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Volvo Acquires OMC Stern Drive |
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Volvo Acquires OMC Stern Drive |
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In late December 1998, Volvo acquired OMC's interest in their Lexington TN stern drive joint venture. Then in early January 1999, Volvo sued Brunswick for monopolizing the stern drive business.
Concurrently, OMC and Volvo Penta signed a long-term agreement for the supply of stern drives to OMC-owned boat companies, and in which each party agrees to supply service parts to the other.
Outboard Marine Corporation is a leading manufacturer and marketer of internationally-known boat brands, including Chris-Craft®, Four Winns®, Seaswirl®, Javelin®, Stratos®, Lowe®, Hydra-Sports®, and Princecraft®; marine accessories and marine engines, under the brand names of Johnson® and Evinrude®; and FICHT® fuel injection - the industry's premier low-emission, two-stroke engine technology.
Volvo Penta of the Americas, Inc., is a wholly owned subsidiary of AB Volvo Penta, a leading supplier of marine propulsion systems for pleasure and commercial applications, as well as heavy-duty diesel engines for industrial applications. Volvo and Volvo Penta are registered trademarks of AB Volvo, which has its core business in cars, trucks, bus, construction, marine and aerospace activities.
The complaint invokes the allegations contained in a suit brought in
Little Rock, Ark., where, as previously reported, a jury awarded a group of 22
boat builders treble damages totaling $133 million in June 1998. The company
is in the process of appealing this verdict. While there can be no
assurances, the company believes the jury verdict will ultimately be reversed.
The latest suit was filed in federal court in Virginia by Volvo Penta of
the Americas Inc. Volvo, based in Chesapeake, Va., manufactures stern drives
for boats. The suit calls for unspecified damages, Brunswick said.
Brunswick said the suit is without merit, but noted that it includes
essentially the same charges as a suit the company lost last year in federal
court in Little Rock, Ark.
In that case, brought by Independent Boat Builders Inc., a jury decided
Brunswick was guilty of restraint of trade and levied a fine of $44.4 million.
Because fines in antitrust cases are tripled, the levy against Brunswick
totaled $133 million.
Brunswick is appealing the verdict.
That verdict prompted another antitrust case, filed in October in federal
court in Minnesota by two boat builders.
The issue in all three cases is Brunswick's dominance in the marine-engine
industry through its Mercury Marine subsidiary, based in Fond du Lac, Wis.
Brunswick also is a major manufacturer of powerboats through its
acquisition of popular brands including Sea Ray, Maxum, Baja, Trophy and
Boston Whaler.
Boat builders have argued that Brunswick's acquisitions have unfairly
lessened competition.
They also have argued that Brunswick gives its own boat-building units
better deals on engines than outside manufacturers. Builders also say
Brunswick requires them to commit to buy unrealistically high numbers of
engines to get the best prices.
SALE OF OMC'S JOINT VENTURE INTEREST
TO VOLVO PENTA OF THE AMERICASPR Newswire
5 Jan 1999
LAKE FOREST, Ill., Brunswick announced today that it has been served with a lawsuit
filed recently in Federal District Court in Virginia claiming Brunswick violated
various provisions of the antitrust laws in connection with its sales of
MerCruiser sterndrive and inboard engines. The suit was filed by Volvo Penta
of the Americas, Inc., seeking damages in an unspecified amount and injunctive
relief. Brunswick said it believes the suit is without merit and will
aggressively defend itself against it.
BRUNSWICK HIT WITH 3RD ANTITRUST SUIT
Chicago Tribune
6 Jan 199
by Sallie L. Gaines
Brunswick Corp., already enmeshed in two antitrust lawsuits, said Tuesday
it has been hit with a third one, accusing the Lake Forest-based company of
unfairly monopolizing the marine engine market.
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