LONDON – Private equity firms Blackstone Group, KKR & Co., Bain Capital Partners, Carlyle Group and others have been accused of agreeing not to compete with each other in recent buyout deals, according to reports about a civil antitrust lawsuit.
One of the e-mail trails cited as evidence indicated that Blackstone and KKR executives appeared to agree not to compete in the buyout of Freescale Semiconductor in 2006, according to a Bloomberg
report. [Get a 10% discount on ARM TechCon 2012 conference passes by using promo code EDIT. Click here to learn about the show and register.]
E-mails were also cited to support allegations that 11 of the largest private equity firms engaged in anti-competitive practices in 19 leveraged buyout deals and eight other transactions. The plaintiffs include former shareholders of the acquired companies, reports said.
Blackstone led a consortium of private equity firms that took Freescale private in September 2006, purchasing the former Motorola chip unit for $17.6 billion. Blackstone invested $1.2 billion in the deal.
While Blackstone helped structure the Freescale buyout, both Blackstone and Carlyle Group later wrote off 85 percent of the value of their holdings in Freescale.
In another deal, KKR teamed with Silver Lake Partners, Bain Capital and others to buy an 80 percent stake in NXP in August 2006 for 6.4 billion euros (about $8 billion). As with the Freescale deal, the value of NXP plummeted in 2008. In March 2009, KKR wrote down its holding in NXP to 10 percent of the purchase price.
It is not known whether the leveraged buyout of NXP is among the deals ensnared in the antitrust lawsuit.
The antitrust case focuses on whether private equity companies colluded to form consortia to bid on a buyouts as a way to avoid competition. Related links and articles:
Report: Blackstone wrote down Freescale stake by 85 percent
KKR writes NXP down to 10 percent of purchase price
Freescale acquired by equity firms for $17.6 billion