Major Operator of Funeral Homes Agrees To Sell Funderal Homes in Three Markets in Settlement of FTC Antitrust Concerns

The Loewen Group Inc., one of the largest owners and operators of funeral homes and cemeteries in the United States, has agreed to divest funeral homes in three markets in order to settle Federal Trade Commission antitrust concerns. The proposed orders stem from Loewen’s acquisition of certain funeral homes in the Brownsville area and the Harlingen/San Benito area of Cameron County, Texas, and from Loewen's proposed acquisition of a chain of funeral homes in the tri-state area of Virginia, Tennessee, and North Carolina. After the acquisition, Loewen would own both funeral homes in Castlewood, Virginia. A proposed settlement to alleviate the antitrust issues in Cameron County, Texas, would require Loewen to divest one of its three funeral homes in Brownsville and divest a large funeral home in San Benito or two smaller funeral homes in Harlingen. A second proposed settlement would require Loewen to divest the acquired funeral home in Castlewood, Virginia, within nine months after it completes the acquisition.

The Loewen Group International, Inc., is based in Covington, Kentucky, and is a wholly-owned subsidiary of The Loewen Group Inc., based in Burnaby, British Columbia, Canada.

The complaint detailing the FTC's charges about the Texas acquisitions alleges that The Loewen Group’s acquisition of the Garza Memorial Funeral Home substantially reduced competition in the Brownsville area and the Loewen Group's acquisition of Thomae-Garza Funeral Directors, Inc., substantially reduced competition in the Harlingen/San Benito area.

The complaint also alleges that entry into these two markets is difficult and that:

• competition would be eliminated between Loewen Group International and Garza Memorial in Brownsville and between Loewen Group International and Thomae-Garza in Harlingen/San Benito;
• the likelihood of collusion would be increased in both relevant markets; and
• the likelihood that Loewen Group International would unilaterally exercise market power in Brownsville would be increased.

The FTC's complaint concerning the Castlewood, Virginia, area alleges that Loewen’s proposed acquisition of Heritage Family Funeral Services, Inc., would substantially reduce competition in the area. Heritage and Loewen each own funeral homes in Castlewood, are actual competitors, and are the only firms providing funeral services in the Castlewood area. According to the FTC’s complaint, entry into that market is difficult and the proposed acquisition would:

• eliminate actual competition between Loewen Group International and Heritage; and
• create a monopoly in the relevant market.

Proposed agreements to settle the FTC's charges in these matters, announced today for a public comment period, would require Loewen to divest the Heritage funeral home in Castlewood within nine months after the acquisition to an FTC-approved acquirer. Loewen would be required to maintain the viability and marketability of the property until the divestiture is completed. The purpose of the divestiture is to ensure the continued use of the property as an ongoing enterprise providing funerals and to remedy the lessening of competition as alleged in the compliant. If Loewen does not complete the divestiture within nine months, the FTC can or may appoint a trustee to divest the property. In addition, Loewen is required, for ten years, to give prior notice to the FTC before acquiring the assets of or any interest in a funeral home operating within the two years preceding the acquisition of Heritage.

The proposed settlement involving the Cameron County, Texas, areas of Brownsville and Harlingen/San Benito would require Loewen to divest either Garza Memorial Funeral Home, Inc., the Darling-Mouser Funeral Home, Inc., or Paragon Family Services, Inc., in Brownsville. In Harlingen/San Benito, Loewen would be required to divest either Thomae-Garza Funeral Directors, Inc. or both the Pitts, Kriedler-Ashcraft Funeral Directors, Inc., and Garza-Elizondo funeral homes in Harlingen. Loewen would be required to divest the properties within 12 months to FTC-approved acquirers and would be required to maintain the viability and marketability of the property until the divestitures are completed. If Loewen does not complete the divestiture within 12 months, the FTC may or can appoint a trustee to oversee the divestitures. In addition, Loewen would be required, for ten years, to give prior notice to the FTC before acquiring the assets of or any interest in a funeral home operating within the two years preceding its acquisition of the funeral homes in Cameron County, Texas.

The Commission vote to accept the proposed consent agreements for public comment was 4-0, with Chairman Robert Pitofsky recused. This matter is being handled by the FTC’s Regional Office in Dallas, Texas.

The proposed consent agreements will be published in the Federal Register shortly and will be subject to public comment for 60 days, after which the Commission will decide whether to make them final. Comments should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

NOTE: Consent agreements are for settlement purposes only and do not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $10,000.

Copies of the complaints, proposed consent agreements and an analysis of each agreement to assist the public in commenting are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 202-326-2502. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov

(FTC File Nos.: 931 0052 (Texas); 931 0084 (Virginia))

(Loewen)