Mars, Incorporated and VCA Inc.; Analysis To Aid Public Comment, 42552-42554 [2017-19044]

Download as PDF 42552 Federal Register / Vol. 82, No. 173 / Friday, September 8, 2017 / Notices Executive Director, Federal Accounting Standards Advisory Board, 441 G Street NW., Suite 6814, Mailstop 6H19, Washington, DC 20548. FOR FURTHER INFORMATION CONTACT: Ms. Wendy M. Payne, Executive Director, 441 G Street NW., Mailstop 6H19, Washington, DC 20548, or call (202) 512–7350. Authority: Federal Advisory Committee Act, Pub. L. 92–463. Board of Governors of the Federal Reserve System, September 5, 2017. Yao-Chin Chao, Assistant Secretary of the Board. Dated: September 5, 2017. Wendy M. Payne, Executive Director. [FR Doc. 2017–19066 Filed 9–7–17; 8:45 am] [FR Doc. 2017–19062 Filed 9–7–17; 8:45 am] BILLING CODE 6210–01–P BILLING CODE 1610–02–P FEDERAL TRADE COMMISSION FEDERAL RESERVE SYSTEM [File No. 171–0057] sradovich on DSK3GMQ082PROD with NOTICES Formations of, Acquisitions by, and Mergers of Bank Holding Companies The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) (BHC Act), Regulation Y (12 CFR part 225), and all other applicable statutes and regulations to become a bank holding company and/or to acquire the assets or the ownership of, control of, or the power to vote shares of a bank or bank holding company and all of the banks and nonbanking companies owned by the bank holding company, including the companies listed below. The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States. Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than October 4, 2017. A. Federal Reserve Bank of San Francisco (Gerald C. Tsai, Director, Applications and Enforcement) 101 Market Street, San Francisco, California 94105–1579: 1. Carpenter Bank Partners, Inc., CCFW, Inc., Carpenter Fund Manager VerDate Sep<11>2014 17:18 Sep 07, 2017 GP, LLC, Carpenter Fund Management Company, LLC, Carpenter Community BancFund, L.P., Carpenter Community BancFund-A, L.P., and Carpenter Community BancFund-CA, L.P., all of Irvine, California: to acquire approximately 11.2 percent of Pacific Premier Bancorp and indirectly acquire Pacific Premier Bank, both of Irvine, California. Jkt 241001 Mars, Incorporated and VCA Inc.; Analysis To Aid Public Comment Federal Trade Commission. Proposed consent agreement. AGENCY: ACTION: The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders—embodied in the consent agreement—that would settle these allegations. DATES: Comments must be received on or before September 29, 2017. ADDRESSES: Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write: ‘‘In the Matter of Mars, Incorporated and VCA Inc., File No. 171–0057’’ on your comment, and file your comment online at https:// ftcpublic.commentworks.com/ftc/ marsvcaconsent by following the instructions on the web-based form. If you prefer to file your comment on paper, write ‘‘In the Matter of Mars, Incorporated and VCA Inc., File No. 171–0057’’ on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. FOR FURTHER INFORMATION CONTACT: Michael Barnett (202–326–2362), SUMMARY: PO 00000 Frm 00013 Fmt 4703 Sfmt 4703 Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580. Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for August 30, 2017), on the World Wide Web, at https:// www.ftc.gov/news-events/commissionactions. You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before September 29, 2017. Write ‘‘In the Matter of Mars, Incorporated and VCA Inc., File No. 171–0057’’ on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at https://www.ftc.gov/policy/ public-comments. Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at https:// ftcpublic.commentworks.com/ftc/ marsvcaconsent by following the instructions on the web-based form. If this Notice appears at http:// www.regulations.gov/#!home, you also may file a comment through that Web site. If you prefer to file your comment on paper, write ‘‘In the Matter of Mars, Incorporated and VCA Inc., File No. 171–0057’’ on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your paper comment to the SUPPLEMENTARY INFORMATION: E:\FR\FM\08SEN1.SGM 08SEN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 82, No. 173 / Friday, September 8, 2017 / Notices Commission by courier or overnight service. Because your comment will be placed on the publicly accessible FTC Web site at https://www.ftc.gov, you are solely responsible for making sure that your comment does not include any sensitive or confidential information. In particular, your comment should not include any sensitive personal information, such as your or anyone else’s Social Security number; date of birth; driver’s license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, your comment should not include any ‘‘trade secret or any commercial or financial information which . . . is privileged or confidential’’—as provided by Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)— including in particular competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names. Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled ‘‘Confidential,’’ and must comply with FTC Rule 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c). Your comment will be kept confidential only if the General Counsel grants your request in accordance with the law and the public interest. Once your comment has been posted on the public FTC Web site—as legally required by FTC Rule 4.9(b)—we cannot redact or remove your comment from the FTC Web site, unless you submit a confidentiality request that meets the requirements for such treatment under FTC Rule 4.9(c), and the General Counsel grants that request. Visit the FTC Web site at http:// www.ftc.gov to read this Notice and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding, as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before September 29, VerDate Sep<11>2014 17:18 Sep 07, 2017 Jkt 241001 2017. For information on the Commission’s privacy policy, including routine uses permitted by the Privacy Act, see https://www.ftc.gov/siteinformation/privacy-policy. Analysis of Agreement Containing Consent Order To Aid Public Comment The Federal Trade Commission (‘‘Commission’’) has accepted, subject to final approval, an Agreement Containing Consent Orders (‘‘Consent Agreement’’) with Mars, Incorporated (‘‘Mars’’), which is designed to remedy the anticompetitive effects that would result from Mars’ proposed acquisition of VCA Inc. (‘‘VCA’’). Pursuant to an Agreement and Plan of Merger announced January 9, 2017, Mars proposes to acquire all of the assets of VCA in a transaction valued at approximately $9.1 billion (the ‘‘Acquisition’’). Both parties provide specialty and emergency veterinary services in clinics they operate in cities across the United States. The Commission alleges in its Complaint that the 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, by lessening competition in the markets for certain specialty and emergency veterinary services in ten different localities in the United States. The proposed Consent Agreement will remedy the alleged violations by preserving the competition that would otherwise be eliminated by the Acquisition. Specifically, under the terms of the Consent Agreement, Mars is required to divest twelve clinics. Mars and VCA have proposed National Veterinary Associates (‘‘NVA’’), PetVet Care Centers (‘‘PetVet’’), and Pathway Partners Vet Management Company (‘‘Pathway’’) as buyers of these clinics. The proposed Consent Agreement has been placed on the public record for 30 days for receipt of comments from interested persons. Comments received during this period will become part of the public record. After 30 days, the Commission will review proposed Consent Agreement and comments received, and decide whether it should withdraw, modify, or make the Consent Agreement final. II. The Relevant Markets and Market Structures The relevant lines of commerce in which to analyze the Acquisition are individual specialty and off-hours emergency veterinary services. Specialty veterinary services are required in cases that a general practitioner veterinarian cannot treat properly. General PO 00000 Frm 00014 Fmt 4703 Sfmt 4703 42553 practitioner veterinarians commonly refer such cases to a specialist, typically a doctor of veterinary medicine board certified in the required specialty. Individual veterinary specialties include cardiology, critical care, internal medicine, neurology, oncology, ophthalmology, and surgery. Emergency veterinary services are used in acute situations where a general practice veterinarian is not available or in some cases not trained or equipped to treat the animal’s medical problem. The relevant areas for the provision of specialty and off-hours emergency veterinary services are local, delineated by the distance and time that pet owners travel to receive treatment. The distance and time customers travel for specialty services are highly dependent on local factors such as the proximity of a clinic offering the required specialty service, population density, population demographics, traffic congestion, or specific local geographic barriers. The markets affected by the transaction differ by area. The localities and services at issue are: a. Oncology in western suburbs of Chicago, IL; b. Emergency in Corpus Christi, TX; c. Critical Care, Emergency, Internal Medicine, and Surgery in Kansas City, MO; d. Critical Care and Emergency in Mesa, AZ; e. Critical Care and Oncology in northern New York City, NY and its northern suburbs; f. Critical Care, Internal Medicine, Neurology, Oncology, and Ophthalmology in Portland, OR; g. Emergency, Internal Medicine, and Oncology in Rockville, MD; h. Emergency in San Antonio, TX; i. Cardiology, Critical Care, Emergency, Internal Medicine, and Neurology in Seattle, WA; and j. Emergency, Internal Medicine, Oncology, and Ophthalmology in Vienna, VA. In each locality listed above, the relevant market is highly concentrated. In a number of these markets, the combined firm would be the only provider following the transaction. In other markets, consumers would only have one remaining alternative to the combined firm following the transaction. In all of these markets, the Acquisition would substantially increase concentration within the described localities. III. Entry Entry into the relevant markets described above would not be timely, likely, or sufficient in magnitude, character, and scope to deter or E:\FR\FM\08SEN1.SGM 08SEN1 42554 Federal Register / Vol. 82, No. 173 / Friday, September 8, 2017 / Notices counteract the anticompetitive effects of the Acquisition. For de novo entrants, obtaining financing to build a new specialty or emergency veterinary facility and acquiring or leasing necessary equipment can be expensive and time consuming. The investment is risky for specialists that do not have established practices and bases of referrals in the area. Further, to become a licensed veterinary specialist requires extensive education and training, significantly beyond that for a general practitioner veterinarian. Consequently, specialists are in short supply, and recruiting them to move to a new area often takes more than two years, making timely expansion by existing specialty clinics unlikely. sradovich on DSK3GMQ082PROD with NOTICES IV. Effects of the Acquisition The Acquisition, if consummated, may substantially lessen competition and tend to create a monopoly in the relevant markets by eliminating head-tohead competition between Mars and VCA in the provision of specialty and emergency veterinary services; increasing the likelihood that Mars would unilaterally exercise market power; and increasing the likelihood that customers would be forced to pay higher prices for and degraded quality of the