U.S. Plans to Sue to Block Gillette’s Bid for Wilkinson

The Justice Department announced Tuesday that it will file an antitrust suit aimed at blocking Gillette Co.’s plan to acquire most of Wilkinson Sword’s worldwide razor blade business.

The Justice Department said plans by Gillette, the nation’s largest manufacturer of razor blades for shaving, to acquire the non-European operations of Wilkinson Sword “may substantially lessen competition” in violation of the Clayton Act and would pose a “significant risk” of higher prices to U.S. consumers.

“The acquisition poses a significant threat to competition in the wet-shaving razor blade market in the United States,” Alison L. Smith, acting head of the Justice Department’s antitrust division said.

“Gillette is the dominant supplier of razor blades in the United States,” she said.

The announcement said the department planned to file its case in U.S. District Court in Washington.

“This acquisition would eliminate one of the only four other suppliers of blades and would further increase Gillette’s dominant share,” Smith said.

“The antitrust laws do not tolerate such a loss of competition.”

Gillette sold about 65% of the nation’s blades in 1988; Wilkinson sold about 3%.

Wilkinson Sword, until recently owned by a Swedish company, was sold to a Dutch corporation in a leveraged buyout partially financed by Gillette, which is based in Boston.

The Dutch firm in turn has agreed to sell Wilkinson Sword’s business outside the European Common Market to Gillette, the department said.

In Boston, Gillette Senior Vice President and General Counsel Joseph E. Mullaney said the company was “very surprised and disappointed that they are bringing what we consider a precipitous action.”

He disputed the department’s contention that the acquisition of Wilkinson would hurt competition because other razor makers like Shick and Bic would remain in the field.

“We’re going to tell the court we think this is unnecessary,” Mullaney said.

The Justice Department’s announcement came just hours after it filed suit in Philadelphia to block the merger of two industrial razor blade firms.

The Justice Department charged in the civil antitrust suit that American Safety Razor Co.’s acquisition of Ardell Industries Inc. might lessen competition in industrial blades.

American Safety Razor, of Verona, Va., and Ardell, based in Union, N.J., were the nation’s largest and second-largest sellers of industrial single-edge blades for cutting, trimming and scraping.

ASR purchased the outstanding shares of Ardell last April for $12.7 million.