Analysis Group Provides Support in Blocked Marine Company Merger
July 30, 2018
Analysis Group assisted the Federal Trade Commission (FTC) in its successful effort to block Wilhelmsen Maritime Services AS's proposed $400 million acquisition of Drew Marine Group Inc.
In February, the FTC sought a temporary restraining order and a preliminary injunction in federal court to block the deal from closing while the agency conducted an administrative trial to determine its legality. The FTC contended that the acquisition would diminish competition – with the combined entity commanding 85% of the market share for marine water treatment chemicals – and effectively create the only truly global supplier of these products. On July 21, following a three-week bench trial (FTC v. Wilhelm Wilhelmsen, et al.), US District Judge Tanya S. Chutkan issued a sealed opinion granting the FTC's motion for an injunction.
Analysis Group Managing Principal Dov Rothman testified that the cost efficiencies projected by Wilhelmsen could not be verified, and that many of the projected cost efficiencies would not be merger-specific. Dr. Rothman also addressed the extent to which any verifiable and merger-specific cost efficiencies would have affected the merged firm's pricing incentives. Following the decision, Wilhelmsen Maritime announced that it will abandon the transaction and pay a termination fee of $20 million to Drew Marine.
Supporting Dr. Rothman were a team of economists from Analysis Group, led by Managing Principal Aaron Yeater, with Associates Philipp Tillmann and Alex Robinson.