In late 2014, the Texas Attorney General (AG) office opened an investigation of possible anticompetitive effects from the previously consummated acquisition by Leslie’s Pool Supplies of the Texas-based chain Warehouse Pool Supplies. The Texas AG office claimed that prices of pool supplies had increased in the areas where both chains operated stores before the merger. A Compass Lexecon team including Jon Orszag, Eugene Orlov, Dan Stone and others in our Chicago office was retained by Sean Royal and Joshua H. Soven of Gibson, Dunn & Crutcher LLP to analyze the competitive effects of the merger. We performed numerous econometric analyses. These analyses showed a lack of any significant price effects from the transaction, and illustrated the presence of significant competition in the relevant areas. We presented these empirical results to the Texas AG office, which closed its investigation immediately following our presentation.
- Daniel W. Stone
- Jonathan M. Orszag