PlayPower drops playground equipment merger a week after Illinois and FTC sue

PlayPower has abandoned its planned purchase of BCI Burke, another of the country’s largest makers of commercial playground equipment, about a week after Illinois, 11 other states and the Federal Trade Commission sued to block the deal.^{1, 2, 3} Illinois Attorney General Kwame Raoul’s office and the FTC announced the decision Tuesday.^{1, 2}

The companies ended their merger agreement less than a week after the lawsuit was filed, according to Raoul’s office.¹ The coalition has filed a notice of dismissal in the U.S. District Court for the Northern District of California, where the case was brought.^{1, 3}

What the states argued

The lawsuit said the merger would raise prices and cut quality, service and innovation for the schools, churches, parks and recreation departments and other organizations that buy playground equipment.^{1, 3} Five companies, including PlayPower and Burke, hold 85% to 90% of the U.S. market for commercial outdoor playground equipment, according to the coalition.^{1, 2}

The FTC said the deal would have cut the number of major manufacturers from five to four.² It also said small manufacturers often lack the distribution, sales staff, safety certifications, capacity and product range to replace the competition that would be lost.² State and local governments spend hundreds of millions of dollars on playground equipment each year, the agency said.²

What officials said

“I will continue to push back on similar illegal mergers,” Raoul said in a statement.^{1, 3} He credited his office’s Antitrust Bureau with stopping the deal, according to the release.¹

Daniel Guarnera, director of the FTC’s Bureau of Competition, called the outcome “a win for American consumers.”^{1, 2} He said it would help keep down what schools, churches, daycares and parks departments pay for playgrounds.²

The FTC described PlayPower as a portfolio company of Platinum Equity.²

Who joined the case

Illinois was joined by the attorneys general of Arizona, California, Colorado, Nevada, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Washington and Wisconsin.¹ CBS Chicago described the group as bipartisan.³