The merger would have resulted in Lockheed Martin obtaining a monopoly position in airborne early warning radar, electro-optical missile warning systems, directed infrared countermeasures systems, the SQQ-89 antisubmarine warfare combat system, and fiber-optic towed decoys, which would likely have led to higher costs, higher prices, and less innovation for systems required by the U.S. military. More generally, the merger would have reduced competition in the sale of advanced tactical and strategic aircraft, airborne early warning radar systems, sonar systems, and several types of countermeasure systems that are designed to alert aircraft pilots to threats and help them respond to those threats. On July 16, 1998, the parties abandoned the transaction.
In United States v. Lehman Brothers Holdings Inc. and L-3 Communications Holdings, Inc., the Division challenged L-3 Communications' ("L-3") proposed acquisition of Allied Signal's Ocean Systems Business, and Allied Signal ELAC Nautik GmbH ("Ocean Systems") and simultaneously filed a proposed consent decree requiring L-3 to put in place procedures to ensure Ocean Systems' independence as a competitor for future submarine detector contracts. Ocean Systems and Lockheed Martin Corporation ("Lockheed Martin") were the leading providers of submarine detectors used on United States Navy surface combat vessels and submarines, known as towed sonar arrays. Lockheed Martin owned 34 percent of the common stock of L-3 and controlled three of 10 seats on L-3's Board of Directors. The complaint alleged that the proposed acquisition would have lessened competition substantially because there was a strong likelihood that competitively sensitive information concerning L-3's design, production, and bid plans for towed arrays would be shared with Lockheed Martin. The consent decree required L-3 to establish a "firewall" prohibiting employees of L-3 and Lockheed Martin from disclosing information to each other on the development and production of towed arrays. The decree also ensured that the Department of Defense will have both competitors for its future programs by preventing them from teaming on upcoming bids for towed array contracts. The decree was entered by the court on July 13, 1998.
In United States v. CBS Corporation and American Radio Systems Corporation, the Division challenged the $1.6 billion acquisition of American Radio Systems ("ARS") by CBS. The complaint alleged that the acquisition would likely have resulted in higher radio advertising prices in Boston, Massachusetts, St.Louis, Missouri, and Baltimore, Maryland. The acquisition would have resulted in CBS having 59 percent of Boston's radio advertising revenues, 49 percent in St.Louis and 46 percent in Baltimore. A proposed consent decree was filed simultaneously settling the suit. The decree required CBS to divest seven radio stations -- four in Boston (WEEI-AM, WAAF-FM, WEGQ-FM, WRKO-AM), two in St.Louis (KSD-FM, KLOU-FM) and one in Baltimore (WOCT-FM) -- reducing CBS's share of radio advertising revenue in each of the three cities to no more than 40 percent. The decree was entered by the court on June 30, 1998.
In United States v. Hicks, Muse, Tate & Furst Incorporated, Capstar Broadcasting Partners, Inc. and SFX Broadcasting, Inc., the Division challenged the $2.1 billion acquisition of SFX Broadcasting by Capstar Broadcasting Partners, Inc. The complaint alleged that the acquisition would likely have resulted in higher radio advertising prices in Greenville, South Carolina, Houston, Texas, Pittsburgh, Pennsylvania, Jackson, Mississippi and Suffolk County, New York. The acquisition would have resulted in Capstar and its related entities -- Hicks, Muse, Tate & Furst Incorporated and Chancellor Media Corporation -- having 74 percent of radio advertising revenues in Greenville, 43 percent in Houston, 44 percent in Pittsburgh, 57 percent in Jackson and 65 percent in Suffolk County, New York. A proposed consent decree was filed simultaneously settling the suit. The decree required Capstar to divest 11 radio stations -- four in Greenville (WESC-FM and AM, WJMZ-FM, WTPT-FM), one in Houston (KKPN-FM), one in Pittsburgh (WTAE-AM), one in Jackson (WJDX-FM) and four SFX stations in Long Island, New York (WBLI-FM, WBAB-FM, WHFM-FM, WGBB-AM).
