Joe SillsWritten by

Bass Pro/Cabela’s Deal Delayed

Business Trends, Highlights| Views: 374

October’s blockbuster acquisition of Cabela’s by rival outdoor empire Bass Pro Shops has hit a snag, according to the Associated Press (AP). The AP reports that federal antitrust regulators have asked both companies for more time, likely a month, to review the $5.5 billion transaction.

An approval by regulators with the Federal Trade Commission (FTC) would clear the way for a nearly 40,000-employee company that would be the market share leader in outdoor retail.

Potential Hurdles

Antitrust review is standard in these situations. The fact that regulators are asking for a few more weeks to review this case doesn’t necessarily mean much. However, the FTC did block a merger between retail giants Staples and Office Space in May of this year. They also forced value store chains Family Dollar and the Dollar Tree to sell 330 stores before that merger was completed in July.

The FTC is expected to take a city-by-city look at markets where Bass Pro Shops and Cabela’s both operate, gauge the level of competition between other big box stores and local retailers and analyze the demographics of each customer base.

Bass Pro Shops and Cabela’s currently combine for 185 retail stores from coast-to-coast, though their strongholds largely reside in the east and west, respectively. The companies primarily overlap near the middle of those territories — in Texas, Missouri and Kansas.

Under the 1976 Hart-Scott-Rodino Act, the FTC has the power to block deals that the federal agency says “substantially lesson competition.” Typically, the FTC says, any deal over $78 million automatically falls under scrutiny.

If antitrust regulators determine that the merger between Springfield (Missouri — headquarters of Bass Pro Shops) and Sidney (Nebraska — headquarters of Cabela’s) will lesson competition in specific markets—most likely those where the two companies already overlap — they could force the sale of stores, or, in an unlikely scenario, block the merger entirely.

For now, regulators have requested an extra month to review the situation, and the fishing tackle world sits on hold.

Joe Sills Hi there, did you know? Each week, we curate a list of the Top 5 stories in fishing and send them right to your inbox. Reading Tackle’s Top 5 is one of the best ways to become or remain an industry expert. -Joe Sills, Digital Editor