THIRTEENTH ANNUAL REPORT (1990)

.

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THIRTEENTH ANNUAL REPORT

TO CONGRESS

PURSUANT TO SECTION 201

OF THE

HART-SCOTT-RODINO ANTITRUST

IMPROVEMENTS ACT OF 1976

(Fiscal Year 1990)

INTRODUCTION

Section 201 of the Hart-Scott-Rodino Antitrust Improvements

Act of 1576, Pub. L. 94-435, amended the Clayton Act by adding a

new Section 7A, 15 U.S.C. Section 18a ("the Act"). Subsection

(3) of Section 7A provides as follows:

Beginning not later than January 1, 1978,

the Federal Trade Commission, with the

concurrence of the Assistant Attorney

General, shall annually report to the

Congress on the operation of this

section. Such report shall include an

assessment of the effects of this

section, of the effects, purpose, and the

need for any rules promulgated pursuant

thereto, and any recommendations for

revisions of this section.

This is the thirteenth annual report to Congress pursuant to

this provision. It covers fiscal year 1990.

In general, Section 7A requires that certain proposed

acquisitions of stock or assets must be reported to the Federal

Trade Commission and the Department of Justice prior to

consummation. The parties must then wait a specified period,

usually thirty days (fifteen days in the case of a cash tender

offer), before they may complete the transaction. Whether a

particular acquisition is subject to these requirements depends

upon the value of the acquisition and the size of the parties, as

measured by their sales and assets. Small acquisiticns,

acquisitions involving small parties and other classes of

acquisitions that are less likely to raise antitrust concerns,

are excluded from the Act's coverage. -

The primary purpose of the statutory scheme, as the

legislative history makes clear, is to provide the antitrust

enforcement agencies with the opportunity to review mergers and

acquisitions before they occur. The premerger notification

program, with its filing and waiting period requirements,

provides the agencies with both the time and the information to

conduct this antitrust review. Much of the information needed

for a preliminary antitrust evaluation is included in the

notification filed with the agencies and thus is immediately

available for review during the waiting period.

If either agency determines during the waiting period that

further inquiry is necessary, it is authorized by Section 7A(e)

to request additional information or documentary materials from

either or both of the parties to a reported transaction. Such a

request extends the waiting period for a specified period,

usually twenty days (ten days in the case of a cash tender

offer), after the parties have complied with the request (or in

the case of a tender offer, after the acquiring person complies).

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This additional time provides the agencies with the opportunity

to review the information and to take appropriate action before

the transaction is consummated. If either agency believes that

proposed transaction may violate the antitrust laws, the agency

may seek an injunction in federal district court to prohibit

consummation of the transaction.

fi

Final rules implementing the premerger notification program

were promulgated by the Commission, with the concurrence of the

Assistant Attorney General, on July 31, 1978. At that time, a

comprehensive Statement of Basis and Purpose was also published

containing a section-by-section analysis of the rules and an

item-by-item analysis of the Premerger Notification and Report

Form. The program became effective on September 5, 1978. In |

1983, the Commission, with the concurrence of the Assistant

Attorney General, made several changes in the premerger

notification rules. Those amendments became effective on

August 29, 1983.” Additional amendments were published in the

Federal Register on March 6, 1987, > and May 29, 1987.

The appendices to this report provide a statistical summary

of the cperation of the premerger notification program. Appendix

A shows for each fiscal year in which the program has been in

operation the number of transactions reported,’ the number of

} 43 Fed. Reg. 33,450 (1978). The rules also appear in

16 C.F.R. Parts 801 through 803. For more information concerning

the development of the rules and operating procedures of the

premerger notification program, see the second, third and seventh

annual reports covering the years 1978, 1979 and 1983,

respectively. “

2 48 Fed. Reg. 34,427 (1983) (codified at.16 C.F.R. Parts

801 through 803).

> 52 Fed. Reg. 7,066 (1987) (codified at 16 C.F.R. Parts

801 through 803).

‘4 52 Fed. Reg. 20,058 (1987) (codified at 16 C.F.R. Parts

801 through 803).

5 The term "transactions", as used in Appendices A, B,

and C, and Exhibit A to this report, does not refer to separate

mergers or deals; rather, it refers to types of structures such

as cash tender offers, options to acquire voting securities from

the issuer, options to acquire voting securities from someone

other than the issuer, and multiple acquiring or acquired persons

(continued...)

filings received, the number of merger investigations in which

requests for additional information or documentary material

(hereinafter referred to as "second requests") were issued, and

the number of transactions in which requests for early

termination of the waiting period were received, granted, and not

granted. Appendix A also shows for calendar years 1981 through

1984 and fiscal years 1985 through 1990 the number of

transactions in which second requests could have been issued.

(This information appears in Appendix C and is explained in

footnote 1 of that appendix.) Appendix B provides a month-bymonth comparison of the number of filings received (Table 1) and

the number of transactions reported (Table 2) for fiscal years

1979 through 1990. Appendix C shows, for calendar years 1981

through 1984 and fiscal years 1985 through 1990, the number of ©

transactions in which the agencies could have issued second

requests, the number of merger investigations in which second

requests were issued, and the percentage of transactions in which

second requests were issued. As we explained in the Eighth

Annual Report, we believe that Appendix C provides a more

meaningful measure of the second request rate than Appendix A

because Appendix C eliminates from the total number of

transactions certain transactions in which the -.agencies could

not, or aS a practical matter would not, issue second requests.

The statistics set out in these appendices show that the

number of transactions reported in 1990 decreased approximately

21.5 percent from the number of transactions reported in 1989

(2,262 transactions were reported in 1990 while 2,883 were

reported in 1989). The statistics in Appendix A also show that

°(...continued)

that necessitate separate HSR identification numbers to track the

filing parties and waiting periods. A particular merger or deal

may involve more than one transaction. Indeed, some have

involved as many as four or five transactions.

6 See Appendix C, note 1. As we explained in the

Eleventh and Twelfth Annual Reports, the information regarding

second requests in Appendicés A and C differs from that reported

in those appendices in the annual reports for fiscal years 1979-

1987. Appendix A and C in prior reports identified the number of

transactions in which a second request was issued, while

Appendices A and C in the present report show the number of

merger investigations in which second requests were issued. A

merger investigation may include several transactions. We

believe that reporting the number of merger investigations in

which second requests were issued better reflects the agencies'

enforcement activities because it represents the number of

mergers or acquisitions that were investigated to this extent

under the Act by the agencies.

the number of merger investigations in which second requests were

issued in 1990 increased approximately 39 percent over the number

of merger investigations in which second requests were issued in

1989 (second requests were issued in 89 merger investigations in

1990 while second requests were issued in 64 merger

investigations in 1989). These numbers indicate an increase in

the number of second requests issued as a percentage of reported

transactions from 1989 to 1990 (from 2.2 percent in 1989 to 3.9

percent in 1990 based on Appendix A, and from 2.5 percent in 1989

to 4.6 percent in 1990, based on Appendix C).

