Ecolab acquisition plans getting federal antitrust scrutiny
Nov 13, 2012 (Star Tribune (Menafn - Minneapolis) - McClatchy-Tribune Information Services via COMTEX) --Federal antitrust regulators are taking a closer look at Ecolab's proposed 2.2 billion acquisition of Champion Technologies.
The Department of Justice (DOJ) has submitted a "second request" to St. Paul-based Ecolab for more information and documents on the Champion deal, Ecolab said Tuesday in a filing with federal securities regulators.
Second requests indicate government concern over potential anti-competitive issues, and they can eventually derail deals. However, Ecolab said in the securities filing it expects the Champion deal to close by the end of 2012.
"Ecolab has been and will continue to work cooperatively with the DOJ," the filing said. The company declined to elaborate on the second request beyond what was said in the securities filing.
Ecolab announced the acquistion of Houston-based Champion in October, a transaction that would greatly increase the St. Paul company's presence in the oil and gas market.
Champion makes chemicals for oilfield production. Ecolab is best known for making cleaning and sanitizing chemicals for restaurants, hotels and hospitals.
Second requests aren't common. They were issued in only 4.1 percent of merger transactions submitted to federal antitrust regulators during the government's most recent fiscal year, according to a June report by the DOJ and the Federal Trade Commission.
A second request can cover broad ground, or specific products or markets, said James Burns, a lawyer and anti-trust specialist at Dickinson Wright in Washington D.C.
With a second request, anti-trust regulators are essentially saying to a company, " 'We would like you to provide an additional amount of documents so we can drill down and analyze whether there is a competitive issue that we could challenge in court,' " Burns said.
It can be an expensive request for companies to comply with, and can entail significant delays, he said. Burns estimated that at least half of corporate mergers subject to second requests don't get completed.
Mike Hughlett --612-673-7003
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