A federal appeals court turned down yesterday the Federal Trade Commission's request for an injunction blocking the merger of Beatrice Foods Co. and Tropicana Products Inc.
The FTC had sought to bar consummation of the merger while its legality is tried in an FTC administrative hearing in June, the FTC charged that the proposed merger may reduce competition in the processing, distribution and sale of ready-to-serve orange juice.
The FTC originally sought a temporary restraining order from U. S. District Judge George L. Hart but was turned down; the agency then went to the appeals court which barred the Beatrice's acquisition of Tropicana on a temporary basis pending the outcome of its consideration of the appeal.
Yesterday, a panel consisting of Judges George E. MacKinnon, Carl McGowan, and Roger Robb turned down the FTC's injunction request. The vote was 2-1 with McGowan voting to issue an injunction.
Spokesmen for the FTC said late yesterday they hadn't yet decided whether to continue their efforts to block the takeover. The case challenging the validity of the merger will of course continue. When the agency brought its complaint, it said that it would seek to require Beatrice to divest itself of Tropicana if it failed to get a preliminary injunction barring the merger and later found it to be illegal.
Beatrice said last night it plans to go ahead with the merger when the stay now in effect is vacated at 4 p.m. today.
According to the FTC's complaint, Tropicana is the nation's largest producer of ready-to-serve orange juice, with its share of the market - about 30 percent - nearly twice that of its nearest competitor. Beatrice was estimated to have between 1 and 1.7 percent of the same market.
The retail distribution and sale of ready-to-serve OJ is concentrated, with the top four firms accounting for nearly 59 percent of total sales in 1976, the agency said.
The complaint alleges that the planned merger would eliminate actual competition between the two companies and between competitors generally, eliminate Tropicana as the major independent competitor, and increse concentration in the industry.
Under the terms of the proposed merger, Tropicana would become a wholly-owned subsidairy of Beatrice; the value of the acquisition has been estimated at about $490 million.
Beatrice, with net sales of $5.3 billion last year, is engaged in the processing and distributing of food products and related dairy products as well as other products such as luggage. Tropicana, which makes a variety of drinks, sherbet, cattle feed, cardboard boxes and bottles, had sales of $244 million last year.