The statistics also show that in recent years, early

termination was requested for most transactions. In 1990, early

termination was requested in 87.3 percent (1,975) of the

transactions reported, while in 1989 it was requested in 89.6

percent (2,582) of the transactions reported. The number of

requests granted decreased in 1990 compared to 1989 (from 1,937

in 1989 to 1,299 in 1990). Also, the percentage of requests

granted decreased (from 75 percent in 1989 to 65.8 percent in

1990).

We have also included in the report, as Exhibit A,

statistical tables (Tables I - XI) containing information about

the agencies' enforcement interest in transactions reported in

fiscal year 1990. The tables provide, for various statistical

break downs, the number and percentage of transactions in which

clearances to investigate were granted by one antitrust agency to

the other and the number of merger investigations in which second

requests were issued; the number of transactions based on the

dollar value of transactions reported and the reporting threshold

indicated in the notification; the number of transactions based

on the sales or assets of the acquiring person or the sales or

assets of the acquired entity; and the number of transactions

based on the industry group (2-digit SIC code) in which the

acquiring person or the acquired entity derived most of their

revenues. These statistics have been included in prior annual

reports for the calendar years 1981-1984, and for. fiscal years

1985-1989 (excluding 1986).

7 See the Twelfth Annual Report, Exhibit A, for fiscal

year 1989, the Eleventh Annual Report, Exhibits A and B, for

fiscal years 1987 and 1988, the Tenth Annual Report, Exhibit A,

for fiscal year 1985, the Ninth Annual Report, Exhibit A, for

calendar year 1984 transactions, the Eighth Annual Report,

Exhibit A, for calendar year 1983 transactions, the Seventh

Annual Report, Exhibit B for calendar year 1982 transactions, and

the Sixth Annual Report, Exhibit A for calendar year 1981

transactions. Due to resource constraints, statistics for fiscal

1986 have not been prepared.

oe

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DEVELOPMENTS IN FI YEAR 1 RELATING TO PREMERGER

NOTIFICATION RULES AND PROCEDURE

1. Amendment to Rules

On August 2, 1990, the Commission published in the Federal

Register a Notice of Final Rulemaking to amend the Antitrust

Improvements Act Notification and Report Form for Certain Mergers

and Acquisitions (the "Form").° The rule amended the Form to

require parties filing premerger notification to provide 1987

revenue data and to use 1987 Bureau of Census Standard Industrial

Classification ("SIC") Codes, instead of the 1982 revenue data

and the codes previously used in response to certain items.

The Form requires data for two time periods: the most

recent year for which the requested information is available, and

the “base year" that coincides with the Bureau of the Census'

most recently available quinquennial economic census and the

nua ey _o nufactures. The amendment changed the "base

year" for which revenue information is required from 1982 to

1987. The amendment enables the agencies to use effectively the

recent Bureau of the Census' publications which provide the most

readily available and reliable statistical information on

industry components and market universes. The agencies compare

this statistical data to the reporting persons' revenue data to

determine whether a proposed transaction may raise serious

antitrust concerns.

2. Filing Fee

On. November 8, 1989, Congress, as part of the Commerce,

Justice, and State Appropriations Bill, mandated that beginning

November 29, 1989, a fee of $20,000 be paid by persons acquiring

voting securities or assets who are required to file premerger

notifications under the Act and the rules promulgated thereunder.

The bill provided that the waiting period required under the Act

would not begin until payment of the filing fee was received.

The Commission issued a statement advising the public about the

filing fee obligation and setting forth procedures for payment of

8 55 Fed. Reg. 31,371 (1990).

the filing fee.’ The bill was signed into law on November 21,

1989.

3. ompliance

The Commission and the Department of Justice continue to

monitor compliance with the premerger notification program's

filing requirements, and initiated a number of investigations to

assure compliance in fiscal year 1990. The Department of Justice

tiled one complaint in fiscal year 1990 which alleged that a

corporation had violated the Hart-Scott-Rodino Act and sought

civil penalties under Section 7A(g)(1) of the Act."

In United States v. Baker Hughes Incorporated, Eimco Secoma

S.A. and Oy Tampella AB, ~ the Antitrust Division alleged in

Count Two of the complaint that Oy Tampella had violated the

premerger notification requirements by acquiring assets after

failing to submit an important strategic document as part of its

premerger notification, as required by the rules implementing the

Act. Under the terms of a consent decree, Oy Tampella agreed to

pay a civil penalty of $275,000 to settle that count.

In addition to investigations, the agencies continue to

monitor compliance through a variety of methods, including the.

review of newspapers and industry publications for announcements

of transactions that may not have been reported in accordance

with the requirements of the Act. Industry sources, such as

competitors, customers and suppliers, and interested members of

the public often provide the agencies with further information |

about transactions and possible violations of the filing

requirements.

ae

9 54 Fed. Reg. 48,726 (1989). See Exhibit B for the

Commission statement on Hart-Scott-Rodino filing fees.

Departments of Commerce, Justice, and State, the

Judiciary, and Related Agencies Appropriations Act, 1990, Pub. L.

No. 101-162, §605, 103 Stat. 1031 (1989). ¢

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Under Section 7A(g)({1) of the Act, any person or

company that fails to comply with the Act's notification and

waiting period requirements is liable for a civil penalty of up

to $10,000 for each day the violation continues.

aos United States v. Baker Hughes Incorporated, Eimco

Secoma S.A. and Oy Tampella AB, 1990-1 Trade Cas. q 68,976

(D.D.C. March 22, 1990).

fan ATES halen

1

MERGER ENFORCEMENT ACTIVITY DURING FISCAL YEAR 19993

1. Department of Justice

The Antitrust Division filed eleven complaints in merger

cases during fiscal year 1990.“ Five of these cases, United

States v. American Safety Razor Company, United States v. The

Gillette Company, United States v. Baker Hughes Incorporated,

dughes Tool Company, Norton Company and Eastman Christensen

Company, United States v. North American Salt Company, and United

States v. Brown & Root, Inc., were settled by the entry of

consent decrees.

8 The cases mentioned in this report were not necessarily

reportable under the premerger notification program. Because of

the Hart-Scott-Rodino Act's provisions regarding the

confidentiality of the information obtained pursuant to this

program, it would be inappropriate to identify which cases were

initiated under the premerger notification program.

“4 United States v. Baker Hughes Incorporated, #imco

Secoma S.A. and Oy Tampella AB, Cv. No. 89-3333 (D.D.C. filed

December 13, 1989); United States v. American Safety Razor

Company and Ardell Industries, Inc., Cv. No. 90-0188 (E.D. Pa.,

filed January 9, 1990, and amended on August 15, 1990); United

States v. The Gillette Company, Wilkinson Sword, Inc., Stora

Kopparbergs Bergslags AB and Eemland Management Services BV, Cv.

