[Federal Register Volume 59, Number 64 (Monday, April 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7975]


[[Page Unknown]]

[Federal Register: April 4, 1994]


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FEDERAL TRADE COMMISSION
[File No. 931 0024]

 

TCH Corporation, et al.; Proposed Consent Agreement With Analysis 
To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
require, among other things, two California-based corporations to 
divest, within one year, to a Commission-approved buyer, the pharmacy 
business in either the Payless or the Thrifty or Bi-Mart stores in five 
designated areas, would require the respondents to ensure that the 
assets to be divested remain viable and marketable, and for ten years 
would require that the respondents obtain Commission approval prior to 
acquiring any stock in any entity engaged in the retail pharmacy 
business in the areas designated.

DATES: Comments must be received on or before June 3, 1994.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:Laura Wilkinson, FTC/S-2224, 
Washington, DC 20580. (202) 326-2830.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the following consent agreement containing a consent order 
to cease and desist, having been filed with and accepted, subject to 
final approval, by the Commission, has been placed on the public record 
for a period of sixty (60) days. Public comment is invited. Such 
comments or views will be considered by the Commission and will be 
available for inspection and copying at its principal office in 
accordance with section 4.9(b)(6)(ii) of the Commission's Rules of 
Practice (16 CFR 4.9(b)(6)(ii)).

Agreement Containing Consent Order

    In the Matter of: TCH Corporation, a corporation, and Green 
Equity Investors, L.P., a limited partnership.

    The Federal Trade Commission (``Commission'') having initiated an 
investigation of the proposed acquisition of certain stock and assets 
of Kmart Corporation by TCH Corporation (``TCH''), a Delaware 
corporation, and Green Equity Investors, L.P. (``GEI''), a Delaware 
investment limited partnership, hereinafter sometimes referred to, 
collectively, as ``Proposed Respondents''; and it now appearing that 
TCH and GEI are willing to enter into an Agreement Containing Consent 
Order (``Agreement'') to divest certain assets, cease and desist from 
certain acts, and to provide for certain other relief.
    It is hereby agreed by and between Proposed Respondents, by their 
duly authorized officers and attorneys, and counsel for the Commission 
that:
    1. Proposed Respondent TCH is a Delaware corporation with its 
office and principal place of business at 3424 Wilshire Boulevard, Los 
Angeles, CA 90010.
    2. Proposed Respondent GEI is a Delaware investment limited 
partnership with its office and principal place of business at 333 
South Grand Avenue, suite 5400, Los Angeles, CA 90071.
    3. Proposed Respondents admit all the jurisdictional facts set 
forth in the draft of complaint here attached.
    4. Proposed Respondents waive:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    (d) Any claim under the Equal Access to Justice Act.
    5. This agreement shall not become part of the public record of the 
proceeding unless and until it is accepted by the Commission. If this 
agreement is accepted by the Commission it, together with the draft of 
complaint contemplated thereby, will be placed on the public record for 
a period of sixty (60) days and information in respect thereto publicly 
released. The Commission thereafter may either withdraw its acceptance 
of this agreement and so notify the Proposed Respondents, in which 
event it will take such action as it may consider appropriate, or issue 
and serve its complaint (in such form as the circumstances may require) 
and decision, in disposition of the proceeding.
    6. This agreement is for settlement purposes only and does not 
constitute an admission by the Proposed Respondents that the law has 
been violated as alleged in the draft of complaint here attached, or 
that the facts as alleged in the draft complaint, other than the 
jurisdictional facts, are true.
    7. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Section 2.34 of the 
Commission's Rules, the Commission may, without further notice to 
Proposed Respondents, (1) Issue its complaint corresponding in form and 
substance with the draft of complaint here attached and its decision 
containing the following Order to divest and to cease and desist, and 
for other relief in disposition of the proceeding, and (2) make 
information public with respect thereto. When so entered, the Order 
shall have the same force and effect and may be altered, modified, or 
set aside in the same manner and within the same time provided by 
statute for other orders. The Order shall become final upon service. 
Delivery by the United States Postal Service of the complaint and 
decision containing the agreed-to Order to Proposed Respondents' 
addresses as stated in this agreement shall constitute service. 
Proposed Respondents waive any right they may have to any other manner 
of service. The complaint may be used in construing the terms of the 
Order, and no agreement, understanding, representation, or 
interpretation not contained in the Order or the agreement may be used 
to vary or contradict the terms of the Order.
    8. Proposed Respondents have read the proposed Complaint and Order 
contemplated hereby. Proposed Respondents understand that once the 
Order has been issued, they will be required to file one or more 
compliance reports showing they have fully complied with the Order. 
Proposed Respondents further understand that they may be liable for 
civil penalties in the amount provided by law for each violation of the 
Order after it becomes final.

