Dec 23 The largest U.S. provider of funeral and
cemetery services has agreed to sell some of its assets to
resolve federal charges that a proposed $1.4 billion deal to buy
a smaller rival would substantially lessen competition in the
Houston-based Service Corp International in May
announced a deal to buy Stewart Enterprises Inc.
SCI owns and operates more than 1,449 funeral-services
locations and 374 cemeteries, including 213 combined
funeral-services/cemetery locations, as well as 100 crematories,
according to the U.S. Federal Trade Commission, which announced
the terms on Monday.
Stewart is the second-largest funeral and cemetery services
provider in the nation, with 217 funeral homes and 141
cemeteries in 24 states and Puerto Rico.
Although the two firms together now have only about 16
percent of the U.S. market, in certain communities their market
share would be more dominant according to the FTC, which works
with the U.S. Justice Department to ensure that mergers comply
with antitrust law.
The Commission said the proposed tie-up was likely to
substantially reduce competition in 59 local markets by
eliminating direct competition between the two firms.
That, in turn, would allow the merged firm to unilaterally
raise prices, and also increased the risk of collusion between
SCI and its few remaining competitors, the FTC said.
The proposed order settling the FTC's charges requires SCI
and Stewart to sell the 53 funeral homes and 38 cemeteries to
Commission-approved buyers within 180 days, and establishes
various other conditions.
The agreement will be subject to a public comment period
lasting through Jan. 22.