No. 90-0053 (D.D.C. filed January 10, 1990); United States v.

Country Lake Focds, Inc., Superior-Dairy Fresh Milk Co., Penny C.

Van Beek, individually and as co-personal representative of the

Estate of Philip E. Peteler, Deceased; First Bank National

Association, co-personal representative of the Estate of Philip

E. Peteler, Deceased; Georgene H. Peteler, Lynn Rudersdorf,

Thomas D. Campbell, Sr. and Diane Campbell, Cv. No. 3-90-CIV-101

(D. Minn. filed February 22, 1990); United States. v. United Tote,

Inc., Cv. No. CIV-CA-90~-130, (D. Del. filed March 14, 1990);

United States v. Baker Hughes Incorporated, Hughes Tool Company,

Norton Company and Eastman Christensen Company, Cv. No. 90-0825

(D.D.C. filed April 10, 1990); United States v. North American

Salt Company, Cv. No. 90-C-2631 (N.D. Ill. filed-May 8, 1990);

United States v. The Rank Organisation Plc, Rank America Inc. and

Fox, Inc., Cv. No. CIV-~90-33795 TJH (TX) (C.D. Cal. filed July

19, 1990); United States v. Pacific Amphitheatre Partnership,

Irvine Meadows Amphitheater Partnership and Ogden Allied Services

Corporation, Cv. No. CIV 90-3797KN (SX) (C.D. Cal. filed July 19,

1990); United States v. The Procter & Gamble Company and Rhone-

Poulence Rorer, Inc., Cv. No. 90-5144 (E.D. Pa. filed August 7,

1990); United States v. Brown & Root, Inc., Halliburton Company

and Offshore Pipelines, Inc., Cv. No. 90-1986 (D.D.C. filed

August 17, 1990).

Preliminary injunctions were sought in six cases, United

States v. Baker Hughes Incorporated, Eimco Secoma $.A. and Oy

Tampella AB, United States v. The Gillette Company, United States

v. Country Lake Foods, Inc., United States v. United Tote. Inc.

(requesting a Hold Separate Order), United States v. Pacific

Amphitheatre Partnership, and United States v. The Rank

Organisation Plc. Preliminary injunctions were denied in three

cases.

In United States v. Baker Hughes Incorporated, Eimco Secoma

S.A. and Oy Tampella AB, the Division challenged Oy Tampella's

proposed acquisition of the Eimco Secoma subsidiary of Baker

Hughes. Oy Tampella, through its Tamrock Division of Tampere,

Finland, and Secoma, of Meyzieu, France, were the two largest —

sellers in the United States of underground hardrock hydraulic

drilling rigs, which are used to extract metals and minerals. In

1988, total sales in the United States of hardrock hydraulic

drilling rigs were about $10 million. Count One of the complaint

alleged that the transaction would lessen competition in the

production and sale of underground hardrock hydraulic drilling

rigs. On February 12, 1990, after a consolidated trial on the

merits and hearing on the motion for preliminary injunction, the

district court denied the preliminary injunction, dismissing

Count One of the complaint, holding that foreign manufacturers of

these machines would be likely to enter the United States market

if the merger led to the exercise of market power. The Court of

Appeals affirmed the district court's decision.» As previously

discussed in the Developments section of this report, the

Division also alleged in Count Two of the complaint that Oy

Tampella had violated the premerger notification requirements of

the Hart-Scott~-Rodino Act and sought civil penalties under

Section 7A(q)(1) of the Act.

In United States v. American Safety Razor Company, the

Division challenged the acquisition of Ardell Industries, Inc.,

of Union, New Jersey, by American Safety Razor Company ("ASR") of

Verona, Virginia. The complaint alleged that the transaction

would lessen competition in the production and sale of industrial

blades. ASR had acquired all of the outstanding shares of Ardell

in April, 1989 for $12,796,000. Prior to the acquisition, ASR

and Ardell, respectively, were the first and second largest

United States sellers of single-edge industrial blades and the

first and fourth largest United States sellers of all other types

of industrial blades. Industrial blades are disposable, razorsharp blades manufactured for cutting, trimming, chopping and

scraping applications. In 1988, sales of all types of industrial

blades were about $90 million. The consent decree required

Ardell and ASR to divest four backer and sheller machines and

1s United States v. Baker Hughes Incorporated, 731 F.

Supp. 3 (D.D.C. 1990), aff'd, 908 F. 2d 981 (D.C. Cir. 1990).

8

related technology. Backers and shellers are necessary for the

production of single edge industrial blades, but are not readily

available and are difficult to design. The acquisition of

backing and shelling equipment is the principal barrier to entry

into the preduction of single edge blades. The decree also

required ASR to terminate an April 28, 1989 agreement giving ASR

a right of first refusal to acquire Techni-Edge Manufacturing

Corporation, a competitor. In addition, the decree required ASR

to release an expert in the design of industrial blade-making

equipment from a consulting agreement that precluded his

providing services to competitors or potential competitors for

the production of industrial biades.

In United States v. The Gillette Company, the Division

challenged the acquisition of the non-European Economic Community

("EEC") wet shaving razor blade business of Wilkinson Sword of

Atlanta, Georgia, by The Gillette Company of Boston,

Massachusetts. The complaint alleged that the transaction would

lessen competition in the sale of wet shaving razor blades in the

United States. Wilkinson Sword was formerly owned by a Swedish

corporation, Stora Kopparbergs Bergslags AB. In a leveraged

buyout partially financed by Gillette, Stora sold Wilkinson

Sword's worldwide operations to Eemland Management Services BV, a

Netherlands corporation, which in turn agreed to sell Wilkinson's

non-EEC business to Gillette. Gillette was the leading seller of

wet shaving razor blades in the United States accounting for 50

percent of all units sold with about $450 million of retail sales

in 1988. Wilkinson Sword was the fourth or fifth largest seller

of wet shaving razor blades in the United States, accounting for

about 3 percent of all units sold with about $7 million of retail

sales in 1988. Gillette and Wilkinson Sword were two of only

five suppliers of wet shaving razor blades in the United States.

On January 16, 1999, the Division's motion for a temporary

restraining order was denied. The court noted that defendants

had stated that Wilkinson's United States wet shaving razor blade

assets would not be transferred to Gillette without providing the

government ten days advance notice, and found that there was no

need for immediate relief. The court permitted the government to

renew its motion at any time. The court also observed that

significant antitrust issueB were presented by the transaction

which might require remedial relief. The case was resolved by

consent decree. Under the consent decree, Gillette may not

acquire Wilkinson's wet-shaving razor blade business in the

United States, Wilkinson's razor blade production facilities in

the EEC that are used to supply its United States business, and

the trademarks under which those razor blades are sold in the

United States and the EEC without the consent of the United

States.

