Crowley Marine Services, Inc. Acquisition of Northland Fuel LLC

The Situation

In 2003 Crowley Marine Services, Inc. announced its intention to acquire Northland Fuel LLC. In response, a group of eight Western Alaska-based electric utilities initiated litigation challenging the proposed merger. The Attorney General of Alaska also opposed the merger on the grounds that it would lead to the elimination of competition in the delivery of petroleum products to locations in western Alaska and along interior Alaska rivers. The merging parties and the Alaska Attorney General eventually entered into a consent decree, which required divestiture of bulk storage facilities, tugs, and barges to a competitor, Delta Western. However, the utilities group subsequently challenged the consent decree, arguing that it would not adequately preserve competition and prevent increases in fuel prices.

NERA's Role

A NERA team led by Senior Vice President Dr. Alan Cox assisted Crowley in both the litigation and the negotiations surrounding the consent decree. Dr. Cox's white paper, which was instrumental in the construction of the consent degree, outlined the extent of competition in the region for the delivery of petroleum products, as well as the scope of the relevant geographic market. NERA's expert report and live testimony in court rebutted plaintiffs' contentions regarding competitive impacts.

The Result

Alaska Superior Court Judge Ben Esch denied the utilities' request that the merger be prevented, and Crowley was able to complete its acquisition of Northland Fuel on 5 September 2005.