Jun

21

Posted by : Matthew Wild | On : June 21, 2008

On May 28, 2008, the Antitrust Division required divestitures as a condition of its approval of Cengage Holdings’ $750 million proposed acquisition of Houghton Mifflin College Division. Both companies publish college textbooks. The Antitrust Division defined the relevant product market as textbooks in courses on particular subject matters. The Antitrust Division alleged that students had no significant alternatives to new textbooks in these courses because, for example, used textbooks are not consistently available in large numbers. The Antitrust Division limited the relevant geographic market to the United States but did not explain why foreign publishers could not compete effectively. The Antitrust Division calculated that in 14 overlapping courses, the minimum post-merger HHI would be 3,000 with a delta of 500. The Antitrust Division concluded that high barriers to entry exist because instructors infrequently switched textbooks and therefore it would be unlikely that a publisher would invest in the authors and editorial staff necessary to write a new textbook. The Antitrust Division’s Press Release and Competitive Impact Statement are attached. DOJ Press Release (Cengage/Houghton Mifflin); Competitive Impact Statement (Cengage/Houghton Mifflin).

May

05

Posted by : Matthew Wild | On : May 5, 2008

On April 30, 2008, the Antitrust Division conditioned its approval of an acquisition by Regal Cinemas, Inc. of Consolidated Theater Holdings GP on divestitures in Southern Charlotte, Northern and Southern Raleigh and Asheville. On January 14, 2008, Regal — with $2.6 billion in revenue last year — agreed to acquire Consolidated — with $144 million in revenue last year — for $210 million. The Antitrust Division alleged a product market of the exhibition of first-run commercial movies. With respect to the geographic markets, the Antitrust Division alleged that moviegoers in Southern Charlotte, Northern and Southern Raleigh and Asheville would be unlikely to travel a significant difference in response to a small but significant non-transitory increase in price. The relevant markets were highly concentrated with HHIs ranging from 6058 to 6523 and deltas exceeding 2,000 except for Southern Raleigh where the transaction would be a merger to monopoly. The Antitrust Division also alleged high entry barriers because the demographics of these geographic markets would not support the sunk costs associated with opening a new theater. Attached are the DOJ Press Release and Competitive Impact Statement. Regal (DOJ Press Release); Regal (Competitive Impact Statement)