There are some mergers which obviously need to be blocked. After all, if a company becomes a monopoly or can become far more predatory in an industry then it can cause problems for other businesses or for consumers. But what happens when small acquisitions are blocked?
The Procter & Gamble Company (NYSE: PG) is among the largest companies in America with a market capitalization of more than $300 billion. It’s obvious that it should not be allowed to acquire on of the other larger consumer products players. But what about a small company that most people have not even heard of?
The Federal Trade Commission has announced that it is moving to block the proposed acquisition of Billie Inc. and the trial date for the suit is now set out in June of 2021.
P&G had announced the planned acquisition back in January of 2020. At the time, it noted that Billie is a subscription-based brand that has a direct-to-consumer model that offers quality shaving supplies and premium body care products to women.
The product portfolio of Billie is razors, shaving cream, body wash and body lotion. Also at that time, P&G noted that the combination would strengthen P&G’s grooming business and accelerate growth for Billie, as well as to fuel the development of additional products designed specifically for women.
Billie is a maker of women’s razors and body care products. The administrative complaint and coming federal suit to halt the acquisition alleged that P&G would be able to eliminate growing competition that currently benefits consumer.
Ian Conner, Director of the FTC’s Bureau of Competition, said of the move:
Billie saw an opportunity to challenge P&G’s position as the market leader by finding underserved, price and quality conscious customers, and building an innovative brand. As its sales grew, Billie was likely to expand into brick-and-mortar stores, posing a serious threat to P&G. If P&G can snuff out Billie’s rapid competitive growth, consumers will likely face higher prices.
The FTC’s announcement further stated:
The complaint alleges that the proposed acquisition would eliminate substantial and growing head-to-head competition between P&G and nascent competitor Billie in U.S. wet shave razor markets. In particular, as Billie grew rapidly, P&G introduced its own direct-to-consumer site promoting its women’s system razor brand, Venus. The proposed acquisition also halted Billie’s anticipated expansion into brick-and-mortar retail stores, which would have benefitted consumers through intensified competition between Billie and P&G at retail locations.
P&G’s stock was not hurt by the FTC action because the transaction is small. Its stock was last seen up 0.25 at $137.95 on Tuesday before the close of trading. Its 52-week trading range is $94.34 to $146.92.
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