Swedlow Set Back in Its Merger Plans

Swedlow Inc. of Garden Grove and its prospective merger partner, PPG Industries, were dealt a significant setback Friday by a federal appeals court judge who ruled that the two companies may not merge until a Federal Trade Commission lawsuit is completed.

The two companies agreed to merge one year ago but have been stymied by the FTC, which has argued that the merger would substantially lessen competition in the making of aircraft windshields.

The stock market reacted to the ruling by sending Swedlow shares into a tailspin. In over-the-counter trading, Swedlow common stock dropped $6 a share to $19 bid. Under terms of the merger, PPG would pay $32.60 a share cash for all Swedlow shares, or about $42.3 million.

Despite the FTC’s opposition to the merger, the two companies had sought to complete the transaction but keep their operations separate until the FTC’s lawsuit was completed. The judge’s ruling Friday killed that plan.

A Swedlow spokesman said the companies are “studying the court’s decision to determine their course of action.”

Among the options being considered are waiting out the FTC action or calling off the merger and appealing Friday’s decision to the U.S. Supreme Court.