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FTC Questions AspenTech's Aquisition of Hyprotech Tuesday, March 16, 2004 FTC Questions AspenTech's Aquisition of Hyprotech In May, 2002, Aspen Technology, a Cambridge Mass. supplier of process plant modeling software, acquired Hyprotech Ltd., a Calgary based simulation software vendor then owned by AEA Technology. Shortly after the acquisition the U. S. Federal Trade Commission (FTC) began an investigation into the acquisition. In August, 1993 the FTC filed an administrative complaint charging that the acquisition “was anticompetitive and led to the elimination of a significant competitor in the provision of process engineering simulation software for industry”. “AspenTech’s purchase of Hyprotech directly led to the combination of two of the three largest firms in the development and sale of certain process engineering simulation software,” said Susan Creighton, Director of the FTC’s Bureau of Competition. “Although the fact that a merger has been consummated increases the complexity of the Commission’s decision to seek relief, that hurdle is not sufficient for the agency to forgo a challenge to a transaction that is likely to lead to anticompetitive effects.” The FTC decided that there are sufficient reasons to warrant a trial before an administrative law judge, with arguments from both sides. The final outcome is not likely to be known for several years. According to the FTC, before acquiring Hyprotech, AspenTech’s customers included 46 of the world’s 50 largest chemical companies, 23 of the 25 largest petroleum companies, and 18 of the 20 largest pharmaceutical companies. The company develops a variety of software products, including engineering simulation software that it licenses to external clients. Hyprotech’s clients included 14 of the world’s 15 largest oil refiners, 13 of the top 14 chemical companies, eight of the top 10 pharmaceutical companies, and all of the top air processing companies. Like AspenTech, Hyprotech developed simulation and optimization software for use in industrial applications. AspenTech claims to be cooperating fully with the FTC investigation, and continues to maintain that the Hyprotech acquisition did not lessen competition. “We do not agree with the FTC’s assertions but, on the contrary, are confident that the acquisition has brought significant benefits to our customers and is not anticompetitive,” said David McQuillin, president and chief executive officer of AspenTech. “Over the past year we have worked closely with our customers to develop new innovations that would have been impossible prior to the merger. We will continue to bring these new innovations to market and fulfill our customers’ expectations promised by the merger. We believe a vigorous defense against the allegations of the complaint is in the best interests of our customers and our shareholders and that is what we intend to do.” Information in this article was taken from FTC documents and from AspenTech’s press release. Resources: FTC press release http://www.ftc.gov/opa/2003/08/aspen.htm Text of complaint: http://www.ftc.gov/os/2003/08/aspencmp.pdf AspenTech’s response to complaint: http://www.ftc.gov/os/adjpro/d9310/030902respanswertocmplt.pdf Docket file list: http://www.ftc.gov/os/adjpro/d9310/index.htm AspenTech's press release: http://www.aspentech.com/publication_files/pr8-7-03.htm |