Federal court clears way for Giant, Western to merge

Nick Snow
Washington Correspondent

WASHINGTON, DC, May 30 -- A federal district court in New Mexico ruled against the US Federal Trade Commission and set the stage for Giant Industries Inc. and Western Refining Inc. to merge, the two companies said in a joint announcement.

In a May 29 order, US District Judge James O. Browning denied FTC's request for a preliminary injunction and dissolved an Apr. 13 temporary restraining order blocking the proposed combination.

"After analyzing the evidence the parties submitted concerning the relevant product market, the relevant geographic market, and the proposed merger's probable effect on competition in those markets, the court has determined that the order is not likely to create anticompetitive effects," Browning said.

He said FTC did not establish it would be able to prove that the merger would violate Section 7 of the Clayton Antitrust Act if the federal agency moved the matter to an administrative proceeding. "Specifically, the FTC has not convinced the court that there is a substantial likelihood it will prove the acquisition will result in a significant lessening of competition," Browning wrote.

Paul Foster, Western Refining's president and chief executive officer, said the court's ruling affirms that the merger "is procompetitive and provides important benefits to the companies' stakeholders, including our customers, shareholders, and employees."

FTC is appealing the decision, a spokesman said on May 30. The companies said in order to ensure an orderly process to a May 31 closing, they agreed with FTC not to close the merger before midday (MDT) on that day, but would feel free to do so after that time without a ruling from either the 10th Circuit Court of Appeals or US District Court.

Contact Nick Snow at [email protected].