Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, January 6, 1994 TAG: 9401060086
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Associated Press
DATELINE: CHICAGO LENGTH: Medium
Donnelley said it would appeal the order to the federal courts, if necessary, to retain the plants, which it acquired in its 1990 purchase of the Meredith-Burda companies.
"The company believes the acquisition was legally proper," said David Hart, a Donnelley vice president and general counsel.
The other plants are in Casa Grande, Ariz.; Des Moines, Iowa; and Newton, N.C. Together, they employ about 2,500 people, said James Ratcliffe, a spokesman for Chicago-based Donnelley.
FTC Administrative Law Judge Lewis Parker upheld 1990 FTC charges that the acquisition could substantially reduce competition in high-volume gravure printing, a technique used for magazines, catalogs, advertising inserts and other large-volume multipage publications.
Donnelley is the world's largest commercial printer, with $4.2 billion in 1992 sales. Ratcliffe said he could not say how much of the company's printing was done at the former Meredith-Burda plants.
Donnelley said it will appeal the order to the full trade commission, which would have the effect of staying the judge's order. It has 30 days to appeal.
Parker wrote that the $536.5 million acquisition of Meredith-Burda gave Donnelley between 42.9 percent and 48.7 percent of the U.S. market share for high-volume gravure printing. Donnelley's dominant market share "suggests the company can unilaterally raise prices and restrict output to some customers," he wrote.
He rejected Donnelley's argument that the plants compete with those doing offset printing, another technique. Before the acquisition, just six U.S. companies were competing for high-volume gravure printing work, with little likelihood of new entrants, Parker wrote.
The judge ordered Donnelley to divest the plants within 12 months of the date the order becomes final, which would occur in 30 days unless appealed.
by CNB