Order

I

    It is ordered that, as used in this Order, the following 
definitions shall apply:
    A. ``TCH'' or ``Thrifty'' means TCH Corporation, a corporation 
organized, existing, and doing business under and by the virtue of the 
laws of Delaware, its subsidiaries, divisions, and groups controlled by 
TCH, and their respective directors, officers, agents, representatives, 
and their respective successors and assigns.
    B. ``GEI'' means Green Equity Investors, L.P., an investment 
limited partnership organized, existing, and doing business under and 
by the virtue of the laws of Delaware, its general partners, 
subsidiaries, divisions, and groups controlled by GEI, and their 
respective directors, officers, agents, representatives, and their 
respective successors and assigns.
    C. ``Respondents'' means TCH and GEI.
    D. ``Commission'' means the Federal Trade Commission.
    E. ``Acquisition'' means the acquisition of the voting stock of 
PayLess Drug Stores Northwest, Inc., a wholly-owned subsidiary of Kmart 
Corporation, by Respondents TCH and GEI.
    F. ``Acquirer'' means the party or parties to whom Respondents TCH 
and GEI divest the assets herein ordered to be divested.
    G. ``Prescription drugs'' means ethical drugs available at retail 
only by prescription.
    H. ``PayLess Pharmacy Business'' means PayLess's business of 
selling prescription drugs at retail stores located in any of the 
cities or towns listed in Paragraph I.L. of this Order, but does not 
include PayLess's business of selling other products in those retail 
stores.
    I. ``PayLess Pharmacy Assets'' means all assets constituting the 
PayLess Pharmacy Business, excluding those assets pertaining to the 
PayLess trade name, trade dress, trade marks and service marks, and 
including but not limited to:
    1. Leases and properties, at the Acquirer's option;
    2. Zoning approval and registrations, at the Acquirer's option;
    3. Books, records, reports, dockets and lists relating to the 
PayLess Pharmacy Business;
    4. Lists of stock keeping units (``SKUs''), i.e., all forms, 
package sizes and other units in which prescription drugs are sold and 
which are used in records of sales and inventories;
    5. Lists of all customers, including but not limited to third party 
insurers, including all files of names, addresses, and telephone 
numbers of the individual customer contacts, and the unit and dollar 
amounts of sales, by product, to each customer;
    6. All names of prescription drug manufacturers and distributors 
under contract with PayLess;
    7. All price lists for prescription drugs, operating manuals, and 
advertising and promotional materials, at the Acquirer's option, but 
only if the divestiture is to an Acquirer that does not already operate 
a pharmacy in any location; and
    8. Goodwill, tangible and intangible, utilized in the sale of 
prescription drugs.
    J. ``Thrifty and Bi-Mart Pharmacy Business'' means Thrifty's 
business of selling prescription drugs at retail stores located in any 
of the cities or towns listed in Paragraph I.L. of this Order, but does 
not include Thrifty's business of selling other products in those 
retail stores.
    K. ``Thrifty and Bi-Mart Pharmacy Assets'' means all assets 
constituting the Thrifty and Bi-Mart Pharmacy Business, excluding those 
assets pertaining to the Thrifty and Bi-Mart trade names, trade dress, 
trade marks and service marks, and including but not limited to:
    1. Leases and properties, at the Acquirer's option;
    2. Zoning approvals and registrations, at the Acquirer's option;
    3. Books, records, manuals, dockets and lists, relating to the 
Thrifty and Bi-Mart Pharmacy Business;
    4. Lists of SKUs, i.e., all forms, package sizes and other units in 
which prescription drugs are sold and which are used in records of 
sales and inventories;
    5. Lists of all customers, including but not limited to third party 
insurers, including all files of names, addresses, and telephone 
numbers of the individual customer contacts, and the unit and dollar 
amounts of sales, by product, to each customer;
    6. All names of prescription drug manufacturers and distributors 
under contract with Thrifty;
    7. All price lists for prescription drugs, operating manuals, and 
advertising and promotional materials, at the Acquirer's option, but 
only if the divestiture is to an Acquirer that does not already operate 
a pharmacy in any location; and
    8. Goodwill, tangible and intangible, utilized in the sale of 
prescription drugs.
    L. ``Assets To Be Divested'' means either the PayLess Pharmacy 
Assets or the Thrifty and Bi-Mart Pharmacy Assets located in the 
following cities or towns:
    1. Bishop, California;
    2. Mt. Shasta, California;
    3. Taft, California;
    4. Florence, Oregon; and
    5. Ellensburg, Washington.

