Wednesday, February 22, 2012

Unable to Reach Settlement with FTC, Omnicare Drops Bid to Acquire Rival

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Pharmaceutical services provider Omnicare Inc. announced on February 21 that it has abandoned plans to acquire rival PharMerica Corporation, in light of an FTC challenge to the deal.

The FTC issued an administrative complaint on January 27, alleging that the combination of the two largest U.S. long-term care pharmacies would harm competition and enable Omnicare to raise the price of drugs for Medicare Part D consumers and others (CCH Trade Regulation Reporter ¶16,713).

"While we continue to strongly disagree with the FTC's decision to seek to block the proposed transaction, we do not believe it is prudent to invest significant time and money in a lawsuit at this time," Omnicare said in a statement.

"Throughout this process we made a good faith effort to reach a resolution with the FTC and put forth a number of reasonable solutions,” the statement said. “After careful consideration, including the rejection of our offers to resolve the alleged concerns through a consent agreement that encompassed divestitures, and a review of Omnicare's many other compelling growth opportunities, we have concluded that it is in the best interests of Omnicare shareholders, customers and employees to allow the tender offer to expire."

The FTC case is In the Matter of Omnicare, Inc., Dkt. 9352. Further information on the case appears here on the FTC website.

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