Under a special federal court order, PPG Industries Inc. can proceed with its proposed $42.3-million acquisition of Swedlow Inc., a Garden Grove maker of glass and acrylic transparencies, while the Federal Trade Commission continues to investigate the deal.
In allowing the transaction to go through, U.S. District Judge Thomas Penfield Jackson in Washington ruled that the Pittsburgh glass producer must hold Swedlow as a separate operation and put the stock it gets in a voting trust until the FTC completes administrative proceedings to determine if the acquisition violates antitrust laws.
The judge essentially adopted a Swedlow proposal made in late February when the judge granted a preliminary injunction against the proposed acquisition. Under the proposal, PPG would buy Swedlow's stock--a move already approved by Swedlow's stockholders--but keep Swedlow's military aircraft canopy business separate from PPG's commercial aircraft window business.
The FTC, which had sued to block the deal, said the merger would "substantially reduce competition" in the field of manufacturing aircraft windows. An industry analyst has estimated that PPG's share of the worldwide market for aircraft windows would increase from 45% to 75%.
The FTC said it will appeal the ruling within 10 days, the period Jackson gave before his order takes effect. The FTC's administrative proceedings, already under way, could take two to three years.
Last August, the companies announced that PPG would acquire Swedlow for $32.60 a share.