II

    It is further ordered that:
    A. Respondent shall divest, absolutely and in good faith, within 
one (1) year of the date this Order becomes final, the Assets To Be 
Divested.
    B. Divestiture of the Assets To Be Divested by Respondents shall be 
made only to an acquirer or acquirers that receive the prior approval 
of the Commission and only in a manner that receives the prior approval 
of the Commission. The purpose of the divestiture of the Assets To Be 
Divested is to ensure the continuation of the Assets To Be Divested as 
ongoing viable pharmacies engaged in the same businesses in which the 
Assets To Be Divested are presently employed and to remedy the 
lessening of competition resulting from the acquisition as alleged in 
the Commission's complaint.
    C. Pending final divestiture of the Assets To Be Divested, 
Respondents shall take such action as is necessary to maintain the 
viability and marketability of the Assets To Be Divested and shall not 
cause or permit the destruction, removal, wasting, deterioration, or 
impairment of any Assets To Be Divested except in the ordinary course 
of business and except for ordinary wear and tear.
    D. If a divestiture includes a lease of physical space, and if 
pursuant to that lease a Respondent through default of the lease or 
otherwise regains possession of the space, Respondents must notify the 
Commission of such repossession within thirty (30) days and must 
redivest such assets or interest pursuant to Paragraph II of this Order 
within six (6) months of such repossession.

