The FTC is once again intruding into the marketplace by investigating The Vitamin Shoppe’s planned $50 million acquisition of Super Supplements, Inc. The specifics of the investigation are unclear because the FTC does not comment on investigations and Vitamin Shoppe’s brief statement concerning the investigation did not detail the reason for it, but stated that the companies are cooperating. It is possible, however, that this is a typical anti-trust investigation.
The FTC enforces federal antitrust laws pursuant to the Federal Trade Commission Act and the Clayton Act. Section 7 of the Clayton Act prohibits mergers and acquisitions that may have the effect of substantially lessening competition or the tendency to create a monopoly. According to FTC, the key question is whether the proposed merger or acquisition will likely create or enhance market power or aid its exercise.
If the investigation leads the Commission to believe that the proposed merger violates antitrust laws, it may ask the companies to enter into a “voluntary” consent order and agree to take steps outlined in the consent order to eliminate the anticompetitive nature of the proposed merger. If the companies do not agree to enter into a consent order, FTC could either pursue injunctive relief in the courts or issue an administrative complaint, both of which could prevent the acquisition.
The FTC investigation has delayed the expected completion date for the transaction by approximately two months, from December 31, 2012 to March 31, 2013. If the purchase goes through, Vitamin Shoppe will increase its presence in the Pacific Northwest because Super Supplements, Inc. has 31 stores in Washington, Oregon, and Idaho.
