Antitrust Lawyer Blog

On November 22, the nation’s two largest funeral home and cemetery chains reached an agreement with the Federal Trade Commission, which contended that Service Corporation International’s (SCI) proposed acquisition of Alderwoods Group Inc. would lessen competition in 47 markets for funeral or cemetery services, leaving consumers with fewer choices and the prospect of higher prices or reduced levels of service. Under the settlement, SCI must sell funeral homes in 29 markets and cemeteries in 12 markets across the United States. In six other markets, SCI must sell certain funeral homes that it plans to acquire or end its licensing agreements with third-party funeral homes affiliated with SCI.

According to the complaint, the proposed acquisition would raise competitive concerns in 35 highly concentrated funeral service markets and 12 highly concentrated cemetery service markets. In six of these funeral service markets in which Alderwoods operates, SCI does not own or operate a facility, but has a competitive presence through licensing contracts with third- party funeral service providers. These Dignity Memorial affiliates are authorized by SCI to sell services and products under SCI’s Dignity Memorial service mark. SCI sells them promotional materials or sales aids and cooperates with them on pricing for funeral services.

The 29 funeral service markets are Abilene, Texas; Alhambra, California; Baton Rouge, Louisiana; Brownsville, Texas; Broward County, Florida; Cartersville, Georgia; Charlotte, North Carolina; Fort Myers, Florida; Gonzales, Louisiana; Greensboro, North Carolina; Hanford, California; Killeen, Texas; Lansing, Michigan; Lexington/West Columbia, South Carolina; Lynchburg, Virginia; Manassas, Virginia; Memphis, Tennessee; Merced, California; Meridian, Mississippi; Miami-Dade County, Florida; Newton, Mississippi; Odessa, Texas; Port Orange, Florida; Northern Rockland County, New York; Seguin, Texas; Tulare, California; Southern Ventura, California; Yakima, Washington, and Yuma, Arizona.

On October 20, the Federal Trade Commission announced its decision to challenge Barr Pharmaceutical, Inc.’s proposed acquisition of Pliva for approximately $2.5 billion. The FTC’s complaint alleges that the acquisition as originally structured would have eliminated current or future competition between Barr and Pliva in certain markets for generic pharmaceuticals treating depression, high blood pressure and ruptured blood vessels, and in the market for organ preservation solutions, thereby increasing the likelihood that consumers would pay more for these vital products.

In settling the Commission’s charges, Barr is required to sell its generic antidepressant trazodone and its generic blood pressure medication triamterene/HCTZ. Barr also is required to divest either Pliva’s or Barr’s generic nimodipine for use in treating ruptured blood vessels in the brain. Finally, Barr is required to divest Pliva’s branded organ preservation solution Custodial.

The Commission identified four product markets that likely would experience anticompetitive effects if the proposed acquisition was allowed to proceed unchallenged. Trazodone hydrochloride is an antidepressent sold in several different formulations. There are five suppliers of generic trazodone in the U.S., but not all the suppliers are capable of supplying all formulations. Barr and Pliva are two of only three suppliers of the 150 mg formulation of generic trazodone.

On October 20, the European Commission cleared the proposed acquisition by Hewlett Packard Company of control over the U.S. software company Mercury Interactive Corporation. The Commission concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it.

Hewlett Packard is a technology solution provider to consumers, businesses and institutions throughout the world. Its activities span IT infrastructure, personal computing and access devices, global services, imaging and printing. Mercury is a software company that develops and markets products in IT governance, application delivery and application management.

The parties’ activities overlap to a significant extent only with respect to performance management software, a category of software used to quantify the actual performance of applications once they have gone live with users, i.e. in the post-deployment phase. However, the Commission found that adverse effects on competition were unlikely to arise as Hewlett Packard continued to face effective competition not only from established competitors with significant market shares but also from many mid-size and smaller suppliers also present in this market.

The Commission charged on October 17 that Thermo Electron Corporation’s proposed $12.8 billion acquisition of Scientific International, Inc. would harm competition in the U.S. market for high-performance centrifugal vacuum evaporators (“CVEs”) in violation of the antitrust laws.

Thermo and Fisher are the only two significant suppliers of high-performance CVEs in the United States and the proposed transaction would have eliminated the direct price, service, and innovation competition that exists between them. To settle the Commission’s charges, Thermo is required to divest Fisher’s Genevac division, which includes Fisher’s entire CVE business, within five months of the date the consent agreement was signed.

High-performance CVEs are used primarily in combinatorial chemistry labs, such as those engaged in drug discovery and research, to process large collections of potentially biologically active molecules at the same time – a process known as parallel synthesis. By applying a combination of heat, vacuum, and centrifugal force, high-performance CVEs rapidly remove solvents from samples suspended in solution in the wells of microtiter plates or test tubes without causing molecular degradation or cross-contamination of the samples.