How a Funeral Giant Overcame Antitrust Concerns and Gobbled Up Its Rival
Article from: Bloomberg BusinessWeek
Funerals are going corporate, and now the biggest chain of mortuaries and cemeteries has received a green light to get much bigger. The Federal Trade Commission will allow Service Corporation International to acquire its largest rival, Stewart Enterprises, on the condition that the behemoth of “death care”—that’s what the industry calls itself—sheds properties in scores of communities across the country.
Advocates for funeral customers had passionately opposed the SCI-Stewart combination, announced last May, complaining that when SCI comes to town, prices tend to rise and service deteriorates. SCI, it will not surprise you to know, contends that it provides better death-care service for the bereaved’s dollar. In response, the FTC investigated and found that the proposed $1.4 billion deal would indeed probably lessen competition in 59 communities throughout the U.S. Not to worry, though, the regulatory agency added: The FTC and SCI came up with a plan requiring the Houston-based pioneer of chain funeral establishments to sell 53 funeral homes and 38 cemeteries. With that trimming, the FTC said on Dec. 23 that the deal could move ahead, giving SCI a 15 percent share of the national funeral market.
Here are some additional facts and figures, courtesy of the FTC:
SCI owns and operates more than 1,449 funeral-services locations and 374 cemeteries, including 213 combined funeral-services/cemetery locations, as well as 100 crematories. Its total revenue in 2012 was approximately $2.41 billion. Stewart is the second-largest funeral and cemetery services provider in the nation, with 217 funeral homes and 141 cemeteries in 24 states and Puerto Rico. For the year ending on October 31, 2013, Stewart’s total revenues were approximately $524.1 million.
For more background and color on SCI, including controversies that have led to its being sued for various alleged shortcomings in how it runs its facilities, you can read this Bloomberg Businessweek cover article on the company.