relevant services. V. The Consent Agreement The proposed Consent Agreement effectively remedies the Acquisition’s anticompetitive effects in ten markets where both Mars and VCA operate specialty or emergency veterinary clinics by requiring the parties to divest 12 facilities. Clinics in Kansas City, New York, and Phoenix are to be divested to NVA. Clinics in Portland, Rockville, and Vienna are to be divested to PetVet. Clinics in Chicago, Corpus Christi, San Antonio, and Seattle are to be divested to Pathway. The divestitures will preserve competition between the divested clinics and Mars’ BluePearl or VCA’s clinics that offer the same specialty or emergency services within each locality. NVA, PetVet, and Pathway are qualified acquirers of the divested assets. Each firm has significant experience acquiring, integrating, and operating specialty and emergency veterinary clinics. The divestiture includes all regulatory permits and approvals, confidential business information, including customer information, related to the divested clinics, and other assets associated with providing specialty and emergency veterinary care at the divested clinics. To ensure the divestiture is successful, the Order requires Mars and VCA to secure all VerDate Sep<11>2014 17:18 Sep 07, 2017 Jkt 241001 third-party consents, assignments, releases, and waivers required to permit the buyers to conduct business at the divested clinics. As part of these divestitures, Mars and VCA are required to provide reasonable financial incentives to certain employees to continue in their positions. Such incentives may include, but are not limited to, guaranteeing a retention bonus for the specialty veterinarians at the divestiture clinics to assure their continued employment at such clinic, a continuation of all employee benefits, including the funding of regularly scheduled raises and bonuses, and the vesting of pension benefits (as permitted by law and for those Relevant Employees covered by a pension plan), offered by the parties. These provisions ensure that the buyers will have the assets necessary to operate the divested clinics in a competitive manner. The Consent Agreement contains several additional provisions designed to ensure that the divestitures are successful. First, the Consent Agreement prevents Mars for a period of one year from contracting with any specialty or emergency veterinarian affiliated with a divested clinic. This provides the buyers with sufficient time to build goodwill and working relationships with the veterinarians before Mars could capitalize on its prior relationships in soliciting their services. Second, to ensure continuity of patient care and records as the buyers implement their own quality care, billing, and supply systems, Mars will provide transitional services for a period of one year. Finally, the Consent Agreement requires Mars for a period of ten years from the date the Commission issues the Order to provide prior notice to the Commission of its planned acquisitions of specialty or emergency veterinary clinics in certain geographic areas. The Order requires Mars and VCA to divest the clinics no later than ten business days after the consummation of the Acquisition. The Commission has appointed Thomas A. Carpenter, D.V.M. as Interim Monitor to ensure that Mars and VCA comply with all of their obligations pursuant to the Consent Agreement and to keep the Commission informed about the status of the transfer of the rights and assets to NVA, Pathway, and PetVet. Dr. Carpenter assists client companies undergoing regulatormandated ownership transitions and has experience with the purchase and sale of veterinary clinics. If the Commission determines that NVA, Pathway, and PetVet are not acceptable acquirers of the divested PO 00000 Frm 00015 Fmt 4703 Sfmt 4703 assets, or that the manner of the divestitures is not acceptable, the parties must unwind the sale of rights and assets to NVA, Pathway, and PetVet and divest them to a Commissionapproved acquirer within six months of the date the Order becomes final. In that circumstance, the Commission may appoint a trustee to divest the rights and assets if the parties fail to divest them as required. The purpose of this analysis is to facilitate public comment on the proposed Consent Agreement, and it is not intended to constitute an official interpretation of the proposed Decision and Order or to modify its terms in any way. By direction of the Commission. Donald S. Clark, Secretary. [FR Doc. 2017–19044 Filed 9–7–17; 8:45 am] BILLING CODE 6750–01–P GENERAL SERVICES ADMINISTRATION [Notice–MK–2017–03; Docket No.2017– 0002; Sequence 16] The Presidential Commission on Election Integrity (PCEI); Upcoming Public Advisory Meeting; Extension of Comment Period Office of Government-wide Policy (OGP), General Services Administration (GSA). ACTION: Meeting notice with request for comments; extension of comment period. AGENCY: GSA and OGP issued a notice on August 25, 2017, seeking input on an upcoming public advisory meeting, held by the PCEI. The comment period is extended to provide additional time for interested parties to review and submit comments on the notice. DATES: The comment period for the notice published in the Federal Register at 82 FR 40581 on August 25, 2017, is extended until September 12, 2017. Comments pertaining to the meeting should be submitted no later than 5:00 p.m., Eastern Standard Time, on Tuesday, September 12, 2017. ADDRESSES: Individuals who wish to submit written comments for the Commission’s consideration may do so by either of the following methods: • Regulations.gov: http:// www.regulations.gov. Submit public comments or written statements via the Federal eRulemaking portal by searching for ‘‘Notice–MK–2017–03.’’ Select the link ‘‘Comment Now’’ that corresponds with ‘‘Notice–MK–2017– SUMMARY: E:\FR\FM\08SEN1.SGM 08SEN1