III

    It is further ordered that:
    A. If Respondents have not divested, absolutely and in good faith 
and with the Commission's prior approval, the Assets To Be Divested 
within one (1) year of the date this Order becomes final, Respondents 
shall consent to the appointment by the Commission of a trustee to 
divest the Assets To Be Divested. Provided, however, that if the 
Commission has not approved or disapproved a proposed divestiture 
within 120 days of the date the application for such divestiture has 
been put on the public record, the running of the divestiture period 
shall be tolled until the Commission approves or disapproves the 
divestiture. In the event the Commission or the Attorney General brings 
an action pursuant to section 5(l) of the Federal Trade Commission Act, 
15 U.S.C. section 45(l), or any other statute enforced by the 
Commission, Respondents shall consent to the appointment of a trustee 
in such action. Neither the appointment of a trustee nor a decision not 
to appoint a trustee under this Paragraph shall preclude the Commission 
or the Attorney General from seeking civil penalties or any other 
relief available to it for any failure by Respondents to comply with 
this Order.
    B. If a trustee is appointed by the Commission or a court pursuant 
to Paragraph III.A. of this Order, Respondents shall consent to the 
following terms and conditions regarding the trustee's powers, duties, 
authorities, and responsibilities:
    1. The Commission shall select the trustee, subject to the consent 
of Respondents, which consent shall not be unreasonably withheld. The 
trustee shall be a person with experience and expertise in acquisitions 
and divestitures. If Respondents have not opposed, in writing, the 
selection of any proposed trustee within ten (10) days after notice by 
the staff of the Commission to Respondents of the identity of any 
proposed trustee, Respondents shall be deemed to have consented to the 
selection of the proposed trustee.
    2. The trustee shall, subject to the prior approval of the 
Commission, have the exclusive power and authority to divest the Assets 
To Be Divested.
    3. The trustee shall have twelve (12) months from the date the 
Commission approves the trust agreement described in Paragraph III.B.8. 
of this Order to accomplish the divestiture. If, however, at the end of 
the twelve-month period the trustee has submitted a plan of divestiture 
or believes that divestiture can be accomplished within a reasonable 
time, the twelve-month divestiture period may be extended by the 
Commission, or in the case of a court appointed trustee by the court; 
provided, however, the Commission may extend the twelve (12) month 
divestiture period only two (2) times.
    4. The trustee shall have full and complete access to the 
personnel, books, records, and facilities related to the Assets To Be 
Divested, or to any other relevant information, as the trustee may 
reasonably request. Respondents shall develop such financial or other 
information as such trustee may reasonably request and shall cooperate 
with the trustee. Respondents shall take no action to interfere with or 
impede the trustee's accomplishment of the divestiture. Any delays in 
divestiture caused by Respondents shall extend the time for divestiture 
under Paragraph III.B.3. in an amount equal to the delay, as determined 
by the Commission or for a court-appointed trustee, by the court.
    5. Subject to Respondents' absolute and unconditional obligation to 
divest at no minimum price and the purpose of the divestiture as stated 
in Paragraph II.B., the trustee shall use his or her best efforts to 
negotiate the most favorable price and terms available in each contract 
that is submitted to the Commission. The divestiture shall be made in 
the manner set out in Paragraph II of this Order. Provided, however, if 
the trustee receives bona fide offers from more than one acquirer, and 
if the Commission determines to approve more than one such acquirer, 
the trustee shall divest to the acquirer selected by Respondents from 
among those approved by the Commission.
    6. The trustee shall serve, without bond or other security, at the 
cost and expense of Respondents, on such reasonable and customary terms 
and conditions as the Commission or a court may set. The trustee shall 
have authority to employ, at the cost and expense of Respondents, such 
consultants, accountants, attorneys, investment bankers, business 
brokers, appraisers, and other representatives and assistants as are 
reasonably necessary to carry out the trustee's duties and 
responsibilities. The trustee shall account for all monies derived from 
the divestiture and all expenses incurred. After approval by the 
Commission and, in the case of a court-appointed trustee, by the court, 
of the account of the trustee, including fees for his or her services, 
all remaining monies shall be paid at the direction of Respondents and 
the trustee's power shall be terminated. The trustee's compensation 
shall be based at least in significant part on a commission 
arrrangement contingent on the trustee's divesting the Assets To Be 
Divested.
    7. Respondents shall indemnify the trustee and hold the trustee 
harmless against any losses, claims, damages, liabilities, or expenses 
arising out of, or in connection with, the performance of the trustee's 
duties including all reasonable fees of counsel and other expenses 
incurred in connection with the preparations for, or defense of any 
claim whether or not resulting in any liability, except to the extent 
that such liabilities, losses, damages, claims, or expenses result from 
misfeasance, gross negligence, willful or wanton acts, or bad faith by 
the trustee.
    8. Within ten (10) days after appointment of the trustee, and 
subject to the prior approval of the Commission and, in the case of a 
court-appointed trustee, of the court, Respondents shall execute a 
trust agreement that transfers to the trustee all rights and powers 
necessary to permit the trustee to effect the divestiture required by 
this Order.
    9. If the trustee ceases to act or fails to act diligently, a 
substitute trustee shall be appointed in the same manner as provided in 
Paragraph III.A. of this Order.
    10. The Commission or, in the case of a court-appointed trustee, 
the court, may on its own initiative or at the request of the trustee 
issue such additional orders or directions as may be necessary or 
appropriate to accomplish the divestiture required by this Order.
    11. The trustee shall have no obligation or authority to operate or 
maintain the Assets To Be Divested.
    12. The trustee shall report in writing to Respondents and to the 
Commission every sixty (60) days concerning the trustee's efforts to 
accomplish divestiture.

IV

    It is further ordered that, within sixty (60) days after the date 
this Order becomes final and every sixty (60) days thereafter until 
Respondents have fully complied with the provisions of Paragraphs II. 
and III. of this Order, Respondents shall submit to the Commission a 
verified written report setting forth in detail the manner and form in 
which they intend to comply, are complying, and have complied with 
those provisions. Respondents shall include in their compliance 
reports, among other things that are required from time to time, a full 
description of the efforts being made to comply with Paragraph II and 
III of the Order, including a description of all substantive contacts 
or negotiations for the divestiture and the identity of all parties 
contacted. Respondents also shall include in their compliance reports 
copies of all written communications to and from such parties, all 
internal memoranda, and all reports and recommendations concerning 
divestiture.

