FTC drops Intel injunction
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January 13, 1998: 10:56 a.m. ET
Regulatory agency says it will still keep an eye on company's business practices
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NEW YORK (CNNfn) - The U.S. Federal Trade Commission said Tuesday it would no longer try to hold up Intel Corp.'s $420 million acquisition of Chips and Technologies Inc.
The FTC did say, however, that it would continue to investigate the merger as part of its more extensive look into Intel's operations. Earlier, the FTC had sought a preliminary injunction to halt the merger.
The FTC was apparently concerned that Intel would gain an even larger market share of the chip market with the acquisition of Chips and Technologies, a leading laptop computer semiconductor firm.
The FTC has been eyeing Intel carefully because it believes that Intel's strong chip business, estimated to control more than 80 percent of the world's market, could raise antitrust concerns.
"Because we have concerns about the impact of this transaction on competition in markets for certain computer components, we have chosen to continue the investigation into the lawfulness of the acquisition," the FTC said in a statement.
The FTC's investigation into the Chips and Technologies merger lasted about six months. If the FTC were to find improprieties from Intel at a later date, it could force Intel to sell the acquired company.
Intel's $700 million settlement of a patent infringement suit with Digital Equipment has also received FTC scrutiny recently. Under that settlement, Intel (INTC) will get some of DEC's semiconductor manufacturing facilities.
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