US Trade Commission Opposes Wilhelmsen’s Acquisition of Drew Marine Group
- Business & Finance
The United States’ Federal Trade Commission (FTC) has filed a complaint opposing Wilhelmsen Group’s planned acquisition of Drew Marine Group.
The acquisition plan was announced in April 2017 when Wilhelmsen Maritime Services AS, part of Norwegian Wilhelmsen Group, said it had signed an agreement to acquire the technical solutions business from Drew Marine, subject to regulatory approval.
“Wilhelmsen Maritime Services’ proposed USD 400 million acquisition of Drew Marine Group would violate the antitrust laws by significantly reducing competition in an important market for marine water treatment chemicals and services used by global fleets,” FTC said.
Namely, as explained by FTC, the companies are each other’s closest competitors on numerous competitive dimensions including product scope, quality and consistency; technical service capability; and global distribution footprint.
According to the complaint, head-to-head competition between Wilhelmsen and Drew provides substantial benefits to global fleets in the form of lower prices and better service.
The FTC alleges that if consummated, the merger would result in a company controlling at least 60 percent of the global marine water treatment chemical and service market. The next closest competitor represents an inferior choice for global fleets, and would control less than 5 percent of the market according to the complaint.
The FTC also authorized staff to seek in federal court a temporary restraining order and a preliminary injunction to prevent the parties from consummating the merger, and to maintain the status quo pending the administrative proceeding.
Commenting on FTC’s move, Wilhelmsen said that it disagrees with the FTC’s evaluation and that it will continue to work towards a positive outcome.
A ruling is expected later this year.