Agencies

[Federal Register Volume 82, Number 173 (Friday, September 8, 2017)]
[Notices]
[Pages 42552-42554]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19044]


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FEDERAL TRADE COMMISSION

[File No. 171-0057]


Mars, Incorporated and VCA Inc.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair methods of competition. 
The attached Analysis to Aid Public Comment describes both the 
allegations in the complaint and the terms of the consent orders--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before September 29, 2017.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write: ``In the Matter of 
Mars, Incorporated and VCA Inc., File No. 171-0057'' on your comment, 
and file your comment online at https://ftcpublic.commentworks.com/ftc/marsvcaconsent by following the instructions on the web-based form. If 
you prefer to file your comment on paper, write ``In the Matter of 
Mars, Incorporated and VCA Inc., File No. 171-0057'' on your comment 
and on the envelope, and mail your comment to the following address: 
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania 
Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, 
Suite 5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Michael Barnett (202-326-2362), Bureau 
of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for August 30, 2017), on the World Wide Web, at 
https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before September 29, 
2017. Write ``In the Matter of Mars, Incorporated and VCA Inc., File 
No. 171-0057'' on your comment. Your comment--including your name and 
your state--will be placed on the public record of this proceeding, 
including, to the extent practicable, on the public Commission Web 
site, at https://www.ftc.gov/policy/public-comments.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/marsvcaconsent by following the instructions on the web-based form. 
If this Notice appears at http://www.regulations.gov/#!home, you also 
may file a comment through that Web site.
    If you prefer to file your comment on paper, write ``In the Matter 
of Mars, Incorporated and VCA Inc., File No. 171-0057'' on your comment 
and on the envelope, and mail your comment to the following address: 
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania 
Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, 
Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your 
paper comment to the

[[Page 42553]]

Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible FTC 
Web site at https://www.ftc.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else's Social 
Security number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure that your comment does not include 
any sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 
16 CFR 4.10(a)(2)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC Web site--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC Web site, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC Web site at http://www.ftc.gov to read this Notice 
and the news release describing it. The FTC Act and other laws that the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding, as appropriate. The Commission 
will consider all timely and responsive public comments that it 
receives on or before September 29, 2017. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') with Mars, Incorporated (``Mars''), which is designed to 
remedy the anticompetitive effects that would result from Mars' 
proposed acquisition of VCA Inc. (``VCA'').
    Pursuant to an Agreement and Plan of Merger announced January 9, 
2017, Mars proposes to acquire all of the assets of VCA in a 
transaction valued at approximately $9.1 billion (the ``Acquisition''). 
Both parties provide specialty and emergency veterinary services in 
clinics they operate in cities across the United States. The Commission 
alleges in its Complaint that the 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, by lessening competition in the markets for certain specialty and 
emergency veterinary services in ten different localities in the United 
States. The proposed Consent Agreement will remedy the alleged 
violations by preserving the competition that would otherwise be 
eliminated by the Acquisition. Specifically, under the terms of the 
Consent Agreement, Mars is required to divest twelve clinics. Mars and 
VCA have proposed National Veterinary Associates (``NVA''), PetVet Care 
Centers (``PetVet''), and Pathway Partners Vet Management Company 
(``Pathway'') as buyers of these clinics.
    The proposed Consent Agreement has been placed on the public record 
for 30 days for receipt of comments from interested persons. Comments 
received during this period will become part of the public record. 
After 30 days, the Commission will review proposed Consent Agreement 
and comments received, and decide whether it should withdraw, modify, 
or make the Consent Agreement final.

II. The Relevant Markets and Market Structures

    The relevant lines of commerce in which to analyze the Acquisition 
are individual specialty and off-hours emergency veterinary services. 
Specialty veterinary services are required in cases that a general 
practitioner veterinarian cannot treat properly. General practitioner 
veterinarians commonly refer such cases to a specialist, typically a 
doctor of veterinary medicine board certified in the required 
specialty. Individual veterinary specialties include cardiology, 
critical care, internal medicine, neurology, oncology, ophthalmology, 
and surgery. Emergency veterinary services are used in acute situations 
where a general practice veterinarian is not available or in some cases 
not trained or equipped to treat the animal's medical problem.
    The relevant areas for the provision of specialty and off-hours 
emergency veterinary services are local, delineated by the distance and 
time that pet owners travel to receive treatment. The distance and time 
customers travel for specialty services are highly dependent on local 
factors such as the proximity of a clinic offering the required 
specialty service, population density, population demographics, traffic 
congestion, or specific local geographic barriers. The markets affected 
by the transaction differ by area. The localities and services at issue 
are:
    a. Oncology in western suburbs of Chicago, IL;
    b. Emergency in Corpus Christi, TX;
    c. Critical Care, Emergency, Internal Medicine, and Surgery in 
Kansas City, MO;
    d. Critical Care and Emergency in Mesa, AZ;
    e. Critical Care and Oncology in northern New York City, NY and its 
northern suburbs;
    f. Critical Care, Internal Medicine, Neurology, Oncology, and 
Ophthalmology in Portland, OR;
    g. Emergency, Internal Medicine, and Oncology in Rockville, MD;
    h. Emergency in San Antonio, TX;
    i. Cardiology, Critical Care, Emergency, Internal Medicine, and 
Neurology in Seattle, WA; and
    j. Emergency, Internal Medicine, Oncology, and Ophthalmology in 
Vienna, VA.
    In each locality listed above, the relevant market is highly 
concentrated. In a number of these markets, the combined firm would be 
the only provider following the transaction. In other markets, 
consumers would only have one remaining alternative to the combined 
firm following the transaction. In all of these markets, the 
Acquisition would substantially increase concentration within the 
described localities.

III. Entry

    Entry into the relevant markets described above would not be 
timely, likely, or sufficient in magnitude, character, and scope to 
deter or

[[Page 42554]]

counteract the anticompetitive effects of the Acquisition. For de novo 
entrants, obtaining financing to build a new specialty or emergency 
veterinary facility and acquiring or leasing necessary equipment can be 
expensive and time consuming. The investment is risky for specialists 
that do not have established practices and bases of referrals in the 
area. Further, to become a licensed veterinary specialist requires 
extensive education and training, significantly beyond that for a 
general practitioner veterinarian. Consequently, specialists are in 
short supply, and recruiting them to move to a new area often takes 
more than two years, making timely expansion by existing specialty 
clinics unlikely.

