The Federal Trade Commission is cooking with gas. In a move designed to protect the market for propane cylinders used to fuel barbeque grills and patio heaters, the agency announced today that it has imposed conditions on AmeriGas LP's $2.9 billion purchase of Energy Transfer Partners Heritage Propane business.
The FTC's settlement requires AmeriGas to exclude ETP's cylinder exchange business, Heritage Propane Express, from the sale.
AmeriGas is the largest propane distributor in the United States, serving 1.3 million customers in all 50 states and selling more than one billion gallons of propane a year.
Its businesses include propane cylinder exchanges, where consumers swap empty tanks for pre-filled ones. AmeriGas is the second-largest cylinder exchange service supplier, and ETP’s Heritage Propane Express is number three (Ferrellgas Partners, L.P.'s Blue Rhino is number one).
Perhaps unsurprisingly, the FTC alleged that the deal would have substantially lessened competition in the nationwide market for distributing and selling propane exchange cylinders.
Under the terms of the settlement, ETP must exclude the propane exchange business from the sale, and is required to maintain the viability of the business for two years, unless it is sold before then. If so, the company must first get approval from the FTC for any sale.
AmeriGas was represented by Washington-based Foley & Lardner partner Jay Varon. ETP turned to Dionne Lomax, a partner in Vinson & Elkin’s D.C. office.
For the FTC, Thomas Dahdouh, an attorney in the Bureau of Competition, worked on the case, as did Jeffrey Klurfeld, director of the bureau’s western regional office.