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1
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ORDER TO MAINTAIN ASSETS
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EXTRACTED KEY WORDS
RESPONDENTS COMMISSION QUEST DIAGNOSTICS LABORATORY TESTING SERVICES CLINICAL LABORATORY TESTING UNILAB EMPLOYEES AGREEMENT FEDERAL TRADE COMMISSION ACQUISITION NORTHERN CALIFORNIA INTERIM MONITOR COMMISSION-APPROVED ACQUIRER CONFIDENTIAL BUSINESS INFORMATION PUBLIC RECORD DIVESTITURE UNITED STATES EMPLOYMENT LABCORP PURCHASE AGREEMENT OUTPATIENT CLINICAL LABORATORY PURCHASED ASSETS THEREAFTER COMPETITIVENESS CONSENT AGREEMENT SALES EMPLOYEES CUSTOMER-SPECIFIC INFORMATION PROVISIONS PSCS OBLIGATIONS |
0210140
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
COMMISSIONERS:
Timothy J. Muris, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
Thomas B. Leary
In the Matter of
QUEST DIAGNOSTICS INCORPORATED, a corporation, and
UNILAB CORPORATION, a corporation.
Docket No. C-4074
ORDER TO MAINTAIN ASSETS
(Public Record Version)
The Federal Trade Commission ("Commission"), having initiated an
investigation of the proposed acquisition by Respondent Quest
Diagnostics Incorporated ("Quest Diagnostics") of Respondent Unilab
Corporation ("Unilab"), hereinafter referred to as "Respondents," and
Respondents having been furnished thereafter with a copy of a draft of
Complaint that the Bureau of Competition proposed to present to the
Commission for its consideration and which, if issued by the
Commission, would charge Respondents with violations of Section 7 of
the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the
Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and
Respondents, their attorneys, and counsel for the Commission having
thereafter executed an Agreement Containing Consent Orders ("Consent
Agreement"), containing an admission by Respondents of all the
jurisdictional facts set forth in the aforesaid draft of Complaint, a
statement that the signing of said Consent Agreement is for settlement
purposes only and does not constitute an admission by Respondents that
the law has been violated as alleged in such Complaint, or that the
facts as alleged in such Complaint, other than jurisdictional facts,
are true, and waivers and other provisions as required by the
Commission's Rules; and
The Commission having thereafter considered the matter and having
determined that it had reason to believe that Respondents have
violated the said Acts, and that a Complaint should issue stating its
charges in that respect, and having determined to accept the executed
Consent Agreement and to place such Consent Agreement on the public
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2
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DECISION AND ORDER
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EXTRACTED KEY WORDS
COMMISSION QUEST DIAGNOSTICS TESTING SERVICES ASSETS LABORATORY TESTING SERVICES CLINICAL LABORATORY TESTING DIVESTITURE TRUSTEE ACQUISITION LABCORP PURCHASE AGREEMENT FEDERAL TRADE COMMISSION COMMISSION-APPROVED ACQUIRER TRADE COMMISSION ACT UNILAB NORTHERN CALIFORNIA EMPLOYEES INTERIM MONITOR PUBLIC RECORD OUTPATIENT CLINICAL LABORATORY PURCHASED ASSETS CONFIDENTIAL BUSINESS INFORMATION THEREAFTER OBLIGATIONS EMPLOYMENT COMPETITION FIREWALLED EMPLOYEES REPRESENTATIVES MINIMUM PRICE REAL PROPERTY PSCS LIMITATION |
0210140
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
COMMISSIONERS:
Timothy J. Muris, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
Thomas B. Leary
In the Matter of
QUEST DIAGNOSTICS INCORPORATED, a corporation; and
UNILAB CORPORATION, ) a corporation.
