FTC Authorizes Injunction to Pre-empt Meade Instruments' Purchase of All, or Certain Assets, of Tasco Holdings, Inc.'s Celestron International

For Release: May 29, 2002

Companies are Leading U.S. Manufacturers of Performance and Schmidt-Cassegrain Telescopes

The U.S. Federal Trade Commission today authorized staff to seek a temporary restraining order and a preliminary injunction in federal district court to pre-empt any attempt by Meade Instruments Corporation (Meade), the leading manufacturer of performance telescopes and Schmidt-Cassegrain telescopes in the United States, to purchase all, or certain assets, of Tasco Holdings, Inc.'s Celestron International (Celestron), the number-two performance telescope provider in the U.S. and the only other supplier of Schmidt-Cassegrain telescopes. According to the FTC's complaint, an acquisition by Meade of Celestron assets would impact adversely the performance telescope market by eliminating substantial actual competition between the two companies, and by creating a monopoly in the market for Schmidt-Cassegrain telescopes.

Meade has indicated its strong interest in acquiring all, or some of, Celestron's assets, which may or may not be reportable under the Hart-Scott-Rodino (HSR) Premerger Notification Act. The Commission action announced today authorizes FTC staff to seek a preliminary injunction and other necessary temporary relief to prevent Meade from purchasing Celestron in whole or in part.

"Celestron is Meade's most significant competitor in the performance telescope market and its only competitor in the market for Schmidt-Cassegrain telescopes," said Joseph Simons, Director of the FTC's Bureau of Competition. "The Commission's proactive action in authorizing staff to seek an injunction to stop the combination of these two companies is in the best interest of consumers and will allow another purchaser to acquire Celestron's assets and maintain competition in these telescope markets."

Simons noted that in 1991, the Commission gave final approval to a consent agreement settling charges that a proposed joint venture between Meade and Celestron would have created a virtual monopoly in the manufacture and sale of mid-size Schmidt-Cassegrain telescopes - one of the same product markets at issue in the present matter. The agreement placed a 10-year requirement on Harbour Group and Diethelm (the former parents of Meade and Celestron) to obtain FTC approval before acquiring any company that manufactures or sells Schmidt-Cassegrain telescopes in the United States. The consent agreement followed a decision by the U.S. District Court for the District of Columbia granting the Commission's motion for a preliminary injunction barring the acquisition of any assets or other interest in Celestron International by Harbour Group Investments, L.P. (Meade's parent), and further barring Diethelm Holding Ltd. (Celestron's parent) from acquiring any assets or other interest in Meade. (FTC v. Harbour Group Investments, 1990 US Dist. LEXIS 15542 (D.D.C. 1990))

Based in Irvine, California, Meade is a multinational consumer optics company that designs, manufactures, imports, and distributes telescopes, telescope accessories, binoculars, and other optical products. The company offers a wide range of telescopes and telescope accessories, including more than 50 different models with several different optical configurations, ranging in price from less than $100 to more than $15,000. Meade is the largest telescope supplier in the United States, with dominant positions in the markets for performance telescopes and Schmidt-Cassegrain telescopes.

In the United States and Canada, Meade distributes its products through a network of more than 500 specialty retailers, mass merchandisers, and national mail order dealers. Most of the company's astronomical telescopes are manufactured in Irvine, California. Meade also has an assembly plant in Tijuana, Mexico. In its most recent fiscal year, Meade reported sales of $123 million, with $113 million of this attributable to the sale of telescopes and related accessories, and $97 million of the total derived from North American sales.

Tasco Holdings, based in Miramar, Florida, is the parent company of Tasco Worldwide and Celestron. Tasco Worldwide is one of the largest suppliers of entry-level telescopes in the United States. Celestron, a Torrance, California-based manufacturer of high-quality optics (including telescopes and related accessories) was acquired by Tasco in June 1998. Celestron is second only to Meade in the sale of performance telescopes, including Schmidt-Cassegrain telescopes, and has very strong brand-name recognition among serious amateur astronomers for superior optics, outstanding design, and innovative technology. Celestron sells its products through a variety of specialty retail outlets and mail order catalogs.

The Commission's Complaint

According to the FTC's complaint, the potential combination of Meade and Celestron would raise significant competitive concerns and would violate the FTC Act and Section 7 of the Clayton Act. Specifically, the Commission contends that the two companies together would monopolize the market for Schmidt-Cassegrain telescopes and would eliminate substantial actual competition between Meade and Celestron in the market for performance telescopes. Such a combination, the complaint states, would likely result in anticompetitive activity in the two markets at issue. Finally, the complaint states that entry into the relevant telescope markets sufficient to deter or counteract the anticompetitive effects of the proposed acquisition is unlikely to occur.

The Commission vote authorizing staff to seek a temporary restraining order and a preliminary injunction to block the potential combination of Meade and Celestron was 5-0.

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Copies of the Commission's complaint will be available upon filing from on the FTC's Web site at www.ftc.gov. The FTC's Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Evaluation, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, D.C. 20580, Electronic Mail: antitrust@ftc.gov; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published "Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws," which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.

MEDIA CONTACT:
Mitchell J. Katz
Office of Public Affairs
202-326-2161

STAFF CONTACTS:
Joseph J. Simons
Director, Bureau of Competition
202-326-3300

Michael R. Moiseyev
Bureau of Competition
202-326-3106

(FTC File No. 021-0127)

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