Many students—and even adults who are no longer taking classes—enjoy the annual ritual of stocking up on fresh new school supplies. But two companies that make such products—3M Co. and Avery Dennison Corp.—have the back-to-school blues.
In January, 3M Co., which makes Post-it notes, Scotch tape and other office and school supplies, announced its plan to take over Avery Dennison Corp., which manufactures labels, binders, highlighters and other products. But the Department of Justice (DOJ) took issue with the proposed all-cash $550 million merger and threatened to file an antitrust lawsuit against the companies if they didn’t abandon the deal, which would have given 3M more than 80 percent of the U.S. market for labels and sticky notes. Yesterday the DOJ announced the companies would drop the deal.
“The proposed acquisition would have substantially lessened competition in the sale of labels and sticky notes, resulting in higher prices and reduced innovation for products that millions of American consumers use every day,” the DOJ said yesterday.
The DOJ’s legal threats against 3M and Avery reflect the Obama administration’s increased antitrust enforcement. Last November, a federal judge rejected a merger between H&R Block and TaxAct, agreeing with the DOJ that the deal would harm competition in the market for digital tax-preparation services. And a month later, AT&T dropped its bid to acquire T-Mobile USA after the DOJ sued to block the deal between the two communications companies.
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