FTC Expands Scrutiny of PacifiCare Deal

CYPRESS — Antitrust regulators appear to be scrutinizing PacifiCare Health Systems Inc.’s plan to buy rival FHP International Corp. more closely than most proposed business combinations.

The health maintenance companies said they have received additional requests for information from the Federal Trade Commission, which enforces federal antitrust laws. An FTC official, while refusing to acknowledge any special inquiry, said the agency rarely makes such requests for information beyond the original filings.

In the fiscal year ended Aug. 31, the agency made second requests for information in only 31 of the 2,844 proposed mergers it reviewed, said George S. Cary, deputy director in the agency’s bureau of competition.

What’s more, Cary said that the agency “found a problem that needed to be remedied” in two-thirds of those cases in which additional material was sought. Those cases resulted in 18 negotiated settlements with merger partners, involving measures such as the sales of certain businesses, and three court challenges.

However, spokesmen for FHP and Cypress-based PacifiCare said the agency’s queries aren’t likely to delay the proposed merger, which the companies expect to complete by early January. The merged company, which would have revenue of more than $8.6 billion, would become the nation’s fifth-largest health maintenance organization. It would have nearly 4 million members in 15 states and Guam, with 1.4 million members in Southern California alone.