FTC Seeks to Block Wilhelmsen-Drew Marine Merger
On Friday, the Federal Trade Commission said that it will seek an injunction to halt Wilhelmsen Maritime Services' acquisition of maritime supplier Drew Marine Group. The FTC asserted that the $400 million merger would "violate the antitrust laws by significantly reducing competition in an important market for marine water treatment chemicals." The FTC is seeking a court order to prevent the merger from going ahead until after an administrative trial, which is set to begin on July 24.
Norway-based Wilhelmsen is the world’s largest supplier of shipboard water treatment chemicals, and it offers a wide range of accompanying technical services. New Jersey-based Drew Marine is the second-largest. The FTC says that the companies are each other’s closest competitors in product scope, quality and consistency; technical service capability; and global distribution footprint.
According to the complaint, head-to-head competition between Wilhelmsen and Drew provides benefits to shipowners in the form of lower prices and better service. The FTC alleges that the merger would result in limited competition, with a single company controlling at least 60 percent of the global marine water treatment chemical and service market. The next-closest competitor would control less than 5 percent of the market.
In a statement, Wilhelmsen said that it did not agree with the FTC's complaint. "This is standard procedure in cases where the FTC considers that a proposed transaction will substantially lessen competition," Wilhelmsen said. "Wilhelmsen disagrees with the FTC's evaluation and will continue to work towards a positive outcome."