Wednesday, May 30, 2007
Posted by D. Daniel Sokol
The district court for the district of New Mexico just came out with a decision in the Western-Giant proposed merger, which the FTC attempted to block. The case is available below.
Key language from the opinion (which I suspect that the FTC will not appeal) includes the following:
By acquiring Giant’s New Mexico refining, terminaling, and marketing assets, Western will not be eliminating an important restraint on its ability to raise prices and increase margins. Other firms can replace the competitive void -- if any -- left by Giant’s elimination. Western’s position in relatively concentrated markets does not significantly increase the likelihood that Western has achieved, or will be able to exercise, market power, either in coordination with other firms or unilaterally... The effect of the merger will not likely be to increase prices. Entry is likely if prices move up, and withdrawal is likely if prices move down... The merger will not dramatically increase concentration in the relevant market.