Amerigas Partners LP (APU), the largest U.S. propane distributor, won antitrust approval for its purchase of the Heritage Propane unit of Energy Transfer Partners LP (ETP) on the condition that the deal excludes a cylinder exchange business.
The Federal Trade Commission said today its settlement with the companies resolves its claim that the deal, as originally proposed, would have led to higher prices for the propane exchange cylinders used by consumers to fuel barbeque grills and patio heaters.
Without the exclusion, the $2.9 billion transaction “would have substantially lessened competition in the nationwide market for distributing and selling propane exchange cylinder services, as well as in several smaller regional markets,” the FTC said in a statement.
By cutting competitors in the industry from three to two, the original proposal would also have ended the “maverick” role played by Heritage Propane Express, which offered lower prices and better terms to retailers than its rivals, the FTC said.
The FTC will be able to review Dallas-based ETP’s sale of Heritage Propane Express under terms of the settlement to ensure that it remains a viable competitor after the sale, the FTC said.
AmeriGas, based in King Of Prussia, Pennsylvania, fell 61 cents, or 1.4 percent, to $42.64 at 12:55 p.m. in New York Stock Exchange composite trading. ETP shares rose 8 7 cents to $40.45.
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