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Suit Would Bar Buy-Out of Swedlow : FTC Seeks to Block Acquisition by PPG of Plastics Maker

January 07, 1986|JAMES S. GRANELLI | Times Staff Writer

The Federal Trade Commission, claiming the deal would substantially lessen competition for making and selling aircraft windshields and canopies, asked a U.S. District Court on Monday to block PPG Industries Inc.'s $42-million acquisition of Garden Grove-based Swedlow Inc.

Jack Gold, senior vice president and attorney for Swedlow, a plastics maker specializing in military aircraft canopies, said both companies plan to fight the FTC action. Though the lawsuit was filed against PPG, Swedlow plans to intervene on PPG's behalf.

Gold said Swedlow's Washington lawyer, Carla Hills, former secretary of Housing and Urban Development under President Gerald Ford, will file the necessary legal documents today.

The FTC is seeking a temporary restraining order to block action on the acquisition until it determines if it violates federal antitrust laws and agency regulations, said FTC spokeswoman Ann Guler.

FOR THE RECORD
Los Angeles Times Wednesday January 8, 1986 Orange County Edition Business Part 4 Page 2 Column 3 Financial Desk 2 inches; 50 words Type of Material: Correction
Despite a Federal Trade Commission suit to block the deal, stockholders of Swedlow Inc., a Garden Grove plastics maker specializing in aircraft canopies, will vote at a shareholders meeting Thursday on whether they want to sell the company to PPG Industries Inc. for nearly $42 million. The Times incorrectly reported that the FTC suit would halt the vote.

The lawsuit halts a scheduled Jan. 9 vote by Swedlow's stockholders. PPG had 49% of Swedlow's stock pledged to it by proxy.

The suit had been expected since Dec. 17 when the FTC revealed it would oppose the acquisition. An industry analyst said the deal would increase PPG's share of the worldwide aircraft window market from 45% to nearly 75%.

Some industry analysts believe PPG wants Swedlow for its technology in plastic transparencies rather than for the products churned out by its aircraft division. PPG has been unable to acquire such technology on its own or by purchasing another plastics company, they said.

But Gold said the technology and the products are inseparable. Besides having a sizable share of the aircraft market, the company is starting to penetrate the market for abrasion-resistant coatings for plastics, he said.

Gold maintains that Swedlow's plastic transparencies, used primarily for fighter jet canopies that sell for $40,000 to $60,000 apiece, are not interchangeable with PPG's glass transparencies, used as windshields on commercial jets such as the Boeing 747. Therefore, he claims, the two companies hardly compete.

While several analysts believe the FTC has a strong enough case to block the acquisition, they have said they cannot understand why the agency is trying to halt a relatively minor deal that would have little effect on the economy when it already has approved several giant oil company mergers.

PPG had a net income of $527 million in 1984, and Swedlow had profits of $1.9 million in its fiscal 1985, according to the FTC.

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