FTC Approves Formation Of Bereavement Voltron: SCI Can Acquire Rival

If you don’t want anyone to pay attention to a piece of news, be sure to put out your press release just before the biggest holiday of the year. On December 23, the Federal Trade Commission released the news that it has given its blessing for the largest company in America’s “death care” industry, Service Corporation International, to go ahead and acquire the second-largest company in the same business, Stewart Enterprises, Inc.

You may not have heard of either company, but one of them probably runs a death-care business somewhere near you. More likely SCI, which owns around 1,450 funeral homes, 374 cemeteries (including 213 combination funeral homes/cemeteries) and 100 crematories. They’re the parent company of Neptune Society. That was one of the hurdles for this merger, in fact: the FTC identified 59 markets where the union of the two companies would eliminate competition and be generally bad for consumers. All of the funeral homes in town might have different names, but if they have the same parent company, that means they can charge higher prices. A merger between two competitors might “substantially increase the risk of collusion between SCI and the few remaining competitors,” warns the FTC.

In the affected markets, the FTC will require the two companies to sell 53 funeral homes and 38 cemeteries sometime in the next six months before they get hitched, in order to maintain healthy competition in the funeral business in that area.

If you’ve forgotten the major plotlines of HBO’s “Six Feet Under,” you can read up on SCI’s business model and the major complaints about the company in this great Businessweek piece from October.

FTC Puts Conditions on Service Corporation International’s Proposed $1.4 Billion Acquisition of Rival Funeral and Cemetery Services Provider [FTC]
How a Funeral Giant Overcame Antitrust Concerns and Gobbled Up Its Rival [Businessweek]

FURTHER READING:
Is Funeral Home Chain SCI’s Growth Coming at the Expense of Mourners? [Businessweek]