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In a flurry of end-year activity, the antitrust agencies Dec. 18 sued to block a glass company merger and approved divestiture agreements for Suiza Foods Corp.’s acquisition of Dean Foods Co. and Valero Energy Corp.’s purchase of Ultramar Diamond Shamrock Corp. All three deals had been scheduled to close by Dec. 31, though the transactions appeared to bog down, and some had predicted they would not get resolved before the new year. While Suiza and Valero appeared to have worked out antitrust agreements, Libbey Inc. could not persuade the Federal Trade Commission to drop antitrust objections to its $332 million acquisition in June of Anchor Hocking, a unit of Freeport, Ill.-based Newell Rubbermaid Inc. The FTC charged Libbey’s acquisition of Anchor would harm competition for soda-lime glassware, a line of tumblers, stemware, serving platters and similar products sold to the food-service industry. It said Libbey is the largest seller of soda-lime glassware while Anchor is No. 3. The agency also said it would be difficult to create a competitor in the market if the deal proceeds. The commission voted 5-0 to seek a preliminary injunction in U.S. District Court in Washington, D.C., to block the deal pending an administrative hearing before the agency. The preliminary injunction is expected to be filed by Friday. FTC competition bureau director Joe Simons said Anchor is Libbey’s closest competitor because it makes glassware identical to products Libbey produces. This means a restaurant may order additional glasses from Anchor without replacing all of their Libbey products. “Anchor is the primary maker of glasses that duplicate Libbey’s,” Simons said. “The acquisition would combine the dominant firm in the market with its closest competitor.” Libbey Treasurer Kenneth Boerger declined to comment. Toledo, Ohio-based Libbey agreed June 18 to acquire Anchor Hocking in an all-cash deal financed by Bank of America Corp., Bank One Corp. and Bear, Stearns & Co. The deal was for about 1.5-times annual revenue and 6.1-times Ebitda for the 12 months ending March 31. It was expected to add 10 cents to 15 cents to earnings per diluted share. For Suiza’s $1.65 billion acquisition of Dean, the Department of Justice dropped antitrust objections after the Dallas-based company agreed to divest 11 plants, five more than initially proposed. The divestiture deal is complex, but mirrors a Dec. 6 summary released by Suiza. The Dairy Farmers of America will sell Suiza its 33.8 percent stake in Suiza’s fluid milk business in exchange for the 11 plants and $165 million in cash. Ownership of the plants and cash will pass through the DFA to National Dairy Holdings, a new corporation that also has acquired the fluid milk businesses Marigold Foods and Crowley Foods, both former units of Swiss giant Wessanen AG. The DFA will own 50 percent of National Dairy, though it will have a minority voting interest. Besides adding more plants to the divestiture plan, Suiza also altered the sale terms so National Dairy would be free to buy milk from producers other than the DFA, the Justice Department said. “These divestitures ensure that consumers of milk, an American staple, continue to get the benefits of competition,” Assistant Attorney General Charles James said. “Maintaining competition in the dairy industry is important for American consumers.” The Dean milk plans being sold are in Huntsville, Ala.; Winter Haven, Fla. and Miami; New Paris, Ind.; London and Madisonville, Ky.; Cincinnati and Cleveland; North Charleston, S.C.; Bristol, Va.; and Salt Lake City. Suiza Vice President Cory M. Olson said the companies expect to close the deal by Dec. 31. He declined further comment. Suiza announced its acquisition of Franklin Park, Ill.-based Dean in April, agreeing to exchange each Dean share for $21 in cash and .429 shares of Suiza. It also agreed to assume $1 billion of debt. The deal represented a 26 percent premium over Dean’s stock price the day before the transaction was announced. At the FTC, commissioners voted 4-0 to approve a consent decree requiring San Antonio-based Valero to divest the 168,000 barrel-per-day Golden Eagle refinery in San Francisco and 70 northern California Beacon and Ultramar branded gas stations. FTC Chairman Timothy J. Muris was recused. The company has 12 months to complete the sale, though Valero has said it expects to announce a buyer early next year and close the divestiture in the second quarter. Terms of the deal were initially disclosed Dec. 3 when the company and FTC staff reached a preliminary agreement. A spokesman for the Oregon attorney general said his agency also was part of the agreement, which he expected to release Tuesday. The California attorney general’s office also is expected to have signed on to the consent decree. Copyright (c)2001 TDD, LLC. All rights reserved.

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