Global Fastener News

October 23, 1991 FIN – Textron Inc’s acquisition of Avdel plc, a fastener company based in the United Kingdom, did not violate the anti-merger provisions of the Clayton and FTC Acts. That’s the recent ruling of a FTC administrative law judge who has dismissed the FTC complaint first filed in 1989.

Textron acquired Avdel plc, based in Wellwyn Garden City, England, for approximately $250 million in early 1989. In February 1989, the FTC filed a complaint challenging the acquisition and obtained a preliminary injunction prohibiting Textron from exercising control over Avdel.
As a result, Textron was prevented from consolidating the earnings of Avdel even though it continued to pay interest on its investment.
The judge’s order is subject to review by the full Commission on its own motion or upon appeal but the FTC staff. If the order is not appealed and not independently reviewed by the Commission within 30 days, it will become the final Commission order. Textron is not allowed to consolidate Avdel’s earnings until the Commission order becomes final and the injunction is lifted.
For those FIN readers with short memories here are some historical tidbits, taken from FIN’s dusty archives, about Textron and its problems getting Avdel officially (at least to FTC’s satisfaction) into its fastener family:
• Back in 1988, British-based Avdel plc, a producer of blind rivets, fasteners and fastening systems, mostly for the aerospace and automotive markets, was the subject of a take over effect by Banner Industries. At that time Avdel had annual sales of around $125 million and manufacturing operations in the UK, Europe and the U.S. (Anaheim, California; Rosedale, Michigan; and Parsippany, New Jersey).
• Banner amassed (according to FIN’s records) about 43% of Avdel’s stock, but Avdel –reluctant to be part of Banner – put out a call for a White Knight and that’s when Textron, like young Lockinvar galloped over the hill brandishing a trusty persuader (in the form of $250 million).
• Banner surrounded its claims to Avdel (making about $11 million on its shares) and went looking for another potential conquest (which turned out to be Fairchild Industries which it acquired in 1989).
• After Textron acquired Avdel, the FTC in 1989 stepped in, first with a temporary restraining order obtained in the U.S. District Court for the District of Columbia and later with other measures (including the appointment of a third party trustee to hold Avdel’s stock and the removal of Textron appointees from Avdel’s board).
• The FTC contention was that Textron (which is the parent company of the Cherry, Townsend and Camcar fastener groups) were substantial, direct competitors in 1) aerospace blind rivets and 2) non-aerospace structural blind rivets used in trucks, buses and other ground transportations vehicles.
• If Textron, after three years, is able to exercise control over Avdel, we’re guessing that Avdel will be made part of the Textron’s Townsend’s division, Charlotte, North Carolina. Townsend’s product line includes Intec and Autotec cold formed specials, threaded fasteners, NAVA sub assemblies, rivet products and rivet assembly machines. ©1991/2012 Fastener Industry News
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