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Bates White analysis paves the way for
The Great Atlantic & Pacific Tea Company’s
acquisition of Pathmark Stores, Inc.
WASHINGTON, D.C., January 14, 2008—Bates White, LLC successfully supported Axinn, Veltrop & Harkrider LLP
in its representation of The Great Atlantic & Pacific Tea Company (A&P) before the Federal Trade
Commission and various state attorneys general in connection with A&P’s $1.4 billion acquisition of
Pathmark Stores, Inc. Under the terms of a consent order, the FTC ultimately allowed A&P to acquire Pathmark,
provided it divest six of Pathmark’s 141 stores. Industry analysts had anticipated a much larger divestiture
package of up to 30 stores.
The Bates White team, led by Dr. Halbert White, worked closely with
attorneys at Axinn, Veltrop & Harkrider and executives at A&P to construct a rich data set and to analyze
the effects of entry and exit of nearby competitors. Building on similar methods used to analyze mergers in
Staples and Whole Foods, and using advanced econometric techniques, Bates White assessed how
gross margins, prices, and dollar sales changed subsequent to entry and exit events within a local geographic area.
Bates White’s analysis demonstrated that Pathmark did not uniquely constrain A&P pricing, but that many
other competitors constrain A&P pricing, including mass merchandisers and club stores.
According to Dr. White, who is also Professor of Economics at University of California, San Diego, “I am
confident that the FTC’s decision was, in large part, a result of our analysis, which provided compelling
quantitative evidence to back up the qualitative evidence presented to the FTC.” Michael Keeley of Axinn,
Veltrop & Harkrider, a lead counsel for A&P in the transaction, observed that “Bates White’s
role in this case was important to its successful outcome. The firm consistently provided sound, robust empirical
merger and econometric analysis.”
For more information, download the case study: http://www.bateswhite.com/news/pdf/AP_Case_Study.pdf
About Bates White
Bates White is a consulting firm offering services in economics, finance, and
business strategy to leading law firms, Fortune 500 companies, and government agencies. We provide our clients with a
unique combination of quantitative and analytical expertise, and an understanding of business issues across a range
of industries. Bates White has offices in Washington, D.C., and San Diego, Calif.
www.bateswhite.com
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