Alerts

FTC Requires Divestiture In Consummated Transaction Based On The Same Manager Obtaining Control Of Competing Companies Through Two Different Limited Partnerships

August 30, 2006

On August 18, 2006, the Federal Trade Commission ("FTC") required a divestiture in a consummated transaction in which the "manager" of a limited partnership that owned a company in the energy business gained control of a competing company through a second limited partnership. Even though the two different limited partnerships appeared to have had different investors, the FTC treated the acquisition at issue as a combination of the companies owned by the limited partnerships because both partnerships had the same ultimate manager. The FTC did so because of the manager's control over both companies. Viewing the transaction this way, the FTC believed that the deal was anticompetitive and ordered divestiture.