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Mergers & Acquisitions Report
Buying Assets in U.S. Territories? The FTC Is Watching
By Mark Cecil
December 9, 2002
Last month, the Federal Trade Commission ruled that Wal-Mart Stores Inc. needs to divest four stores from its purchase of Supermercados Amigo Inc.
What was unusual about the FTC's action? The target is based in Puerto Rico, one of the few areas the agency's jurisdiction extends to, outside the 50 states.
The other protectorates are the U.S. Virgin Islands and the South Pacific islands of Guam and U.S. Samoa. Occasionally, the FTC requires divestures in these areas, but there is no recent example of antitrust action against a target located there. "As far as the FTC is concerned, U.S. citizens [in the protectorates] are U.S. citizens and deserve the kind of protection the FTC can provide," said an FTC spokesman.
Wal-Mart, the world's largest company revenue-wise, signed a Feb. 5 agreement to purchase the Amigo chain. The 36-supermarket chain, with $542 million in annual sales, is the largest in Puerto Rico. Wal-Mart already has nine stores and one super center on the island. According to the FTC, Wal-Mart has yet to close the deal, but Wal-Mart could not be reached to confirm.
The only other recent example of FTC antitrust activity outside the states is Exxon Corp.'s $76 billion purchase of Mobil Corp. in 1999. Exxon needed to divest 12 of the combined company's gas stations located in Guam.
A spokesman at the DOJ said its jurisdiction in Puerto Rico and the other U.S. protectorates is identical to the FTC's.