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The Federal Trade Commission on Tuesday asked the U.S. District Court in Washington, D.C., for an emergency order to prevent Arch Coal Inc. from completing its $384 million acquisition of Triton Coal Co. “Unless this court issues an injunction pending appeal, defendants will be free to consummate their proposed acquisition, causing irreversible consequences,” the FTC said in a public version of the filing released Tuesday after the markets closed. The FTC had sought a preliminary injunction to stop the merger of the two mining companies, both of which operate in Wyoming’s Southern Powder River Basin. But U.S. District Judge John D. Bates denied the FTC motion Friday, finding that the agency failed to show that the merger was likely to harm competition. The FTC minced few words in blasting Bates and his conclusion that the agency had brought a “novel” merger challenge by focusing on the risk that other mining companies would collude to reduce output rather than to raise prices. “The only novelty in this matter is the district court’s abandonment of well-established principles of merger jurisprudence — a departure inspired by the court’s failure to grasp the basic economic principle that output restrictions often are the means by which rivals collectively raise prices,” the FTC said. The agency also said the judge erred in accepting Arch Coal’s commitment to sell the Buckskin mine, one of the two it is buying from Triton. This divestiture is unenforceable and not subject to ongoing FTC oversight, the agency said. “By relying decisively on the merger promises of the defendants about future behavior, the district court in effect repeals the statutory framework established over the past three decades to ensure that merger enforcement yields meaningful remedies,” the agency said. In justifying his decision, Bates faulted the FTC for failing to show that coal producers in the Southern Powder River Basin have colluded. He also criticized customers that testified in the antitrust case for failing to specify how the merger would affect coal prices. The FTC countered that such a level of certainty is well in excess of what the agency must show to secure a preliminary injunction. “This decision warrants close scrutiny by this court,” the FTC said. “Any temporary inconvenience that an expedited appeal may inflict on defendants’ merger plans is insignificant in light of the substantial legal issues raised by this appeal.” Copyright �2004 TDD, LLC. All rights reserved.

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