A federal judge in Santa Ana, Calif., declined to issue a preliminary injunction blocking Laboratory Corporation of America's acquisition of Westcliff Medical Laboratories pending the outcome of an antitrust challenge by the Federal Trade Commission.
Judge won't block LabCorp acquisition
The FTC filed an administrative complaint Dec. 1, 2010, alleging that the $57.5 million deal for the Santa Ana, Calif., company would harm competition for lab services in Southern California, leaving Burlington, N.C.-based LabCorp and Quest Diagnostics performing most lab tests for physician groups in the region.
U.S. District Judge Andrew Guilford, however, concluded that the FTC neither showed a likelihood of winning its case nor that the public benefit of delaying the deal in the meantime would be worth the harm to the parties involved. Citing the FTC’s reputation for taking years to resolve administrative cases, Guilford quotes another judge’s observation that “the grant of a temporary injunction in a government antitrust suit is likely to spell the doom of an agreed merger.”
Richard Feinstein, director of the FTC’s Bureau of Competition, said in a written statement that the FTC is considering its options and continues “to believe the proposed acquisition will harm competition, resulting in higher prices and lower quality for Southern California consumers of clinical laboratory services.”
The deal was completed June 16 but LabCorp agreed to hold Westcliff’s operations separate during the FTC’s investigation. Guilford’s ruling dissolves a temporary restraining order that continued to hold them separate in light of the FTC’s challenge.
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