V

    It is further ordered that, for a ten (10) year period commencing 
on the date this Order becomes final, Respondents shall not, without 
the prior approval of the Commission, directly or indirectly, through 
subsidiaries, partnerships, or otherwise:
    (A) Acquire any stock, share capital, equity, leasehold or other 
interest in any concern, corporate or non-corporate, engaged in the 
business of selling prescription drugs at retail stores located in any 
of the cities or towns listed in Paragraph I.L. of this Order or 
previously engaged in the business of selling prescription drugs at 
retail stores located in any of the cities or towns listed in Paragraph 
I.L. of this Order within the six-month period prior to such 
acquisition; or
    (B) Acquire any assets used for, or previously used for (and still 
suitable for use for), the business of selling prescription drugs at 
retail stores located in any of the cities or towns listed in Paragraph 
I.L. of this Order. Provided, however, that these prohibitions shall 
not relate to the construction of new facilities or the acquisition or 
lease of facilities that have not operated as pharmacies within six 
months of the date of the offer to acquire or lease. Provided further, 
that the requirement of prior Commission approval set out in this 
Paragraph shall not apply to a Respondent contemplating an acquisition 
otherwise subject to prior Commission approval if, at the time of such 
acquisition, that Respondent does not own, directly or indirectly, any 
interest in the whole or any part of the stock or share capital of, any 
company that is engaged in the business of selling prescription drugs 
at retail stores located in any of the cities or towns listed in 
Paragraph I.L. of this Order or any asset used or previously used 
within the previous six-months in (and still suitable for use in) the 
business of selling prescription drugs at retail stores located in any 
of the cities or towns listed in Paragraph I.L. of this Order. 
Provided, however, that for any such acquisition exempted from the 
requirements of this Paragraph, each acquiring Respondent shall provide 
written notice to the Commission of such acquisition at least ten (10) 
days prior to such acquisition. Notwithstanding the foregoing, 
Respondent GEI may acquire, for investment purposes only, an interest 
of not more than five (5) percent of the stock or share capital of any 
concern. One year from the date this Order becomes final, annually 
thereafter for the next nine (9) years on the anniversary of the date 
this Order became final, and at such other times as the Commission may 
require, Respondents shall file with the Commission a verified written 
report setting forth in detail the manner and form in which they have 
complied and are complying with Paragraph V. of this Order.

VI

    It is further ordered that, for the purpose of determining or 
securing compliance with this Order, and subject to any legally 
recognized privilege, upon written request and on reasonable notice to 
Respondents, Respondents shall permit any duly authorized 
representatives of the Commission:
    A. Access, during office hours and in the presence of counsel, to 
inspect and copy all books, ledgers, accounts, correspondence, 
memoranda and other records and documents in the possession or under 
the control of Respondents relating to any matters contained in this 
consent order; and
    B. Upon five (5) days notice to Respondents, and without restraint 
or interference from Respondents, to interview officers or employees of 
Respondents, who may have counsel present, regarding such matters.

