Macy-Federated merger garners FTC's support

August 20, 1994|By New York Times News Service

The Federal Trade Commission has effectively approved the merger of R. H. Macy & Co. and Federated Department Stores Inc., removing another potential obstacle to a combination of the two department store companies.

Federated said yesterday that the FTC had terminated its investigation into possible antitrust issues raised by the merger. While the agency does not formally approve such deals, the end of its inquiry effectively clears the way for the Federated-Macy union to go forward.

The two companies must still satisfy state regulators that their combination will not result in reduced competition.

New York state Attorney General G. Oliver Koppell has been pursuing a particularly dogged review of the two companies' operations in the New York City area, where Macy's competes with three units of Federated: Abraham & Straus, Bloomingdale's and Stern's.

"Our investigation is still going forward," Richard Barr, a spokesman for Mr. Koppell, said. He said he did not know when Mr. Koppell's review would be concluded.

Macy's and Federated's stores are the dominant department store retailers in the Miami, Atlanta and New York metropolitan regions, but they represent only a small portion of all retail sales in those areas.

Sen. Howard M. Metzenbaum, an Ohio Democrat, said yesterday that he was disappointed in the FTC's decision, because he thought the merger would result in higher prices for consumers.

"The FTC has done a good job in the past," he said. "But in this case, it's a letdown of the American consumer."

Although Macy and Federated announced their intention to merge in July, the FTC had been reviewing the implications of such a combination for more than six months, since Federated began its courtship, said Phillip A. Proger, the lawyer who represented Federated in its dealings with the agency.

He said the company had supplied the commission thousands of documents and spent countless hours answering hundreds of questions raised by regulators.

"We're pleased that they have reached the conclusion that this merger does not warrant any further investigation," he said.

The merger, which is expected to be completed in December, will get Macy out of bankruptcy protection. It still requires the formal approval of Macy's creditors, although they have informally given their support, and of Judge Burton R. Lifland, the U.S. Bankruptcy Court judge who is presiding over Macy's case.

Most analysts had expected the FTC to clear the merger, which will create a $14 billion department store company.

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