IV. Effects of the Acquisition

    The Acquisition, if consummated, may substantially lessen 
competition and tend to create a monopoly in the relevant markets by 
eliminating head-to-head competition between Mars and VCA in the 
provision of specialty and emergency veterinary services; increasing 
the likelihood that Mars would unilaterally exercise market power; and 
increasing the likelihood that customers would be forced to pay higher 
prices for and degraded quality of the relevant services.

V. The Consent Agreement

    The proposed Consent Agreement effectively remedies the 
Acquisition's anticompetitive effects in ten markets where both Mars 
and VCA operate specialty or emergency veterinary clinics by requiring 
the parties to divest 12 facilities. Clinics in Kansas City, New York, 
and Phoenix are to be divested to NVA. Clinics in Portland, Rockville, 
and Vienna are to be divested to PetVet. Clinics in Chicago, Corpus 
Christi, San Antonio, and Seattle are to be divested to Pathway. The 
divestitures will preserve competition between the divested clinics and 
Mars' BluePearl or VCA's clinics that offer the same specialty or 
emergency services within each locality. NVA, PetVet, and Pathway are 
qualified acquirers of the divested assets. Each firm has significant 
experience acquiring, integrating, and operating specialty and 
emergency veterinary clinics.
    The divestiture includes all regulatory permits and approvals, 
confidential business information, including customer information, 
related to the divested clinics, and other assets associated with 
providing specialty and emergency veterinary care at the divested 
clinics. To ensure the divestiture is successful, the Order requires 
Mars and VCA to secure all third-party consents, assignments, releases, 
and waivers required to permit the buyers to conduct business at the 
divested clinics.
    As part of these divestitures, Mars and VCA are required to provide 
reasonable financial incentives to certain employees to continue in 
their positions. Such incentives may include, but are not limited to, 
guaranteeing a retention bonus for the specialty veterinarians at the 
divestiture clinics to assure their continued employment at such 
clinic, a continuation of all employee benefits, including the funding 
of regularly scheduled raises and bonuses, and the vesting of pension 
benefits (as permitted by law and for those Relevant Employees covered 
by a pension plan), offered by the parties. These provisions ensure 
that the buyers will have the assets necessary to operate the divested 
clinics in a competitive manner.
    The Consent Agreement contains several additional provisions 
designed to ensure that the divestitures are successful. First, the 
Consent Agreement prevents Mars for a period of one year from 
contracting with any specialty or emergency veterinarian affiliated 
with a divested clinic. This provides the buyers with sufficient time 
to build goodwill and working relationships with the veterinarians 
before Mars could capitalize on its prior relationships in soliciting 
their services. Second, to ensure continuity of patient care and 
records as the buyers implement their own quality care, billing, and 
supply systems, Mars will provide transitional services for a period of 
one year. Finally, the Consent Agreement requires Mars for a period of 
ten years from the date the Commission issues the Order to provide 
prior notice to the Commission of its planned acquisitions of specialty 
or emergency veterinary clinics in certain geographic areas.
    The Order requires Mars and VCA to divest the clinics no later than 
ten business days after the consummation of the Acquisition.
    The Commission has appointed Thomas A. Carpenter, D.V.M. as Interim 
Monitor to ensure that Mars and VCA comply with all of their 
obligations pursuant to the Consent Agreement and to keep the 
Commission informed about the status of the transfer of the rights and 
assets to NVA, Pathway, and PetVet. Dr. Carpenter assists client 
companies undergoing regulator-mandated ownership transitions and has 
experience with the purchase and sale of veterinary clinics.
    If the Commission determines that NVA, Pathway, and PetVet are not 
acceptable acquirers of the divested assets, or that the manner of the 
divestitures is not acceptable, the parties must unwind the sale of 
rights and assets to NVA, Pathway, and PetVet and divest them to a 
Commission-approved acquirer within six months of the date the Order 
becomes final. In that circumstance, the Commission may appoint a 
trustee to divest the rights and assets if the parties fail to divest 
them as required.
    The purpose of this analysis is to facilitate public comment on the 
proposed Consent Agreement, and it is not intended to constitute an 
official interpretation of the proposed Decision and Order or to modify 
its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-19044 Filed 9-7-17; 8:45 am]
 BILLING CODE 6750-01-P