In United States v. Country Lake Foods, Inc., the Division

challenged the acquisition of all of the stock of Superior-Dairy

Fresh Milk Co. by Country Lake Foods Inc., two of the three

9

f

largest processors of milk sold in the Minneapolis-St. Paul

metropolitan area. Country Lake's sales of fluid milk in 1989 in

the Minneapolis-St. Paul area were approximately $29.3 million.

Superior's sales of fluid milk in 1989 in this area were

approximately $28.6 million. The complaint alleged that the

acquisition would lessen competition in the sale of fluid milk

products, which include homogenized whole milk, two-percent milk,

one-percent milk, skim milk, chocolate milk, buttermilk and halfand-half. Dairies such as Country Lake and Superior processed,

packaged and sold these products to grocery and other food stores

and to institutional customers such as schools. Country Lake,

which is 70% owned by Land O'Lakes, Inc., controlled about 18.2

percent of fluid milk sales in the Minneapolis-St. Paul area.

Superior controlled about 17.8 percent of fluid milk sales in the

area. The complaint alleged that the acquisiticn would

significantly increase the level of concentration in the sale of

fluid milk products in the Twin Cities area and increase the risk

that miik consumers there would face higher prices in the near

future. A temporary restraining order was issued and, on June 1,

1990, after an evidentiary hearing, the district court denied the

government's motion for a preliminary injunction. The court held

that the relevant geographic market was broader: than the Twin

Cities area, and included distant dairies that would begin to

ship milk into the Twin Cities if prices there were to rise.

Subsequent to this decision, the government dismissed the

complaint with prejudice.

In United States v. United Tote, Inc., the Division

challenged the acquisition of Autotote Systems Inc. of Newark,

Delaware, by United Tote, Inc., of Shepherd, Montana. United

Tote acquired all of the outstanding shares of Autotote on

December 11, 1989, for $85 million. The complaint alleged that

the acquisition lessened competition in the totalisator systems

and services market. A totalisator is a computer system that

calculates and displays odds and payout amounts at racetracks.

The system consists of unique electronic ticket issuing terminals

and a central computer complex controlled by proprietary

software. Prior to the acquisition, Autotote and United Tote

were two of only three significant suppliers of totalisator

systems to horse and greyhotnd racetracks and jai alai frontons

in the United States, together accounting for approximately 49

percent of sales in the market. In 1989, total sales in the

North American totalisator market were approximately $92 million.

On May 10, 1991, the court ruled in favor of the government and

ordered United Tote to divest Autotote. The court entered a

final judgment setting forth the terms of divestiture on August

28, 1991. A hold separate order remains in effect until the

divestiture is completed.

In United States v. Baker Hughes Incorporated, Hughes Tool

Company, Norton Company and Eastman Christensen Company, the

Division challenged the $550 million acquisition by Baker Hughes

10

of Houston, Texas, of Eastman Christensen Company of Salt Lake

City, Utah. The complaint alleged that the proposed acquisition

would lessen competition in the United States market for each of

three types of diamond drill bits: natural diamond bits;

synthetic diamond bits called polycrystalline diamond compact

("PCC") bits; and thermally stable synthetic polycrystalline

diamond ("TSP") bits. Diamond drill bits are used for drilling

oil and gas wells. Baker Hughes and Eastman Christensen were

major manufacturers of these three types of diamond drill bits.

In 1989, total sales of the three types of diamond drill bits in

the United States were over $30 million, with Baker Hughes

accounting for about 15 percent of total domestic sales, while

Eastman Christensen accounted for 25 percent. Baker Hughes and

Eastman Christensen also were large, diversified suppliers of a

wide variety of oil field products and services. Baker Hughes

had 1989 sales of $2.3 billion; Eastman Christensen had 1989

sales of $211 million. Under the consent decree, Baker Hughes

was required to divest its entire diamond drill bit business, and

divestiture occurred on June 21, 1990.

In ited States v. Nor erican mpany, the

Division challenged the 1988 acquisition of Carey Salt, Inc., by

one of North American Salt Company's ("“NAMSCO") predecessors,

Carey Salt Holdings, Inc., of Mission, Kansas.. NAMSCO produces

and distributes salt products, including rock salt. It reported

net sales of about $51 million in 1988. The complaint alleged

that the acquisition lessened competition in the production and

sale of rock salt used in highway de-icing and agricultural

applications in two central U.S. markets. The acquisition

combined, under NAMSCO's ownership, Carey's rock salt mine in

Hutchinson, Kansas, and the rock salt mine of another NAMSCO

subsidiary, American Salt Company, in Lyons, Kansas. De-icing

rock salt, which is applied to roadways to melt ice and snow,

represents the largest end-use segment of rock salt by volume.

Under the consent decree, NAMSCO was required to divest either

Carey's or American's rock salt business to a purchaser approved

by the Department. The decree also enjoined NAMSCO from

acquiring another rock salt mine in Cote Blanche, Louisiana, from

Domtar, Inc., of Montreal, Canada, unless NAMSCO also divested

the second of its Kansas rock salt mines to a different qualified

purchaser. Divestiture of both Kansas mines has occurred.

In Unite tates v. The Ra anisation Plc, the Division

challenged the proposed acquisition of Deluxe Laboratories, an

unincorporated division of Fox, Inc., by the Rank Organisation

Plc, which owns Rank America, Inc. The lawsuit alleged that the

effect of the acquisition would lessen competition in the North

American market for the production of wide-release motion picture

prints. The complaint alleged that in 1989 Deluxe and Rank had a

combined market share of 42 percent, based on capacity, and about

51 percent based on production. In 1989, total sales in the

wide-release print market were more than $140 million. After a

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SSE ORE SESS Sata OE Bs tng ERR a. ane nema bet ON,

consolidated trial on the merits and a hearing on a motion for

preliminary injunction, the district court dismissed the

complaint, holding that the government had failed to establish

that the relevant geographic market was North America.

In United States v. Pacific Amphitheatre Partnership, the

Division challenged the proposed combination of assets and

operations of Pacific Amphitheatre of Costa Mesa, California, and

the Irvine Meadows Amphitheater Partnership of Irvine,

California. Total revenues from concerts at both Irvine Meadows

and Pacific Amphitheatres were approximately $16 million to $19

million annually. The complaint alleged that the proposed merger

would lessen competition in the rental of concert venues in

Orange County, California. The parties abandoned the transaction

upon filing of the complaint and, on November 27, 1990, an order

was signed and entered by the court dismissing the complaint

without prejudice.

