Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Combination of fixed base operators conditioned in Scottsdale airport divestitures, (Jul 30, 2014)

By Jeffrey May, J.D.

Landmark Aviation, which operates a network of fixed base operations in North America and Western Europe, has received Department of Justice Antitrust Division approval to proceed with its $330 million acquisition of smaller rival Ross Aviation. The Antitrust Division conditioned the acquisition on the divestiture of fixed base operator assets (FBOs) used to provide flight support services to general aviation customers at Scottsdale Municipal Airport (SDL) in Arizona (U.S. v. LM U.S. Corp Acquisition Inc., Civil Action No. 1:14-cv-01291).

Landmark and Ross are the only two providers of FBO services at Scottsdale Municipal Airport, according to a complaint filed by the Antitrust Division today in the federal district court in Washington, D.C. The complaint defines the relevant market as the market for FBO services to general aviation customers at SDL. Landmark was identified as the third largest FBO provider in the United States. The government alleged that the proposed transaction would have resulted in a monopoly for FBO services at SDL and that loss of competition likely would have resulted in higher prices and a lower quality of services.

Under the terms of a proposed consent decree intended to resolve the government's antitrust concerns, Landmark would be required to divest Ross’s FBO assets at Scottsdale Municipal Airport to either Signature Flight Support Corp. or another buyer approved by the Antitrust Division. Signature Flight Support is reported to be the world’s largest network of FBOs with more than 115 locations.

The settlement also would require Landmark to notify the Antitrust Division if it plans to acquire FBO assets at an airport where it already provides such services. The advance notification obligation does not apply where the assets are valued at less than $20 million or where at least one full-service FBO that is not involved in the transaction is present.

Landmark disclosed the proposed acquisition in April. At that time, Landmark president and CEO Dan Bucaro described the Ross network as “complementary” and said that the transaction would extend the Landmark network to key U.S. airports. Ross has a total of 19 FBO operations at airports in Denver (BJC), Santa Fe (SAF), Miami (OPF), Hawaii, and elsewhere. Landmark currently has 57 locations.

Attorneys: Michelle A. Pionkowski for Department of Justice Antitrust Division. E. Marcellus Williamson (Latham & Watkins LLP) for LM U.S. Corp. Acquisition, Inc. Paul T. Denis (Dechert LLP) for Ross Aviation LLC.

Companies: LM U.S. Corp. Acquisition, Inc.; Ross Aviation LLC; Signature Flight Support Corp.

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