Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC approves Tesoro’s application to sell Boise terminal business, (Mar 5, 2014)

The FTC has approved an application by Tesoro Corporation and its subsidiary, Tesoro Logistics Operations LLC, to sell its terminal business for light petroleum products and related assets in Boise, Idaho, to Sinclair Transportation Company. The divestiture is required under a final consent order approved in August 2013 to settle charges that Tesoro’s acquisition of Chevron Corporation’s Northwest Products Pipeline assets was likely to substantially lessen competition (In re Matter of Tesoro Corp., File No. 131-0052, Dkt. C-4405).

In December 2012, Tesoro agreed to buy the Northwest Products Pipeline system and Chevron’s associated terminals, including the one in Boise, for $355 million. According to the FTC complaint filed in June 2013, the transaction as originally proposed would have likely led to higher prices to consumers by giving Tesoro ownership of two of the three full service light petroleum terminals in Boise, significantly reducing competition for local terminal services. Tesoro’s divestiture to Sinclair will restore the competition lost through its acquisition of the Chevron assets.

In response to one public comment expressing concerns of increasing concentration in the Boise gasoline market, the FTC noted that the purpose of the divestiture is to restore competition in the market for terminal services for light petroleum products in the Boise area. Thus, the relevant market in this instance is not the general gasoline market. In evaluating Tesoro’s Application, the Commission reviewed the purchaser’s ability to manage and operate a light petroleum products terminal business, its financial resources, and whether the acquisition would create additional competitive issues in the relevant market.

News: Antitrust FederalTradeCommissionNews