In United States v. The Procter & Gamble Company, the

Division challenged the proposed exclusive marketing and

distribution agreement under which The Procter & Gamble Company

would acquire exclusive rights to market and distribute Maalox, a

product of Rhone-Poulenc Rorer, Inc. (formerly Rorer Group). The

complaint alleged that the proposed agreement would lessen

competition in the sale of over-the-counter ("OTC") stomach

remedies. Procter & Gamble manufactures and markets Pepto-Bismol

and this proposed agreement would have made it the Nation's

largest manufacturer of OTC remedies used for relief of common

stomach and digestive discomforts. In 1989, total retail sales

of OTC stomach remedies in the United States were in excess of

$900 million. After the complaint was filed, the parties

abandoned the transaction and the government agreed to a

voluntary dismissal of the complaint without prejudice. The

complaint was dismissed on August 27, 1990. - y

In United States v. Brown & Root, Inc., the Division

challenged the proposed $80 million acquisition by Offshore

Pipelines, Inc. ("OPI"), of marine construction vessels and

associated assets from Brown & Root, Inc. OPI and Brown & Root,

both of Houston, Texas, operated marine construction barges,

including barges capable of laying and burying oil and natural

gas pipelines on the sea bottom. They sold such services to

crude oil and natural gas transmission companies in connection

with the offshore production of oil and gas. Both companies were

major providers of these services in the United States portion of

the Gulf of Mexico. In 1989, OPI had revenues of $104 million in

the Gulf, while Brown & Root's worldwide revenues were $130

million in such services. The complaint alleged that the

proposed acquisition would lessen competition in the United

States section of the Gulf of Mexico in providing barge services

in the “intermediate pipelay/pipebury market," which involves

water depths of approximately 200 feet to 400 feet, or pipe with

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12-inch or larger diameters. Brown & Roct and OPI were two of

four companies cperating in this market. In 1989, total revenues

in the pipelay/pipebury market were $25 million, with OPI

accounting for about 27 percent and Brown & Root accounting for

about 31 percent. Under the consent decree, OPI was required to

divest two combination pipelay/pipebury barges capable of

performing services for the intermediate market. One of the

divestitures has occurred and the other has not yet been

accomplished.

Additionally, the Division filed a complaint and comments

before the Interstate Commerce Commission ("ICC") on November 17,

1989, in response to a Notice of Exemption, opposing the proposed

acquisition by Brink's Incorporated of Loomis Armored, Inc., and

requesting the ICC to order discovery from Loomis and Brink's

(which the ICC did). Thereafter, Loomis withdrew its Notice

of Exemption, the Division filed a motion to dismiss the

preceeding and, on March 29, 1990, the ICC dismissed the

proceeding without prejudice.

During fiscal year 1990, the Division investigated one bank

merger transaction for which divestiture was required prior to or

concurrently with the acquisition. The transaction involved the

acquisition of Trustcorp Inc., Toledo, Ohio, by Society

Corporation, Cleveland, Ohio. A "not significantly adverse"

letter conditioned on divestiture prior to or concurrently with

consummation of the transaction was sent by the Division to the

Board of Governors of the Federal Reserve System on October 25,

1989.

Finally, on two occasions during fiscal year 1990 the

Division informed the parties to a proposed transaction that it

would file suit challenging the transaction unless the parties

restructured the proposal to avoid competitive problems or

abandoned the proposal altogether.” The parties. abandoned the

proposed transactions. On one occasion, during fiscal year 1990,

6 Department of Justice Press Release issued November 20,

i989, involving the proposed acquisition of Loomis Armored, Inc.,

headquartered in Piscataway, New Jersey, by Brink's Incorporated

of Darien, Connecticut.

u Department of Justice Press Release issued May 3, 1990,

involving the management agreement and other agreements between

American Multi-Cinema Inc. and Mid-American Cinema Corp., two

Kansas City exhibitors of first-run motion pictures; and

Department of Justice Press Release issued September 11, 1990,

involving the proposed consolidation between Boringuen Container

Corporation and Proalfa-Puerto Rico Inc. of Puerto Rico.

13

PRS Se NT

the Department issued a press release stating its intention not

to challenge, since the transaction was restructured.

2. Federal Trade Commission

The Commission authorized its staff to seek preliminary

injunctions in seven merger cases in fiscal year 1990. In four

of these cases, the parties abandoned the transaction before the

motion for preliminary injunction was filed in court.

8 Department of Justice Press Release issued December 29,

1989, involving the proposed acquisition of International

Banknote Company, Inc., by United States Banknote Company, L.P.,

both of New York, New York.

9 FTC news release issued December 15, 1989, involving

the proposed acquisition by SKW Alloys, Inc., of K.B. Alloys,

Inc. The press release reported that the Commission had reason

to believe the acquisition would substantially lessen competition

in the manufacture and sale of aluminum-grain refiners. These

refiners are used to make aluminum more malleable for use in such

products as aerospace parts, automotive components and beverage

cans. SKW is directly owned by SKW Trotberg AG, which also

directly owns a British subsidiary, Anglo Blackwells, which is a

direct competitor of K.B. Alloys.

FTC news release issued March 9, 1990, involving the

proposed acquisition by Bayer A.G. of Columbian Chemicals, Inc.'s

synthetic iron oxide business. Synthetic iron oxides are

primarily used to impart color to paints, cement and plastics.

The press release reported that the Commission had reason to

believe that the acquisition would substantially reduce

competition in the manufacture and sale of synthetic iron oxides

in the United States. Bayor A.G. and Columbian Chemicals were

two of only three producers of synthetic iron oxides in the

United States. a

FTC news release issued June 26, 1990, involving the

proposed acquisition by FlightSafety International, Inc., of

flight simulator assets used in Bicoastal Corp.'s SimuFlite

businesses. The press release reported that the Commission had

reason to believe that the acquisition would substantially lessen

competition or tend to create a monopoly in the provision of

simulator training services to business jet pilots in North

America. FlightSafety International and Bicoastal were the two

largest providers of such simulator training

FTC news release issued June 28, 1990, involving the

proposed acquisition by Rhone-Poulenc, Inc., of Olin

Corporation's sulfuric acid assets. The press release reported

(continued...)

14

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In Federal Trade Commission v. Imo Industries, Inc. ,°” the

Commission filed for a preliminary injunction alleging that the

proposed acquisition by Imo Industries of Texas Optic-Electronic

Corp. ("OEC"), a wholly-owned subsidiary of United Scientific

Holdings plc, a British corporation, would substantially lessen

competition in the production of certain image intensifier night

vision tubes sold primarily to the defense industry. Imo and OEC

are two of the largest manufacturers of the products in the

United States. On November 22, 1989, the district court granted

the Commission's motion for a preliminary injunction. The

Commission also issued an administrative complaint and, on April

25, 1990, issued a decision and order.” The order requires Imo

to obtain Commission approval before acquiring any company that

has manufactured and sold 25 millimeter second generation image

intensifier tubes to the U.S. Department of Defense at any time

since January 1, 1988.

