Business & Tech

FTC Makes Official Ruling on Giant-Genuardi's Transaction

The Federal Trade Commission will require Ahold, Giant's parent company, to sell the Newtown Genuardi's to McCaffrey's.

The Federal Trade Commission today made public its ruling on Giant’s proposed acquisition of more than a dozen Genuardi’s supermarkets in the Philadelphia region.

The FTC will require Ahold, Giant’s parent company, to sell the Newtown Genuardi’s to McCaffrey’s. The sale of the Newtown store, which was initially part of the 16-store deal, will settle charges that Giant’s proposed acquisition of the Genuardi's supermarket chain otherwise would be anticompetitive, an FTC press release said.

According to the FTC's complaint, Ahold's acquisition of Genuardi's would violate the FTC Act and Section 7 of the Clayton Act. Specifically, the FTC alleges that it would reduce the number of supermarket competitors in Newtown from three to two, with Giant and Acme being the only remaining retail grocery stores.

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“The Newtown market is already highly concentrated and would become significantly more so post-acquisition," according to the FTC release. The transaction, if completed, would eliminate competition between Giant and Genuardi's, allowing the combined firm to raise prices unilaterally, the release went on to say.

The transaction also would increase the likelihood that Giant and Acme would be able to tacitly or expressly work together to raise prices or otherwise reduce competition in a way that would harm local consumers, the FTC press release said.

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Ahold has agreed to sell the Newtown store to McCaffrey's, which the FTC considers well-positioned to enter the market to replace the competition that otherwise would have been lost through the transaction, the FTC press release said.

Under the proposed order, Ahold must sell the Newtown Genuardi's supermarket to McCaffrey's no later than 10 days after it acquires the 16 stores covered by the asset purchase agreement. The proposed order also contains other provisions designed to ensure the sale to McCaffrey's is successful.

For example, for one year, Ahold is prohibited from interfering with McCaffrey's hiring or employing anyone currently working at the Newtown Genuardi's, the release said.

Also, for 10 years, Ahold must notify the FTC in advance if it plans to acquire a supermarket, or any interest in a supermarket, in Newtown.

The commission vote to accept the consent agreement package containing the proposed consent order for public comment was 5-0. 

The agreement will be subject to public comment for 30 days, beginning today and continuing through July 16, after which the commission will decide whether to make the proposed consent order final.

Interested parties can submit written comments electronically or in paper form by following the instructions in the "Invitation To Comment" part of the "Supplementary Information" section.

Comments can be submitted electronically by clicking here. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. 


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