Legal Library: Cases and Proceedings

The Commission charged that Schering-Plough’s proposed $14.4 billion acquisition of Organon Biosciences N.V. threatened to substantially reduce competition in the U.S. market for three popular vaccines used to treat poultry, a staple in American food markets. The November 2007 order settling the charges required the sale of assets required to develop, manufacture, and market these vaccines to Wyeth. In addition, Schering-Plough was required to sign a supply and transition services agreement with Wyeth, under which Schering will provide the vaccines for a period of two years, allowing time for the necessary FDA approvals.

The Commission intervened in the proposed $1.3 billion acquisition of Pathmark Stores by Great Atlantic & Pacific Tea (A&P), alleging the transaction would have reduced competition among grocery stores in the highly concentrated markets of Staten Island and Shirley, Long Island, New York. A&P operates stores under the A&P, A&P Super Foodmart, Food Basics, Food Emporium, Super Fresh, and Waldbaum’s banners. The Commission’s consent order required A&P to divest five supermarkets in Staten Island, and one supermarket in Shirley.

The Commission challenged Kyphon Inc.’s $220 million proposed acquisition of the spinal assets of Disc-O-Tech Medical Technologies, Ltd. and Discotech Orthopedic Technologies (collectively Disc-O-Tech) as anticompetitive in the market for minimally invasive vertebral compression fracture treatment products in the U.S. Disc-O-Tech’s Confidence products promised real benefits to patients in treating these painful fractures in a minimally invasive way, and threatened Kyphon’s near-monopoly on treatment options. The Commission’s consent order required that Kyphon divest all assets, intellectual property and development rights related to the Confidence brand to an FTC-approved buyer

In December 2007, the Commission challenged ValueAct Captial Partners’ violations of the Hart-Scott-Rodino Pre-Merger Notification Act’s filing requirements related to the acquisition of stock in three companies, Gartner, Inc., Catalina marketing Group, and Acxiom Corp. The firm previously violated the HSR filing requirements in 2003, and after making corrective filings, and agreeing to put HSR safeguards into place to ensure compliance with the filing requirements, the Commission decided to take no action. However, ValueAct failed to enact the necessary preventative measures and again violated the HSR filing requirements with its aforementioned acquisitions resulting in the Commission seeking civil penalties in the amount of $1.1 million.

The Commission remedied competitive problems raised by Owens Corning’s proposed acquisition of glass fiber reinforcements and composite fabric assets 8 from Compagnie de Saint Gobain. The investigation involved cooperation among staff of the FTC, the European Commission, and Mexico’s Federal Competition Commission. After staff from the competition agencies raised antitrust concerns, the parties modified their agreement to exclude Saint Gobain’s glass fiber reinforcement assets in the U.S. and certain assets in Europe. The Commission’s consent order addressed additional competitive problems in the highly concentrated North American market for continuous filament mat, which is used in the production of non-electrical laminate, marine parts and accessories, and other products. The order requires Owens Corning to divest sufficient U.S. continuous filament mat facilities, assets, and intellectual property to enable the buyer effectively to produce and sell the products in competition with the new Owens Corning/Saint Gobain joint venture.