merger significantly reduced competition in four separate markets involving the design and construction of various types of field-erected specialty industrial storage tanks in the United States. On June 27, 2003, an administrative law judge upheld the complaint and ordered the divestiture all of the assets acquired in the acquisition. In December 2004, the Commission approved an interim consent order prohibiting Chicago Bridge & Iron from altering the assets acquired from Pitt-Des Moines, Inc. except “in the ordinary course of business.” These assets included but were not limited to real property; personal property; equipment; inventories; and intellectual property. On January 7, 2005 the Commission upheld in part the ruling of an administrative law judge that Chicago Bridge & Iron’s acquisition of the Water Division and the Engineered Construction Division of Pitt-Des Moines, Inc. created a near-monopoly in four separate markets involving the design and construction of various types of field-erected specialty industrial storage tanks in the United States. In an effort to restore competition as it existed prior to the merger, the Commission ordered Chicago Bridge to reorganize the relevant product business into two separate, stand-alone, viable entities capable of competing in the markets described in the complaint and to divest one of those entities within six months. On January 25, 2008 the U.S. Court of Appeals for the Fifth Circuit upheld the Commission's order.  In November 2008, the Commission approved divestiture of the assets to Matrix Service Company.

There is a related administrative proceeding.

In October of 2008, the Commission issued a consent order to settle charges that Golf Galaxy, a subsidiary of Dick’s Sporting Goods Inc., entered into an illegal agreement with Golf Canada to allocate the market for golf merchandise in the United States and Canada. The agreement barred Golf Canada from opening stores in the United States in exchange for privileged business information from Golf Galaxy, including blueprints, merchandising plans, and sales reports. The Commission’s consent order prevents Golf Galaxy from further dividing or allocating the market, and rendered its 2004 non-compete agreement with Golf Canada unenforceable.

In August 2006, the FTC approved a final consent order relating to the proposed $14.4 billion acquisition of the BOC Group by Linde requiring Linde to divest Air Separation Units (ASUs), bulk refined helium assets, and other assets in eight localities across the United States. The consent order aims to maintain competition in the markets for liquid oxygen, liquid helium, and bulk refined helium in several U.S. markets.

The Commission charged that Agrium, Inc.’s $2.65 billion proposed acquisition of UAP Holding Corporation would substantially lessen competition in the market for the retail sale of bulk fertilizer and, in some cases, related services by farm stores, in several local markets in Michigan and Maryland. The Commission’s order requires the divestiture of seven farm stores, five UAP stores in Michigan, and two Agrium locations on the eastern shore of Maryland.

The Commission challenged Fresenius Medical Care’s proposed purchase of an exclusive sublicense for the manufacture and supply of the drug Venofer to US dialysis clinics from Daiichi Sankyo Company. Venofer is an intravenously administered iron sucrose preparation used primarily to treat iron-deficiency anemia in dialysis patients with chronic kidney disease. The agreement would have given Fresenius, the largest operator of dialysis clinics in the country, the ability to artificially inflate its internal costs for Venofer, and effectively increase Medicare reimbursement payments for all buyers of the drug. In order to settle these concerns about anticompetitive self-dealing, the Commission issued a consent order restricting Fresenius from reporting internally inflated Venofer prices by mandating that the current market price for the drug be used in reporting the average selling price to Medicare.

The Commission challenged Pernod Ricard SA’s proposed $9 billion acquisition of V&S Vin & Spirit as harmful to competition among suppliers of “super-premium” vodka. The proposed deal would have merged the two leading brands, Absolut and Stolichnaya, and allowed Pernod to raise prices profitably on both brands. Additionally, the complaint alleges that the markets for cognac, domestic cordials, coffee liqueur, and popular gin would be subject to anticompetitive effects because sensitive pricing and promotion information for Beam Global Brands, a competitor in these product markets, would be available to Pernod after the acquisition as a result of Beam’s joint venture with V&S. The Commission settled the charges by requiring Pernod to divest its distribution interests in Stolichnaya Vodka, and to erect a firewall to prevent the sharing of any competitively sensitive information from Beam Global Brands with Pernod employees.