NERA's Role in Service Corporation International's Acquisition of Stewart Enterprises, Inc.

The Situation

In 2013, the US Federal Trade Commission (FTC) and several state Attorneys General announced plans to review Service Corporation International’s (SCI) proposed acquisition of the second-largest funeral, cremation, and cemetery services provider in North America, Stewart Enterprises.

NERA's Role

NERA Academic Affiliate Dr. Elizabeth Bailey, Adjunct Professor at the University of California, Berkeley's Haas School of Business, assisted SCI's outside legal counsel, Shearman & Sterling LLP and Hunton & Williams LLP, during the extensive review by the FTC and eight state attorneys general of the proposed acquisition of Stewart by SCI. NERA's team, led by Dr. Bailey, helped counsel address competitive concerns raised by the FTC in over 100 geographic areas, including multiple markets where the commission’s concerns focused on specific ethnic and religious populations. NERA's team also assisted SCI and its counsel in responding to the FTC's Request for Additional Information, commonly referred to as a "Second Request."

The Result

On December 23, 2013, SCI announced its completion of the $1.4 billion deal after it reached an agreement with the FTC requiring it to divest 91 locations, with 2012 EBITDA of approximately $53 million.

Partner Jessica Delbaum of Shearman & Sterling said "The assistance provided by Liz Bailey and the economists at NERA throughout the FTC's investigation, including the Second Request compliance process, was invaluable." Amanda Wait, partner at Hunton & Williams, commented "NERA's in-depth industry knowledge and rigorous analytical techniques were extremely useful in addressing competitive concerns raised by the FTC and, ultimately, reaching agreement with the FTC."