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FTC OPPOSITION TO

Executive Summary

FTC OPPOSITION TO ALCON/CooperVision MERGER is based on the commission's belief that the merger would have anticompetitive effects on "a number of specific ophthalmic therapeutic" markets, as well as the soft contact lens care product market. In a July 27 press release announcing its intention to seek a preliminary injunction to halt Alcon's acquisition of CooperVision, the Federal Trade Commission said it "believes the merger would eliminate competition in those markets where CooperVision and Alcon are the only competitors, and would substantially decrease competition in numerous other markets in which the two firms are now significant competitors." Alcon terminated its offer to purchase CooperVision July 27, just four days before the merger was to be completed. The tender offer price was $500 mil. ($25 per common share) for the 20.13 mil. shares outstanding. FTC noted that in the soft contact lens care product market, Alcon is currently the third largest company in sales volume and CooperVision is fourth. A new company created from their merger would be the second largest in that market, FTC stated. The commission reported that Alcon, a wholly-owned subsidiary of Nestle S.A., had 1983 sales of approximately $300 mil. compared to CooperVision's 1983 sales of approximately $200 mil. FTC also maintained that the merger "could stifle applied research to develop new eye treatment drugs and medications." In a separate release, Alcon said it "believes that the proposed acquisition is not anti-competitive" and that it would "prevail if the matter were to be fully litigated." However, Alcon said it terminated the offer "because of the uncertainty and extended delay that would result from litigating a commission challenge to the transaction." Alcon offered to purchase CooperVision in April.

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