The legal issues that relate to mergers and acquisitions (M&A) of businesses.

Another bank merger in the offing . . . Two Maryland banks have a announced a deal. Bradford Bancorp of Baltimore, Maryland will acquire Valley Bancorp of Hunt Valley, Maryland in a transaction worth $9.6 million.

Two telecom companies are merging. That doesn't sound like news, does it? Cleartel Communications announced its intent to acquire Supra Telecom. Both offer telecommunication services in South Florida. Terms of the deal were not disclosed.

A big deal in the branded meats business has been announced. Smithfield Foods will "acquire most assets of the branded meats business of ConAgra Foods for about $575 million in cash and stock."

According to this Bloomberg article, HCA Inc. will be bought out by Bain Capital LLC, Kohlberg Kravis Roberts & Co.,Merrill Lynch & Co. and HCA co-founder Thomas F. Frist Jr. The total value of the buyout is $33 billion, representing the largest buyout in U.S. history.

The semiconductor industry is abuzz with rumors of a possible deal involving Royal Philips Electronics NV. This article reports "that private equity firms may be willing to pay around 8 billion euros ($10.1 billion) for the company's semiconductor division." This division manufactures "chips for mobile phones, mp3 players, televisions and cars."

In other news, AMD intends to buy ATI Technologies Inc. for $5.4 billion. ATI makes graphics chips. According to this AP article, the "acquisition would instantly turn AMD into a leading supplier of graphics chips, which render images for computer games and Internet video, and so-called chipsets, which connect a PC's processor to other system components." The deal will intensify the AMD-Intel rivalry, as Intel also supplies graphics chips.

The Federal Trade Commission announced its decision to challenge Linde AG’s proposed $14.4 billion acquisition of The BOC Group plc. The FTC’s complaint alleges that the acquisition as originally structured would have increased the likelihood that customers would be forced to pay higher prices for liquid oxygen, liquid nitrogen, and bulk refined helium in certain markets.

Linde AG settled, agreeing to sell air separation units and other assets related to the production of liquid oxygen and nitrogen in eight locations across the United States. Linde also must sell bulk refined helium assets, including helium source contracts, distribution assets, and customer contracts to Taiyo Nippon Sanso Corporation.

To learn more, read the Decision and Order and the Analysis of Agreement Containing Consent Orders to Aid Public Comment.

Today, the FTC announced that it will challenge Hologic Inc.’s 2005 purchase of the breast cancer screening and diagnosis business of Fischer Imaging Corporation. In its complaint, the FTC alleged that Hologic’s acquisition of Fischer’s prone stereotactic breast biopsy systems (SBBSs) business harmed American consumers by eliminating its only significant competitor for the sale of SBBSs in the United States.

Hologic paid $32 million for Fischer’s intellectual property and other assets in September 2005. The assets related to Fischer's mammography and breast biopsy businesses, including patents, trademarks, and customer and vendor lists for Fischer’s prone SBBS product, MammoTest. At the time, Fischer was Hologic’s only significant competitor in the U.S. market for prone SBBSs. As a result of the acquisition, Fischer relinquished all of its rights to develop, market, and sell prone SBBSs in the United States. According the government's complaint, the deal gave Hologic a "a virtual monopoly in the U.S. prone SBBS market."

Because this deal was worth less than the $56.7 million filing threshold under the Hart-Scott-Rodino Premerger Notification Act (HSR Act), it was not reportable to the federal antitrust agencies. The FTC nevertheless learned of it--likely as a result of a customer complaint--and challenged it anyway.  Hologic must now divest itself of the assets, which it has agreed to do. Siemens AG will buy the assets.

The Wall Street Journal's Law Blog is reporting that Judge Emmet Sullivan appears to be uncomfortable with the settlements reached by the U.S. Department of Justice in connection with two telecom mergers, SBC-AT&T and Verizon-MCI. According to the post, Federal Judge Questions Two Telecom Mega-Mergers, Judge Sullivan issued an order observing that the two mergers "appear to be against public interest given the apparent loss in competition." Whether he will believes that the proposed settlements adequately address that loss remains to be seen.

According to Reuters, the FTC has announced that National Grid Plc may close its acquisition of KeySpan Corp. The article appears here. Reuters also reports that Kimco Realty Corp., which buys, develops, and operates shopping centers, intends to acquire Pan Pacific Retail Properties Inc. for $2.9 billion.

