(Updates with comment from Federal Trade Commission official in third paragraph.)
Dec. 15 (Bloomberg) -- Graco Inc.’s proposed acquisition of a maker of equipment for applying paints and finishes was challenged by U.S. regulators, who said the deal would hurt competition and lead to higher prices.
The U.S. Federal Trade Commission issued an administrative complaint to block Minneapolis-based Graco’s $650 million bid for Illinois Tool Works Inc.’s ITW Finishing, the agency said in a statement today.
ITW Finishing and Graco, which supplies technology for managing fluids in industrial and commercial applications, dominate the industry for equipment used to put finishes on products ranging from cars to appliances, said Richard Feinstein, director of the FTC’s Bureau of Competition, in a statement.
“Combining competitors in these markets would be a bad deal for manufacturers and consumers,” he said.
Graco President and Chief Executive Officer Patrick J. McHale said in a statement he is “disappointed” by the FTC decision. “The liquid finishing industry is highly competitive,” he said. The FTC action “if successful, will hurt manufacturing and jobs in this country.”
John Brooklier, a spokesman for Illinois Tool Works in Glenview, Illinois, didn’t immediately return a phone call seeking a comment.
Illinois Tool agreed in April to sell the unit, which had revenue of $305 million last year and 900 employees, according to a Graco statement in April. Graco said the transaction was scheduled to close as soon as June, pending regulatory review. In July, the commission requested more information on the deal.
--With assistance from Thomas Black in Dallas. Editors: Justin Blum, Jim Rubin.
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