The Federal Trade Commission has informed Minneapolis-based manufacturer Graco that it is challenging the the company’s planned acquisition of a unit of Illinois Tool Works, saying the proposed deal would hurt competition and lead to higher prices.
The agency said it is seeking to maintain competition in markets for key industrial finishing equipment and has issued an administrative complaint against Graco, Illinois Tool Works and ITW Finishing seeking to stop the proposed $650 million cash deal.
Graco announced the proposed acquisition last April. The companies make industrial liquid finishing equipment, which is used to apply finishes to manufactured products like cars, wood cabinets and appliances.
The FTC said the proposed deal would lead to reduced innovation for the North American manufacturers who rely on this equipment.
“Liquid finishing equipment is critical to manufacturers,” Richard Feinstein, director of the FTC’s Bureau of Competition, said in a release. Only three significant competitors sell and service it in North America, with Graco and ITW together dominating this field.”
Obama says that he loves capitalism. He acts like he doesn’t.