In Federal Trade Commission v. Atlantic Richfield

Company,” the Commission filed for a preliminary injunction

rescinding Atlantic Richfield Company's ("ARCO") acquisition of

Union Carbide Corporation's ("UCC") urethane polyether polyol

("UPP") and propylene glycol ("PG") assets and-to prevent ARCO's

further acquisition of Union Carbide's UPP and PG assets. The

Commission stated the acquisition would substantially lessen

competition in the manufacture and sale of UPP and PG as well as

potential competition in propylene oxide. ARCO and UCC were

reported to be leading producers in both these highly

concentrated markets. The Commission also issued an

administrative complaint. The complaint filed in the district

court was stayed pending the Commission's final order. The

*(...continued) aan

that the Commission had reason to believe that the proposed

acquisition would substantially lessen competition in

regeneration of sulfuric acid used as a catalyst in industrial

processes including production of a component of high octane

gasoline.

20 Federal Trade Commission v. Imo -Industries, Inc., Civ.

No. 89-2955 (D.D.C. filed November 22, 1989; preliminary

injunction order entered November 22, 1989).

24 Imo Industries, Inc., Docket No. D.9235 (issued April

25, 1990).

22 Federal Trade Commission v. Atlantic Richfield Company,

Civ. No. 90-1657 (D.D.C. filed July 18, 1990; preliminary

injunction dismissed without prejudice September 21, 1990).

15

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Commission issued a decision and order on November 26, 1990.77

Under the order, ARCO was required to divest the PG and UPP

assets and businesses to a Commission approved acquirer within

twelve months after the order became final. ARCO and UCC also

agreed to the entry of a final federal court judgment calling for

each company to pay civil penalties to settle charges that they

failed to report the acquisition to the government in a timely

manner.

In Federal Trade Commission v. R. R. Donnelley & Sons

Co.,*' the Commission filed for a preliminary injunction

alleging that Donnelley's proposed acquisition of Meredith/Burda

Companies would substantially lessen competition in high volume

publication rotogravure printing in the United States and the

western United States. Donnelley was the largest high volume

rotogravure printer in the United States and Meredith/Burda was

the third largest. On August 27, 1990, the district court denied

the Commission's motion for a preliminary injunction. The

acquisition between Donnelley and Meredith/Burda was consummated

on or about September 4, 1990. The Commission issued an

administrative complaint on October 11, 1990.” The complaint

alleged that Donnelley's acquisition of Meredith/Burda created a

firm whose share of the market was so high that it had become a

dominant firm. Also, the complaint alleged that the acquisition

had increased the likelihood of successful anticompetitive

conduct, non-rivalrous behavior, and actual or tacit collusion

among the remaining companies offering high volume publication

gravure printing.

In fiscal year 1990, the Commission also issued two

administrative complaints.

In Harold Honickman,* the complaint alleged that Harold

Honickman's 1987 acquisition of Seven-Up Brooklyn Bottling

Company, Inc., substantially lessened competition in the

production, distribution and sale of branded carbonated soft

drinks in the New York Metropolitan area. A consent agreement,

23 Atlantic Richfield Company, Docket No. C3314 (issued

November 26, 1990).

24 Federal Trade Commission v. R. R. Donnelley & Sons Co.,

1990-2 Trade Cas. q 69,240 (D.D.C. filed August 27, 1990;

preliminary injunction denied August 27, 1990).

a R. R. Donnelley & Sons Co., Docket No. D.9243

(complaint issued October 11, 1990).

26 Harold Honickman, Docket No. D.9233 (complaint issued

November 1, 1989).

16

fab

decision and order resolving this matter were issued in fiscal

year 1991.

In Adventist Health System/West,”’ the complaint alleged

that Ukiah Adventist Hospital's agreement to purchase

substantially all of the assets of Ukiah Hospital Corp. ("UHC"),

including Ukiah General Hospital, substantially lessened

competition in general acute care hospital services in the Ukiah,

California area. An administrative law judge dismissed the

complaint on jurisdictional grounds. On appeal, the matter was

reversed by the Commission and remanded to the judge.

The Commission accepted consent agreements for comment and

issued a complaint and decision and order in eight merger cases

during fiscal year 1990.

In Reading Hospital and Medical Center,” the complaint

alleged that the merger of The Reading Hospital and Community

General Hospital would substantially lessen competition in

general acute-care hospital services in the Reading,

Pennsylvania, area. Under the order, The Reading Hospital and

Community General Hospital were required to obtain Commission

approval before merging with each other or with any other

hospital in Berks County, Pennsylvania.

In Rhone-Poulenc §.A.,” the complaint alleged that Rhone-

Poulenc's acquisition cf Marschall Dairy Products from Miles,

inc., would substantially lessen competition in the manufacture

and sale of dairy cultures, which are used to make cheese and

other dairy products. Under the order, Rhone-Poulenc was

permitted to acquire Marschall but, for five years, Rhone-Poulenc

must grant licenses for a $50 fee for any of Marschall's dairy

culture products to anyone who requests them, with the exception

of two of its major competitors, Dairyland and Hansen. |

In Archer~Daniels-Midland Company,” the complaint alleged

that Archer-Daniels-Midland Company's ("ADM") proposed

2 Adventist Health System/West, Docket No. D.9234

(complaint issued November 17, 1989; dismissed by the

administrative law judge on August 2, 1990, remanded by the

Commission on August 2, 1991).

28 The Reading Hospital and Medical Center, Docket No.

C3284 (issued April 10, 1990).

29 Rhone-Poulenc S.A., Docket No. C3287 (issued May 1,

1990). -

30 Archer-Daniels-Midland Company, Docket No. C3289

(issued May 22, 1990).

17

acquisition of Dixie Portland Flour Mills, Inc. ("Dixie"), would

substantially lessen competition in the manufacture and sale of

bakery flour delivered in bulk in the southeastern United States.

Under the order, ADM was required to divest Dixie mills located

in Knoxville, Tennessee, and Milner, Georgia. However, the

Commission, at its discretion, may permit ADM to sell the Dixie

Mill in Cleveland, Tennessee, rather than the mill in Knoxville.

In Emerson Electric Co.,*! the complaint alleged that

Emerson's acquisition of McGill Manufacturing Co. would

substantially lessen competition in the manufacture and sale of

mounted ball bearings in the United States. Under the order,

Emerson was permitted to acquire McGill, but it was required to

sell McGill's mounted ball bearing assets to a Commission

approved acquirer within twelve months after the order became

final. Emerson also was required to hold separate all of

McGill's Bearing Division assets until the divestiture was made.

In Institut Merieux S.A.,°" the complaint alleged that

Merieux's acquisition of Connaught BioSciences, Inc., would

substantially lessen competition in the manufacture and sale of’

rabies vaccine and inactivated polio vaccine in the United

States. Under the order, Merieux was required to lease

Connaught's rabies vaccine business in Toronto, Ontario, for at

least 25 years to a lessee approved by both the Commission and

Investment Canada, the government agency responsible for foreign

investment in Canada.

