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New Jersey business merger: Limitations put on planned merger

New Jersey readers may have heard that Honeywell International has arranged to purchase Intermec, a maker of mobile computing devices. When a business merger of this size is proposed, it has to be approved by the Federal Trade Commission's Bureau of Competition (FTC). This is done in order to ensure that a merger doesn't create a monopoly that stifles fair competition.

Honeywell, which is based in New Jersey, has received approval from the FTC to go forward with the merger on certain conditions. Intermec manufactures bar code scanners for retailers, radio frequency identification (RFID) readers and other products related to these items. As a condition of the sale, Honeywell is required to sign over the licenses for Intermec patents that are used to manufacture "two-dimensional bar code scanners" to an overseas company called Datalogic IP TECH s.r.l. for 12 years.

The FTC believes this will allow competition to remain viable in markets where not having access to certain technologies would stifle growth since the Italian company can come into the American market through the use of the patents. The sale has also been approved by the EU. The EU has no concerns about unfair competition since its research shows there are satisfactory competitors in the market.

When New Jersey businesses are looking to conduct a business merger, it is important to be sure that all of the appropriate federal, state and local agencies have been notified to be sure that their approval is received, if needed. It is not enough to simply sign a purchase agreement and have the seller hand over the keys, so to speak. Without the proper approvals, a merger will not be considered complete.

Source: Reuters, U.S. puts conditions on Honeywell's Intermec purchase, Ros Krasny, Sept. 13, 2013

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