Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: FTC settlement allowing Graco’s acquisition of ITW finishing equipment business modified, (Oct 6, 2014)

By Jody Coultas, J.D.

More than two years after announcing a proposed consent order settling charges that equipment manufacturer Graco Inc.’s $650 million acquisition of certain finishing equipment businesses of Illinois Tool Works was anticompetitive, the FTC has issued a modified final order (In the Matter of Graco Inc., Illinois Tool Works Inc., and ITW Finishing LLC, FTC Dkt. 9350).

The FTC alleged that Graco and ITW violated Section 7 of the Clayton Act and Section 5 of the Federal Trade Commission Act based on Graco’s proposed acquisition of ITW’s finishing equipment businesses.

Under a proposed settlement reached in 2012, the FTC allowed Graco to complete its acquisition, but required Graco to hold separate several ITW businesses until those assets were divested. Based on additional information provided during the public comment period, the FTC required Graco to agree to modifications to the proposed consent order.

The modified final order adding provisions concerning an existing supply agreement for disposable paint cups and lids, which, if terminated, could have undermined the effectiveness of the divestiture in preserving competition in the market relating to the manufacture and sale of industrial liquid finishing equipment; and the allocation of intellectual property assets for certain powder finishing products.

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