Following Standard Parking Corporation’s proposed acquisition of Central Parking Corporation, the Department of Justice is requiring the company to divest its interests within 29 cities and 21 states. On September 26, 2012, the Department announced that without the requirement for divestitures, the merger would have created a dominant presence in 29 different cities and hiked parking prices.
The Antitrust Division under the Department of Justice has also filed a lawsuit with the U.S. District Court in the District of Columbia to stop the acquisition.
The Department notes that Standard and Central are biggest parking management companies in the country. Because these companies fiercely compete by offering special incentives and better hours of operation in parking garages and lots, consumers have received lower parking prices and better services.
If the acquisition is approved, the Department is requiring Standard and Central to divest a percentage of their presence I the following central business districts: Atlanta, Baltimore, Bellevue, Boston, Charlotte, Chicago, Cleveland, Columbus, Dallas, Denver, Fort Myers, Fort Worth, Hoboken, Houston, Kansas city, Los Angeles, Miami, Milwaukee, Minneapolis, Nashville, New Orleans, New York City, Newark, Philadelphia, Richmond, Sacramento, and Tampa.
If the acquisition is approved, Standard and Central will have to divest at least 107 parking facilities in the central business districts listed above.
Standard is based out of Chicago and operates in 41 states. They own roughly 2,200 parking facilities and about 1.2 million parking spaces. Their total revenue was estimated at $729 million in 2011. Central is based out of Nashville and operates in 38 states. They own about 1 million parking spaces, and their total revenue was estimated at $800 million in 2011.
The acquisition is valued at $345 million, and the requirements for divestitures will save consumers about $85 million. Acting Assistant Attorney General Joseph Wayland commented, “These divestitures will ensure that consumers in the affected cities and states will receive better services.”
Source: Department of Justice