FTC Clears $3.15B Emerson-Pentair Deal

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By Alexei Alexis

The Federal Trade Commission cleared Emerson Electric Co.’s proposed $3.15 billion acquisition of Pentair Plc with divestiture conditions to resolve antitrust concerns, the agency announced April 28.

St. Louis-based Emerson and London-based Pentair are the two largest manufacturers of industrial devices known as switchboxes, with a combined market share of approximately 60 percent in the U.S., the commission said.

The settlement resolves the third FTC merger enforcement action under President Donald Trump. The current two-member commission has also resolved antitrust concerns over China National Chemical Corp.'s agreement with Syngenta AG and Enbridge Inc.'s bid for Spectra Energy Corp. Both of those tie-ups were also approved with conditions.

Emerson, a leading manufacturer of industrial valves, has agreed to sell Pentair subsidiary Westlock Controls Corp. in order to proceed with the proposed merger. An Emerson spokesman said Westlock’s annual sales are less than $40 million.

The deal would otherwise harm competition by substantially increasing concentration in the U.S. market for switchboxes, which are devices used to monitor and control valves that regulate the flow of liquids and gases in industrial facilities, according to the FTC.

Other manufacturers of switchboxes have significantly lower market shares than Emerson or Pentair, and most have very small market shares, the agency said.

Under the terms of the settlement, Emerson must divest Westlock to Crane Co. within 10 days of the proposed acquisition. Crane must be provided all of Westlock’s production facilities, intellectual property, confidential business information, and the opportunity to hire Westlock employees.

Crane is not currently a competitor in the U.S. switchbox market, according to the FTC.

To contact the reporter on this story: Alexei Alexis in Washington at aalexis@bna.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bna.com

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