Docket No. C-
DECISION AND ORDER
(Public Record Version)
The Federal Trade Commission ("Commission"), having initiated an
investigation of the proposed acquisition by Respondent Quest
Diagnostics Incorporated ("Quest Diagnostics") of Respondent Unilab
Corporation ("Unilab"), hereinafter referred to as "Respondents," and
Respondents having been furnished thereafter with a copy of a draft of
Complaint that the Bureau of Competition proposed to present to the
Commission for its consideration and which, if issued by the
Commission, would charge Respondents with violations of Section 7 of
the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the
Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and
Respondents, their attorneys, and counsel for the Commission having
thereafter executed an Agreement Containing Consent Orders ("Consent
Agreement"), containing an admission by Respondents of all the
jurisdictional facts set forth in the aforesaid draft of Complaint, a
statement that the signing of said Consent Agreement is for settlement
purposes only and does not constitute an admission by Respondents that
the law has been violated as alleged in such Complaint, or that the
facts as alleged in such Complaint, other than jurisdictional facts,
are true, and waivers and other provisions as required by the
Commission's Rules; and
The Commission having thereafter considered the matter and having
determined that it had reason to believe that Respondents have
violated the said Acts, and that a Complaint should issue stating its
charges in that respect, and having thereupon issued its Complaint and
an Order to Maintain Assets, and having accepted the executed Consent
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3
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COMPLAINT
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EXTRACTED KEY WORDS
CLINICAL LABORATORY TESTING PHYSICIAN GROUPS MERGER QUEST MARKET UNILAB ACT PROPOSED MERGER RELEVANT MARKET RESPONDENT COMMISSION DIAGNOSTICS VIOLATION FTC BUSINESS CALIFORNIA COMMERCE COMPETITION FEDERAL TRADE COMMISSION CLAYTON ACT COMPLAINT HEALTH MERGER AGREEMENT TRANSACTION PRICE PATIENTS NORTHERN CALIFORNIA PRE-PAID HEALTH PLANS PROVISION |
0210140
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of
QUEST DIAGNOSTICS INCORPORATED, a corporation, and
UNILAB CORPORATION, a corporation. Docket No. C-4074
COMPLAINT
The Federal Trade Commission ("Commission"), having reason to believe
that Respondent Quest Diagnostics Incorporated ("Quest"), a
corporation subject to the jurisdiction of the Commission, has agreed
to merge with Respondent Unilab Corporation ("Unilab"), a corporation
subject to the jurisdiction of the Commission, in violation of Section
7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the
Federal Trade Commission Act ("FTC Act"), as amended, 15 U.S.C. § 45,
and it appearing to the Commission that a proceeding in respect
thereof would be in the public interest, hereby issues its Complaint,
stating its charges as follows:
I. DEFINITIONS
1. "Clinical laboratory testing services" means the full range of
products and services provided by a clinical laboratory, including,
but not limited to, the drawing, collection, and transportation of
specimens over a coordinated courier route system; stat, routine, and
esoteric clinical testing; the computerized tracking of specimens for
testing, record-keeping, and billing functions; and the electronic
communication of test results and other necessary data to customers.
2. "Physician group" means any group medical practice, individual
practice association, physician service organization, management
service organization, medical foundation, or physician/hospital
organization, that provides, or through which physicians contract to
provide, physician services to enrollees of pre-paid health plans.
3. "Respondents" means Quest and Unilab individually and collectively.
II. RESPONDENTS
4. Respondent Quest is a corporation organized, existing and doing
business under and by virtue of the laws of the State of Delaware,
with its office and principal place of business located at One Malcolm
Avenue, Teterboro, New Jersey 07608. Respondent Quest is engaged in,
among other things, the provision of clinical laboratory testing
services.
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4
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AGREEMENT CONTAINING CONSENT ORDERS
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EXTRACTED KEY WORDS
CONSENT AGREEMENT ASSETS COMMISSION COMPLAINT QUEST DIAGNOSTICS UNILAB CORPORATION REPORTS ACCEPTANCE BUSINESS LAW RELIEF FACTS DRAFT COMPETITION COMPLIANCE CONTEMPLATES COUNSEL PURSUANT COMMISSION RULE ACCOMPANYING DIVEST FEDERAL TRADE COMMISSION BUREAU MICHAEL APPENDICES PROCEEDING PUBLIC RECORD MANNER THEREAFTER |
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of
Quest Diagnostics Incorporated, a corporation,
and
Unilab Corporation, a corporation.