In Central Soya Compan fae the complaint alleged that

Soya's acquisition of A.E. Staley Manufacturing Co.'s soy-protein

concentrate ("SPC") assets substantially lessened competition in

the SPC market in the United States by eliminating actual

competition between the two companies; increasing Soya's ability

unilaterally to exercise market power; and increasing the

likelihood of collusion. the order requires Soya and its parent

company, Beghin-Say, S.A., to obtain Commission approval before

acquiring any SPC assets or the stock of any company engaged in

the manufacture of SPC within the United States. However, Soya

was permitted to make certain small purchases of SPC and SPC

equipment and take non-exclusive licenses without obtaining prior

Commission approval.

31 Emerson Electric Co., Docket No. C3291 (issued June 22,

1990).

32 Institut Merieux S.A., Docket No. C3301 (issued August

8, 1990).

33 Central Soya Company, Docket No. C3303 (issued August

27, 1990).

18

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In Amersham International pic,” the complaint alleged that

Amersham's acquisition of Medi-Physics, Inc., would substantially

;essen competition in the manufacture and sale of

radiopharmaceutical brain perfusion imaging agents for use with

Single Positron Emission Controlled Tomography ("SPECT")

equipment. Under the order, Amersham was required to divest

Medi-Physics' "SPECTamine" business assets to IMP, Inc., a newly

formed Houston company.

In Reckitt & Colman ple,” the cemplaint alleged that

Reckitt & Colman's ("R&C") acquisition of the Boyle-Midway

Division of American Home Products Corporation would

substantially lessen competition and tend to create a monopoly in

the business of manufacturing, marketing and selling rug cleaning

products. Under the order, R&C was required to divest its rug

cleaning products business to a Commission approved acquirer

within eight months of the date the order became final. If it

did not divest its assets in that time, it was required to divest

the Woolite rug cleaning assets of Boyle within six months

thereafter. ~

In fiscal year 1990, the Commission also accepted for public

comment three consent agreements which became final after

September 30, 1990.

In E-Z-EM, Inc., ° the Commission accepted for public

comment a consent agreement to settle its complaint that E-Z-EM,

Inc.'s, ("EZM") acquisition of Lafayette Pharmacal, Inc.,

substantially lessened competition and created a monopoly in the

United States market for barium diagnostic products. The

Commission issued a complaint and decision and order on October

29, 1990. EZM manufactured medical products, including barium

sulfate products used by radiologists in x-ray diagnostic

applications. Prior to its acquisition by E2M in 1988, Lafayette

manufactured barium sulfate diagnostic products at’its Lafayette,

Indiana, plant. Under the order, E2M agreed to divest all of the

assets it acquired from Lafayette. Also, it agreed to obtain

Commission approval before selling or acquiring assets related to

the barium diagnostic products business or before selling any EZM

shares to anyone already engaged in the business in the United

States, or acquiring the same assets or interest from anyone

already engaged in the business in the United States.

* Amersham International ple, Docket No. C3305 (issued

September 14, 1990).

3 Reckitt & Colman plc, Docket No. C3306 (issued

September 26, 1990).

36 E-Z-EM, Inc., Docket No. C3311 (issued October 29,

1990).

19

SPS EET IN PER A

In TSN PLC,” the Commission accepted for public comment a

consent agreement to settle its complaint that T&N PLC's ("T&N")

proposed acquisition of J.P. Industries, Inc. ("JPI"), would

substantially lessen competition or tend to create a monopoly in

the manufacture and sale of thinwall and tri-metal heavywall

engine bearings in the United States. The Commission issued a

complaint and decision and order on November 8, 1990. T&N and

JPI both manufactured and sold engine bearings. Under the order,

T&N was permitted to complete the acquisition, but it had to

divest certain assets used in the production, manufacture and

sale of thinwall and tri-metal heavywall engine bearings.

In Roche Holding Ltd.,** the Commission accepted for public

comment a consent agreement to settle its complaint that Roche

Holdings Ltd.'s ("Roche") acquisition of a controlling interest

in Genentech, Inc., would substantially lessen competition in

certain markets for vitamin C; for therapeutic drugs for the

treatment of growth deficiency, including human-growth hormone

and growth hormone releasing factor; and, for CD4-based

therapeutics for the treatment of AIDS/HIV infection. The

Commission issued a complaint and decision and order on November

28, 1990. Roche is a Swiss pharmaceutical company which had

developed and marketed many pharmaceuticals in the United States

and has conducted extensive research and development in

biotechnology. Genentech is a leading biotechnology company

based in San Francisco. Under the order, Roche was required to

divest either Genentech's interest in GLC Associates (a

partnership between Genentech and Lubrizol, which had researched

and patented a new vitamin C production process) or the

partnership's vitamin C assets. Roche also was required to

divest its human growth hormone releasing factor business. [In

addition, Roche must license its CD4-based therapeutic United

States' patents for a modest royalty to anyone who requests a

license for ten years after the date of the final order.

The Commission issued decisions and orders in four merger

cases during fiscal year 1990 involving acquisitions in which the

administrative complaint was issued before October 1, 1989.

8

In e ca- ttli fo) outhwe .

Pepper/Seven-Up Company,” Dr. Pepper/Seven-Up Company ("Dr.

7 T&N PLC, Docket No. C3312 (issued November 8, 1990).

38 Roche Holding Ltd., Docket No. C3315 (issued November

28, 1990).

39 The Coca-Cola Bottling Company of the Southwest and Dr.

Pepper/Seven-Up Company, Docket No. D.9215 (order issued, with

respect to Dr. Pepper/Seven-Up Company, on December 20, 1989;

(continued...)

20

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Pepper") agreed to settle charges stemming from The Coca-Cola

Bottling Company of the Southwest (“CCSW") acquisition of certain

San Antonio Dr. Pepper Bottling Company assets from Dr. Pepper in

1984. The Commission alleged in a complaint that CCSW's

acquisition substantially lessened competition in the production,

distribution and sale of carbonated soft drinks in at least a ten

county area, which included San Antonio, Texas. Under the order,

Dr. Pepper agreed not to take actions that would interfere with

any relief the Commission might order if it is determined that

CCSW violated the law. An administrative law judge subsequently

dismissed the complaint against CCSW. The dismissal is on appeal

to the Commission.

In Illinois Cereal Mills, Inc.,°° Illinois Cereal Mills,

Inc. (“Illinois Cereal"), agreed to settle charges stemming from

its acquisition of Lincoln Grain Co. from Elders Grain, Inc., in

1988. The Commission alleged in a complaint that Illinois

Cereal's acquisition of Lincoln Grain would substantially lessen

competition in the production and sale of dry corn mill products

in the United States. The Commission authorized its staff to

seek rescission of the acquisition which was later granted by the

district court and affirmed on appeal.*’ Under~the order,

Illinois Cereal was required to obtain Commission approval before

acquiring any assets of, or interest in, any company in the

industrial dry corn milling industry, with certain exceptions for

relatively small acquisitions. On May 31, 1990, the Commission

issued a final order dismissing the complaint against Elders.

