ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Wednesday, January 8, 1997 TAG: 9701080040
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: Associated Press
STIFF COMPETITION in the industry may remain. The largest operator closes the lid on plans to buy its rival, afraid the takeover might put it in the hole.
Service Corp. International, the world's largest funeral home operator, on Tuesday called off its hostile attempt to acquire rival Loewen Group, saying Loewen's rapid expansion made a purchase too risky.
Saying it wanted to remain independent, Loewen twice rejected offers from Houston-based Service Corp., which sweetened its bid to about $2.7 billion in October. Service Corp. had said it would take the offer directly to Loewen shareholders.
Loewen, based in Burnaby, British Columbia, also sued Service Corp., claiming the proposed deal would crush competition in the U.S. funeral home industry. A combination would have created a company with about 3,750 funeral homes and 600 cemeteries worldwide.
Service Corp. said Loewen's deals to buy the Rose Hills Memorial Park in California and Prime Succession Inc., the largest privately owned funeral home operator in North America, were too risky.
The company also cited costs associated with Loewen's executive payments and uncertainty about how much it might have to sell off to satisfy regulators.
Loewen said last year it planned to spend $500 million a year on acquisitions.
Both companies operate funeral homes in Southwest Virginia. Service Corp. owns Lotz Funeral Homes, with locations in Roanoke, Vinton and Salem; Rader Funeral Home Inc. in Daleville and Buchanan; and Whitten Funeral Homes Inc. in Lynchburg.
Loewen's holdings include Lynch Funeral Home in Rocky Mount, Diuguid Funeral Service in Lynchburg, Lomax Funeral Home in Buena Vista, Collins Funeral Services in Bassett and McKee Funeral Services in Martinsville.
LENGTH: Short : 44 linesby CNB