Attorney General Raoul, FTC File Complaint To Block Merger Of Commercial Playground Equipment Companies Playpower, Burke
The complaint alleges the deal could raise prices and reduce innovation, service and quality in an already concentrated market.
CHICAGO – Attorney General Kwame Raoul, as part of a bipartisan coalition of 12 attorneys general, and the Federal Trade Commission (FTC) today filed a lawsuit to block PowerPlay’s acquisition of BCI Burke (Burke), which are two of the largest makers of commercial outdoor playground equipment.
Raoul and the coalition’s complaint alleges the potential merger will drive up prices and decrease innovation and quality for equipment bought by schools, churches, parks and recreation departments, and other organizations across the country.
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“I am proud to join the FTC and my colleagues in moving to stop this illegal merger between two of the country’s largest playground manufactures, which would significantly raise prices for Illinois schools and park districts in an already over-priced market,” Raoul said. “I am committed to pushing for lower prices and preserving competition, regardless of the industry, which is why I will continue to push back on illegal mergers.”
“Playgrounds are an indispensable part of daily life for millions of American kids and their families. And state and local governments spend hundreds of millions of taxpayer dollars each year on playgrounds so that their communities have places for kids to play safely,” said Daniel Guarnera, Director of the FTC’s Bureau of Competition. “Instead of investing in building better playgrounds or lowering prices, PlayPower and its parent Platinum Equity want to eliminate one of PlayPower’s fiercest competitors and continue to raise prices on American schools, parks departments, churches and municipalities.”
Raoul and the coalition allege in their complaint that the deal will significantly increase concentration in an already concentrated market and eliminate PlayPower and Burke’s intense rivalry, which benefits playground customers through lower prices, better services, higher quality and increased innovation. The lawsuit further explains this is problematic because playground prices are already quickly rising.
Today, five companies — including PlayPower and Burke — own more than a dozen playground equipment brands and hold 85% to 90% market share in the United States, according to the complaint. The proposed transaction would add the Burke brand to PlayPower’s existing commercial outdoor playground portfolio, which includes Miracle Recreation Equipment Company, Little Tikes Commercial and Playworld Systems Inc. — brands PlayPower previously acquired.
In addition to driving up prices, Raoul and the coalition explain in the complaint the merger will likely lead to less innovation and poorer service and quality by eliminating Burke’s focus on providing innovative, high-quality products and robust service. They allege the proposed acquisition could also have a negative impact on independent sales representatives who sell the companies’ equipment, leading to lower commissions or worse service terms.
Joining Raoul and the FTC in filing this lawsuit are the attorneys general of Arizona, California, Colorado, Nevada, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Washington and Wisconsin.
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