Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS—D.D.C: Consent decree allowing tie-up of aviation services providers approved, (Jun 15, 2016)

By Jeffrey May, J.D.

The federal district court in Washington, D.C. has approved a consent decree, resolving the Department of Justice Antitrust Division's concerns over BBA Aviation plc’s $2.065 billion acquisition of Landmark Aviation. Under the terms of the consent decree, BBA, the parent company of Signature Flight Support, was required to divest fixed base operator assets (FBOs) at six U.S. airports in an effort to maintain an independent and economically viable competitor at each of the these airports. BBA completed the acquisition in February shortly after the settlement was announced (U.S. v. BBA Aviation plc, June 9, 2016, Jackson, A.).

In its February 2016 complaint, the government alleged that, without the divestitures, the acquisition would likely substantially lessen competition for full-service FBO services at Washington Dulles International Airport (IAD), outside Washington, D.C.; Scottsdale Municipal Airport (SDL), in Scottsdale, Arizona; Fresno Yosemite International Airport (FAT), in Fresno, California; Jacqueline Cochran Regional Airport (TRM), in Thermal, California; Westchester County Airport (HPN), in White Plains, New York; and Ted Stevens Anchorage International Airport (ANC), in Anchorage, Alaska. An FBO is a commercial business that is granted the right by a local airport authority to sell fuel and provide related support services to general aviation customers, including charter, private, and corporate aircraft operators.

United Kingdom-based BBA operates in the United States through its subsidiary Signature Flight Support. Signature Flight Support has the largest FBO network in the world. At the time the settlement was announced, it owned or operated approximately 70 FBO facilities in the United States. U.S.-based Landmark was the third-largest FBO network in the United States, with more than 60 FBO facilities.

The consent decree requires BBA to divest Landmark’s FBO assets at each of the six impacted airports to a buyer approved by the Antitrust Division. In March, BBA announced that it would sell the divestiture facilities for $190 million to affiliates of U.S. private equity firm KSL Capital Partners, LLC. KSL intended to partner with Jeffrey Ross, the former president and CEO of Ross Aviation, who will manage the Divestiture Assets following the closing of the transaction, according to the BBA announcement.

This is Case No. 1:16-cv-00174-ABJ.

Attorneys: Patricia L. Sindel for Department of Justice. Steven L. Bradley Paul Smith (Sullivan & Cromwell LLP) for BBA Aviation plc. David P. Wales (Jones Day) for Landmark US Corp.

Companies: BBA Aviation plc; KSL Capital Partners, LLC; Landmark U.S. Corp. LLC; Signature Flight Support Corp.

Cases: AcquisitionsMergers Antitrust AntitrustDivisionNews