File No. 021 0140
AGREEMENT CONTAINING CONSENT ORDERS
The Federal Trade Commission ("Commission"), having initiated an
investigation of the proposed acquisition by Quest Diagnostics
Incorporated ("Quest Diagnostics") of Unilab Corporation ("Unilab"),
and it now appearing that Quest Diagnostics and Unilab, hereinafter
sometimes referred to as "Proposed Respondents," are willing to enter
into this Agreement Containing Consent Orders ("Consent Agreement") to
divest certain assets and providing for other relief:
IT IS HEREBY AGREED by and between Proposed Respondents, by their duly
authorized officers and attorneys, and counsel for the Commission
that:
1. Respondent Quest Diagnostics is a corporation organized,
existing and doing business under and by virtue of the laws of
the State of Delaware, with its office and principal place of
business located at One Malcolm Avenue, Teterboro, New Jersey,
07608.
2. Respondent Unilab is a corporation organized, existing and
doing business under and by virtue of the laws of the State of
Delaware, with its office and principal place of business
located at 18448 Oxnard St., Tarzana, CA, 91356.
3. Proposed Respondents admit all the jurisdictional facts set
forth in the draft of Complaint here attached.
4. Proposed Respondents waive:
(a) any further procedural steps;
(b) the requirement that the Commission's Order to
Maintain Assets and Decision and Order, attached hereto
and made a part hereof, contain a statement of findings
of fact and conclusions of law;
(c) all rights to seek judicial review or to otherwise
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5
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ANALYSIS
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EXTRACTED KEY WORDS
PHYSICIAN GROUPS NORTHERN CALIFORNIA QUEST ASSETS DIVESTITURE CLINICAL LABORATORY MARKET BUSINESS AGREEMENT COMPETITION UNILAB PROPOSED ACQUISITION COMMISSION HOSPITALS CONSENT AGREEMENT PLAN PATIENT CAPITATION STAT CONTRACTS MERGER PSCS HEALTH CARE PROVIDERS RELEVANT MARKET LABCORP UNITED STATES REQUIRING |
ANALYSIS OF AGREEMENT CONTAINING CONSENT ORDERS
TO AID PUBLIC COMMENT
Quest Diagnostics Incorporated and Unilab Corporation
File No. 021 0140, Docket No. C-4074
The Federal Trade Commission ("Commission") has accepted, subject to
final approval, an Agreement Containing Consent Order ("Consent
Agreement") from Quest Diagnostics Incorporated ("Quest") and Unilab
Corporation ("Unilab") (collectively "Respondents"). The Consent
Agreement is designed to remedy the anticompetitive effects resulting
from Quest's proposed acquisition of Unilab. The Consent Agreement
includes a proposed Decision and Order (the "Order"), which would
require the Respondents to divest to Laboratory Corporation of America
("LabCorp") assets used to provide clinical laboratory testing
services to physician groups in Northern California.
The Consent Agreement has been placed on the public record for thirty
(30) days for receipt of comments by interested persons. Comments
received during this period will become part of the public record.
After thirty (30) days, the Commission will again review the Consent
Agreement and the comments received, and will decide whether it should
withdraw from the proposed Consent Agreement or make it final.
Pursuant to an Agreement and Plan of Merger dated April 2, 2002
("Merger Agreement"), Quest proposes to acquire all of the issued and
outstanding voting securities of Unilab in exchange for cash, stock of
Quest, or a combination of cash and stock of Quest. The value of the
transaction was approximately $877 million at the time the Merger
Agreement was announced. On January 4, 2003, Quest and Unilab agreed
to amend the Merger Agreement to extend the termination date and to
reduce the purchase price for the overall transaction by approximately
$60 million. The Commission's complaint alleges that the proposed
acquisition, if consummated, would violate Section 7 of the Clayton
Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade
Commission Act, as amended, 15 U.S.C. § 45, in the market for
providing clinical laboratory testing services to physician groups in
Northern California.
The Merging Parties
Headquartered in Teterboro, New Jersey, Quest is the largest supplier
of clinical laboratory testing services in the United States, with a
nationwide network of 30 full-service laboratories located in major
metropolitan areas throughout the United States, approximately 100
smaller "stat," or rapid response, laboratories, and approximately
1,350 patient service centers ("PSCs"). Quest had sales of
approximately $4.1 billion in 2002. Quest's operations in Northern
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