Flow-Omax merger gets FTC permission

Flow International Corp., a maker of waterjet machines for cutting and cleaning, said that the Federal Trade Commission will permit the merger of Flow and Omax Corp., both based in Kent, Wash.

The FTC accepted a consent decree with Flow for the company to merge with privately held Omax. Because the companies are competitors, Flow had anticipated an antitrust inquiry, Flow chief executive officer Charley Brown said in December, when the intent to merge was announced. Brown said the transaction is expected to close during the company's second fiscal quarter, or by Oct. 31.

The consent decree provides that Flow will make available to other abrasive waterjet companies royalty-free, five-year licenses to Omax's U.S. patents for controllers used in waterjet cutting systems.

The Federal Trade Commission had issued a complaint charging that Flow International Corporation's proposed $109 million acquisition of rival waterjet manufacturer OMAX Corporation would be anticompetitive and in violation of federal antitrust laws. Under the terms of a consent order resolving the Commission's complaint and allowing the transaction to proceed, Flow will be required to grant to any firm a royalty-free license to two OMAX patents relating to the controllers used in waterjet cutting systems.

"Flow and OMAX are each other's closest competitor in the highly concentrated U.S. market for waterjet cutting systems," Jeffrey Schmidt, director of the FTC's Bureau of Competition said. "The consent agreement announced today will remedy the Commission's competitive concerns, and will benefit consumers by ensuring that Flow will continue to face direct competition in this market going forward."