The US FTC requires an investing firm to relinquish voting rights for members of the board of directors and install an internal firewall before allowing the firm to acquire simultaneous interests in competing firms in gasoline terminaling services (Carlyle / Kinder Morgan)

On January 25, 2007, the Federal Trade Commission (the “FTC”) announced a complaint challenging the acquisition of a 22.6 percent equity interest in Kinder Morgan, Inc. (“KMI”) by The Carlyle Group (“Carlyle”) and Riverstone Holdings (“Riverstone”). Simultaneously, the FTC made public an order settling the complaint and allowing the transaction to proceed if Carlyle and Riverstone convert their interests in a competitor of KMI into a passive investment. As discussed below, the FTC’s actions signal both increased antitrust scrutiny of private-equity firms and a willingness by the FTC to agree to remedies other than divestiture in the private- equity arena. In August 2006, KMI announced that it had entered into a definitive merger agreement pursuant to which a group of investors, including one

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Authors

  • Fried Frank Harris Shriver & Jacobson (Washington)
  • Willkie Farr & Gallagher (Washington)

Quotation

Barry A. Nigro, Theodore C. Whitehouse, The US FTC requires an investing firm to relinquish voting rights for members of the board of directors and install an internal firewall before allowing the firm to acquire simultaneous interests in competing firms in gasoline terminaling services (Carlyle / Kinder Morgan), 14 March 2007, e-Competitions March 2007, Art. N° 53255

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