Antitrust Law Daily Wrap Up, TOP STORY: Combination of class ring makers dropped in face of FTC challenge, (Apr 17, 2014)

By Jeffrey May, J.D.

Jostens, Inc. has dropped plans to acquire American Achievement Corporation in light of the FTC’s decision to block the combination of the high school and college class ring sellers (In the Matter of Visant Corp., FTC Dkt. 9362, File No. 141 0033).

The FTC voted today to seek a preliminary injunction in federal court to halt the approximately $500 million deal between Visant Corporation and its Jostens subsidiary and American Achievement Corporation (AAC). In addition to selling class rings, Jostens distributes school yearbooks and other scholastic products. AAC is the parent company of class ring suppliers Balfour and ArtCarved, as well as other commemorative jewelry and recognition product distributors.

While the FTC did not release a copy of its administrative complaint, according to the agency, the Part III complaint alleged that a combined Jostens/AAC would control an unduly high percentage of the high school and college rings markets, making it a dominant firm with only one smaller meaningful competitor in both markets. Jostens’ acquisition of AAC would have eliminated head-to-head competition between the two companies, allowing the combined firm to raise prices, while reducing the incentives to provide better quality and service to students and make it easier for the two remaining competitors to coordinate, the FTC announced.

FTC Bureau of Competition Director reaction. “The parties’ abandonment of the transaction preserves competition for consumers in the markets for class rings, which are an important memento for millions of high school and college graduates across the country,” said FTC Bureau of Competition Director Deborah Feinstein. “A combination of two of the three leading manufacturers would have led to higher prices and lower quality for the students and their parents who purchase these rings.”

Jostens statement. Noting that the company “fundamentally disagree[s] with the basis on which the FTC made its decision,” Visant President and Chief Executive Officer Marc Reisch said in a statement that the deal was dropped to avoid “protracted litigation with the FTC.” According to Reisch, “based on current industry dynamics the combination would not have an adverse effect on competition and … the significant synergies and operating efficiencies from the proposed transaction would contribute to the competitive landscape.”

Companies: American Achievement Corp., Jostens, Inc., Visant Corp.

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