Eleventh Circuit Upheld Unwinding of a $78 Million Merger of Battery Separator Competitors

In Polypore International Inc. v. Federal Trade Commission, the Eleventh Circuit upheld the FTC’s ruling, requiring Polypore International Inc. to divest of assets gained in its $76 million acquisition of Microporous Products LP.  In 2008, The FTC filed a complaint to block Polypore’s $76 million purchase of Microporous because the deal substantially reduced competition in the market for battery separators.  In November 2011, FTC upheld a large portion of an administrative court’s decision, finding that the merged company could substantially lessen competition by creating a monopoly for several types of battery separators.  Polypore appealed this decision to the Eleventh Circuit, arguing that the FTC should have treated Microporous as a potential competitor, and not as a current competitor because Microporous was not actually making or selling battery separators.  The Eleventh Circuit disagreed, and held that while Microporous may not have actually sold products in the automotive battery market at the time of acquisition, it had been investigating entry into that market for several years.  And, according to the court, “the Clayton Act is about probabilities and not certainties.”

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