WASHINGTON -- The Justice Department filed suit Wednesday to block a deal it said would eliminate competition in the sale of pumps used in 90 percent of U.S. gas stations to transfer gasoline from underground tanks to surface dispensers.
The civil antitrust suit, filed in U.S. District Court in Madison, Wis., would block a proposed joint venture between Franklin Electric Co. Inc. and United Dominion Industries Inc.
The deal would combine the assets of Franklin Electric's subsidiary FE Petro and the petroleum related assets of United Dominion's subsidiary, The Marley Co.
The two subsidiaries now compete with each other and are the only two companies that produce and sell submersible turbine pumps in this country. The government said Marley's ''Red Jacket'' turbine pumps have 60 percent of the market, compared with 40 percent for FE Petro's pumps.
The government said FE Petro introduced new technology in the 1990s and had taken market share from Marley.
The joint venture would be 75 percent owned by Franklin Electric and 25 percent by Marley.
''This proposed joint venture would create a monopoly in the sale of submersible turbine pumps in the United States, resulting in higher prices, less innovation and lower quality service for customers,'' Assistant Attorney General Joel I. Klein said. ''We brought this suit to preserve the benefits of competition for the owners and operators of gasoline service stations that require these pumps to operate their businesses.''
Headquartered in Bluffton, Ind., Franklin Electric reported 1999 sales of $293.2 million. Its FE Petro subsidiary produces submersible turbine pumps at a plant in McFarland, Wis.
A wholly owned subsidiary of United Dominion Industries Limited, United Dominion is headquartered in Charlotte, N.C. United Dominion Industries Limited is a Canadian corporation with sales of $2.15 billion in 1999. Its Marley subsidiary produces the pumps at a plant in Davenport, Iowa.
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