Mittal Steel Co. will not acquire "the outstanding minority stakes of Arcelor's two Brazilian subsidiaries" when it takes over Arcelor, according to this AP story. Lastly, OnWafer® Technologies announced today it has acquired the Plasma Management Division from Advanced Energy Industries, Inc.

The Foundation for Taxpayer and Consumer Rights has filed a class action suit against AT&T and Cingular. Cingular denies all wrongdoing, accusing the Foundation's lawyer of making "false and misleading statements."

The Foundation's complaint attacks AT&T and Cingular's post-merger conduct. It alleges: "Cingular deliberately schemed to dismantle the AT&T Wireless network so as to diminish and degrade the service provided to AT&T Wireless customers." The scheme was intended "to induce AT&T Wireless customers into 'transferring' from their AT&T Wireless plan to a Cingular plan," which allegedly offers "less favorable terms."  According to the complaint, consumers have suffered due to "diminished service in the form of dropped calls as well as poor or no reception in areas where they previously received adequate reception."

The complaint asserts claims for breach of contract and breach of implied covenant of good faith and fair dealing, unjust enrichment/common law restitution, and violations of various states' unfair and deceptive acts and practices statutes. The Foundation filed it in the federal district court sitting in Seattle. 

Italy's antitrust authority will investigate the 2002 acquisition by Electricite de France and AEM SpA's of the controlling interest in Edison SpA.  The agency's investigation will focus on whether the acquisition violates "rules limiting state ownership of certain electricity generators.'

In other news from Italy, the acquisition of Fonti del Vulture by Coca-Cola Co. and  Coca-Cola Hellenic Bottling Company has been cleared by Italy's antitrust agency.  The European Commission cleared the deal last year--subject to conditions. Italy's clearance is subject to the same conditions.

Deal-makers targeting Chinese companies will find this news discouraging. According to China looking closely at foreign mergers, acquisitions, "China's ministry of commerce plans to keep a close watch on foreign mergers and acquisitions in important sectors to ensure the country's industrial and economic integrity." This "close watch" has resulted in the delay of the proposed acquisition of the Xugong Group, China's biggest construction machinery manufacturer, by American-based Carlyle Group.

The U.S. Department of Justice today announced that it will require The McClatchy Company and Knight Ridder Inc. to divest the St. Paul Pioneer Press in order to proceed with their proposed multi-billion dollar newspaper merger. The Department said that the transaction, as originally proposed, would have eliminated head-to-head competition between McClatchy and Knight Ridder and likely would have resulted in higher prices for advertisers and readers in the Minneapolis/St. Paul metropolitan area.

The government's complaint alleges that McClatchy's Star Tribune competes directly against Knight Ridder's St. Paul Pioneer Press for advertisers in the cities of Minneapolis and St. Paul and surrounding areas. The parties have agreed to make the divestiture. To learn more about this deal and the DOJ's analysis, read the Competitive Impact Statement.

Euronext and NYSE--a done deal that will create "the first transatlantic stock exchange. Read more here.

The FTC has signed off on Merck's proposed $400 million acquisition of GlycoFi Inc. GlycoFi is a biotech company, focusing on yeast glycoengineering. Wonder what that is . . .

Those of you interested in EU deals should check out Reuters' EU mergers and takeovers (June 2). This is a great guide to mergers under review in the EU. Also included is "a brief guide to the EU merger process."

Whoever is bidding for Pfizer's consumer healthcare business, it's not Bayer. Reuters has more here.

The Federal Reserve has approved a plan by Spanish bank, Banco Santander Central Hispano S.A. to buy approximately 25% of Sovereign Bancorp., which owns Sovereign Bank and Independence Community Bank. Independence Community Bank is based in New York. In approving the deal, the agency noted that the transaction "would not result in any significantly adverse effect on competition or the concentration of banking resources in the New York banking market or in any other relevant banking market."

In other news, JDA Software and Manugistics announced that they have been granted early termination of the HSR waiting period. The transaction must be approved by Manugistics shareholders.

Finally, funeral-services companies, Service Corporation International and Alderwoods Group, Inc., announced that the FTC has sent them each a Request for Additional Information a/k/a a Second Request. Canada's Competition Bureau also is investigating the transaction.