Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: FTC approves two SCI applications to sell funeral assets in South Carolina and Maryland, (Jul 8, 2014)

By Linda O’Brien, J.D., LL.M.

The FTC has approved two applications by Service Corporation International (SCI) to sell certain funeral and cemetery assets in South Carolina and Maryland, according to a July 8 announcement. The divestiture is required under a consent order approved in December 2013 to settle charges that SCI’s acquisition of Stewart Enterprises was likely to substantially lessen competition.

According to the FTC complaint, (In re Matter of Service Corporation International, File No. 131-0163, Dkt. No. C-4423), SCI’s proposed acquisition of Stewart was likely to substantially reduce competition in violation of federal antitrust law in each of 59 local markets identified by the agency. The complaint alleged that each of these local markets for funeral and cemetery services was highly concentrated, and that the deal as proposed would eliminate direct competition between the two firms. The FTC charged that the proposed deal would enable the merged firm unilaterally to raise prices charged to consumers in these local markets and would substantially increase the risk of collusion between SCI and the few remaining competitors in the affected local areas.

The consent order required the combined SCI/Stewart to divest 53 funeral homes and 38 cemeteries to ensure that competition was maintained in 50 counties throughout the United States.

Through this action, the FTC has approved the divestiture of funeral home and cemetery properties in South Carolina to Rollings Funeral Services, Inc. and in Maryland to Edward Sagel Funeral Direction, Inc. The approval was given following a public comment period.

The Commission vote to approve both applications was 5-0.

Companies: Service Corporation International; Stewart Enterprises, Inc.; Rollings Funeral Services, Inc.; Edward Sagel Funeral Direction, Inc.

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