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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: Bald Eagle who wrote (1699)	4/18/1998 9:49:00 AM
From: Larry J.	Read Replies (1) \| Respond to of 5944

ADAPTEC, SYMBIOS MERGER QUERIED FTC probe: 70% market share for components spurs inquiries. (San Jose Mercury News, April 18, 1998) The Federal Trade Commission is making inquiries about the proposed merger of Symbios Logic Inc. and Adaptec Inc. - a merger that would allow the resulting company to control well over 70 percent of the market in some key internal computer components. The FTC, which examines mergers and inter-company agreements for anti-competitive implications, notified the companies last week that it was filing a formal second request for information about the $775 million deal. It began contacting other companies - including competitors and customers - this week. Both companies primarily make products designed to manage the transfer of information from one part of a computer to another, and in some cases from a computer to a larger network. Although it is not a hard and fast rule, market share of more than 70 percent usually prods investigators to ask whether a company exercises control over a specific market. A spokesman for Milpitas-based Adaptec confirmed the FTC's actions. He said the two companies hoped to file the requested information as soon as possible, and could comply with the request in as little as two weeks. The spokesman added that Adaptec remains confident that the acquisition will be approved, but the FTC's request will almost certainly delay completion of the deal. After the two companies both formally certify compliance with the FTC's request, the federal agency then has to either approve the merger, challenge it or ask that modifications to the deal be made. A second request for information generally means the FTC is seeking in-depth understanding of how a proposed merger will affect the competitive balance of a particular industry, observers said. "It shouldn't necessarily be looked at as a red flag, but its not like they always take this action either, " said Richard Gray, an antitrust attorney at the San Jose firm of Bergeson, Eliopoulos, Grady & Gray LLP. ..........The article goes on a bit further with some historical perspective on this type of action, but ends with the paragraph: Adaptec agreed to acquire Fort Collins, Colo.-Symbios from its parent company - Hyundai Electronics America - in February. The deal, worth 1.2 times Symbios' current earnings, was seen as a bargain for Adaptec. Observers said Adaptec was able to take advantage of the Asia economic crisis in making the deal. I wonder if this is in part what's been keeping the share price down?? Larry