VII

    It is further ordered that either Respondent shall notify the 
Commission at least thirty (30) days prior to any change in the 
structure of Respondent TCH such as dissolution, assignment or sale 
resulting in the emergence of a successor, the creation or dissolution 
of subsidiaries or any other change that may affect compliance 
obligations arising out of the Order.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted 
provisionally an agreement containing a proposed Consent Order from TCH 
Corporation (``TCH'' or ``Thrifty'') and Green Equity Investors, L.P. 
(``GEI''), under which TCH and GEI would divest pharmacy assets in five 
(5) geographic locations where they face limited competition. TCH 
operates the Thrifty Drug Store Chain and the BiMart chain of discount 
stores.
    The proposed Consent Order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
Order.
    On December 1, 1993, TCH and Kmart Corporation (``Kmart'') entered 
into an agreement whereby GEI, through TCH, would acquire all the stock 
of PayLess Drug Stores Northwest, Inc. (``PayLess''), a wholly owned 
subsidiary of Kmart. The proposed complaint alleges that the proposed 
acquisition, if consummated, would constitute a violation of section 7 
of the Clayton Act, as amended, 15 U.S.C. 18, and section 5 of the FTC 
Act, as amended, 15 U.S.C. 45, in the market for the sale of 
prescription drugs in retail stores in the following towns: Bishop, 
California; Mt. Shasta, California; Taft, California; Florence, Oregon; 
and Ellensburg, Washington (hereinafter ``relevant geographic areas''). 
The proposed Consent Order would remedy the alleged violation by 
maintaining the current number of competitors in the relevant 
geographic areas where Thrifty and PayLess are direct competitors and 
where they face limited competition.
    The proposed Consent Order provides that within one (1) year of the 
Order becoming final, TCH and GEI shall divest all assets related to 
the retail sale of prescription drugs in PayLess or Thrifty retail 
stores in the relevant geographic areas. The divestiture of the PayLess 
or Thrifty pharmacy business in the relevant geographic areas shall be 
made only to an acquirer or acquirers that receive prior approval of 
the Commission and only in a manner that receives the prior approval of 
the Commission. The assets shall be divested to an eligible acquirer or 
acquirers that will operate a pharmacy business in the relevant 
geographic areas. Eligible acquirers in each relevant geographic area 
include, but are not limited to: Owners of retail stores that currently 
do not operate a pharmacy in that relevant geographic area; persons 
previously employed by Thrifty or PayLess; persons who will operate a 
pharmacy within an existing Thrifty or PayLess retail store; or persons 
who will open a new retail store. In the event that TCH and GEI have 
not divested the Thrifty or PayLess pharmacy assets in the relevant 
areas in one (1) year, the proposed Consent Order provides that TCH and 
GEI shall consent to the appointment by the Commission of a trustee to 
divest the pharmacy assets.
    Under the provisions of the Consent Order, TCH and GEI are also 
required to provide to the Commission a report of their compliance with 
the divestiture provisions of the Order within sixty (60) days 
following the date this Order becomes final, and every sixty (60) days 
thereafter until TCH and GEI have completely divested their interest in 
assets related to the retail sale of prescription drugs in the relevant 
geographic areas. The proposed Order will also prohibit TCH and GEI, 
for a period of ten (10) years, from acquiring, without Federal Trade 
Commission approval, any stock in any concern engaged in the business 
of selling prescription drugs at retail in the relevant geographic 
areas. However, if GEI sells Thrifty/PayLess and no longer owns any 
pharmacy businesses, it will not need to seek the Commission's prior 
approval of the acquisition of any businesses that have pharmacies in 
the relevant geographic areas. In addition, GEI may, without prior 
Commission approval, acquire up to five (5) percent of any companies' 
stock for investment purposes even if such a company may own pharmacies 
in the relevant geographic areas.
    One year from the date the Order becomes final and annually 
thereafter for nine (9) years, TCH and GEI will be required to provide 
to the Commission a report of their compliance with the Consent Order. 
The Consent Order also requires TCH or GEI to notify the Commission at 
least thirty (30) days prior to any change in the structure of TCH 
resulting in the emergence of a successor.
    The purpose of this analysis is to facilitate public comment on the 
proposed Order, and it is not intended to constitute an official 
interpretation of the agreement and proposed Order or to modify in any 
way their terms.
Donald S. Clark,
Secretary.

Statement of Commissioner Deborah K. Owen in the Matter of TCH 
Corporation

    I find reason to believe that the proposed acquisition of certain 
assets of Kmart Corporation by TCH Corporation and Green Equity 
Investors may violate section 5 of the FTC Act by substantially 
lessening competition with respect to acute care prescription drugs 
sold to cash customers in the Bishop and Mt. Shasta, California 
markets.\1\ In the absence of further investigation, I cannot find 
reason to believe that the Act has been violated with respect to the 
remaining allegations in the Commission's complaint.\2\ I therefore 
dissent with respect to those allegations, and with respect to any 
provisions in the order that are unnecessary to remedy the alleged 
anticompetitive effects in the product and geographic markets that I 
have supported.

    \1\I define acute care prescription drugs as those which are 
prescribed to fill an immediate need and are rarely refilled, such 
as antibiotics. Maintenance drugs, by contract, are those prescribed 
on an on-going basis and are regularly refilled, such as blood 
pressure medicine. The latter are more susceptible to competition 
from mail-order firms. I define cash customers to mean persons whose 
prescription purchases are not covered by managed care or other 
third-party payors. Such customers are less able to resist a price 
increase.
    \2\The rationale underlying my unwillingness to find reason to 
believe that the law has been violated where there has been 
insufficient investigation is detailed in my dissenting statement in 
the matter of QVC Network, Inc./Paramount Communications, Inc. (File 
No. 941-0008).
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[FR Doc. 94-7975 Filed 4-1-94; 8:45 am]
BILLING CODE 6750-01-M