In Promodes S.A., Red Food Stores, Inc. ,*” Red Food Stores,

Inc., and its French grocery company parent, Promodes S.A.,

agreed to settle charges stemming from its acquisition of all

seven of Kroger Company's grocery stores in the Chattanooga

metropolitan area. The Commission alleged that the preposed

acquisition would substantially lessen competition among stores

in that area. The Commission authorized its staff to seek a

preliminary injunction to block the transaction which was denied

9’. . continued)

dismissed, regarding The Coca-Cola Bottling Company of the

Southwest, by the administrative law judge on June 14, 1991).

“0 Illinois Cereal Mills, Inc., Docket No. D.9213 (order

issued, regarding Illinois Cereal Mills, on March 12, 1990;

complaint dismissed, regarding Elders Grain, on May 31, 19930).

“4 Federal Trade Commission v. Illinois Cereal Mills,

Inc., 691 F. Supp. 1131 (N.D. Ill. 1988), aff'd sub nom. Federal

Trade Commission v. Elders Grain, Inc., 868 F. 2d 901 (1989).

“2 Promodes S.A., Docket No. D.9228 (issued May 17, 1990).

21

by the district court.” Under the order, Red Food was required

to divest four of the seven former Kroger stores it acquired and

two Red Food stores.

In Olin Corporation,“ the Commission upheld a decision by

an administrative law judge which held that Olin Corporation's

acquisition of FMC Corporation's swimming pool chemical business

was likely to lessen competition in the manufacture and sale of

sanitizing chemicals for swimming pools. Under the order, Olin

was required to divest the FMC assets within twelve months.

The Commission issued a decision and order in three merger

cases during fiscal year 1990 in which it had previously accepted

consent agreements for public comment before October 1, 1989.

In Arkla, Inc.,” Arkla agreed to settle charges stemming

from its acquisition of Transark Transmission Company. The

Commission alleged in its complaint that Arkla's acquisition of

Transark substantially lessened competition in the pipeline

transportation of natural gas in both the Arkoma Basin area and

the Russellville-Morrilton-Conway corridor of Arkansas. Under

the order, Arkla was required to divest either the Transark

pipeline or an undivided interest in the Arkla pipeline system.

In MTH Holdings, Inc.,* MTH agreed to settle charges

stemming from its acquisition of the Grand Union Company ("GU")

from GU Acquisition Corporation ("GUAC"). GUAC owned and

operated GU which operated a chain of 304 retail grocery stores

in the United States. Both MTH and Salomon, Inc., which was to

acquire a minority stake in GUAC, were investment banking firms.

MTH in turn controlled P&C Food Markets, Inc., a retail grocery

store chain. The Commission alleged in its complaint that MTH's

acquisition would substantially lessen competition among grocery

stores in twelve towns and cities in New York and Vermont. Under

the order, MTH was required to divest one retail grocery owned or

operated by either P&C or GU in three towns in New York and in

seven towns or areas in Vermont. MTH also was required to divest

two retail grocery stores owned or operated by either P&C or GU

Federal Trade Commission v. Promodes, S.A., Red Food

Stores, Inc., The Kroger Company, 1989-2 Trade Cas. | 68,688

(N.D. Ga. decided April 14, 1989 and entered April 18, 1989).

43

44

1990).

Olin Corporation, Docket No. D.9196 (issued June 13,

“° Arkla, Inc., Docket No. C3265 (issued October 10,

1989).

“6 MTH Holdings, Inc., Docket No. C3266 (issued October 6,

1989).

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in the Rutland, Vermont, area, and four retail grocery stores

owned or operated by either P&C or GU in the Burlington, Vermont,

Metropolitan Statistical Area.

In Societe Nationale Elf Acquitaine,*’ Societe Nationale

Elf Acquitaine ("Elf") agreed to settle charges stemming from its

acquisition of Pennwalt Corporation. The Commission alleged in

its complaint that Elf's acquisition of Pennwalt would

substantially lessen competition in the production and sale of

two chemical products, vinylidene fluoride monomer and

polyvinlyedene fluoride. Under the order, Elf was permitted to

acquire Pennwalt, but was required to divest Pennwalt's chemical

manufacturing plant in Thorofare, New Jersey, and to hold

separate Pennwalt's entire fluorocarbon division pending the

divestiture. Elf also was required to obtain Commission approval

before acquiring any interest in any company that manufactures or

sells either of the two chemicals in the United States.

ASSESSMENT OF THE EFFECTS OF THE PREMERGER NOTIFICATION PROGRAM

Although a complete assessment of the impact of the

premerger notification program on the business community and on

antitrust enforcement is not possible in this limited report, the

following observations can be made.

First, as indicated in past annual reports, one of the

premerger notification program's primary objectives, eliminatin

the so-called "midnight merger," has been achieved. The

requirement that parties file and wait ensures that virtually all

significant mergers or acquisitions occurring in the United

States will be reviewed by the antitrust agencies prior to

consummation. The agencies generally have the opportunity to

challenge unlawful transactions before they occur, thus avoiding

the problem of constructing effective post-acquisition’ relief.

Second, in most cases the parties provide sufficient

information to allow the enforcement agencies to determine

promptly whether a transaction raises any antitrust problems. In

addition, over the years, parties have increasingly supplied

information voluntarily to the Commission and the Antitrust

Division. This cooperation has resulted in fewer second requests

than would otherwise have been necessary. - -

Finally, the existence of the premerger notification program

alerts businesses to the antitrust concerns raised by proposed

transactions. In addition, the greatly increased probability

that antitrust violations will be detected prior to consummation

“7 Societe Nationale Elf Acquitaine, Docket No. C3270

(issued December 28, 1989).

23

ERE MONS 2 SO En

may deter some competitively questionable transactions. Prior to

the premerger notification program, businesses could, and

frequently did, consummate transactions which raised significant

antitrust concerns, before the antitrust agencies had the

opportunity to adequately consider their competitive effects.

The enforcement agencies were forced to pursue lengthy postacquisition litigation during the course of which the consummated

transaction continued in place (and afterwards as well, where

effective post-acquisition relief was not possible or available).

Because the premerger notification program requires reporting

before consummation, this problem has been significantly reduced.

The Assistant Attorney General of the Antitrust Division

concurs with this annual report.

Insert date MY? ’ igp

24

‘RRP RAT TERRY ht

Appendix A

Appendix B

Appendix C

Exhibit A

Exhibit B

List of Appendices

Summary of Transactions, Fiscal Years 1979-

1990

Number of Filings Received and Transactions

Reported by Month for Fiscal Years 1979-1990.

Transactions in Which Additional Information

Was Requested for Calendar Years 1981-1984

and Fiscal Years 1985-1990.

List of Attachments

Statistical tables for fiscal year 1990,

presenting data profiling Hart-Scott-Rodino

premerger notification filings and

enforcement interest.

Statement of the Federal Trade Commission on

Hart-Scott-Rodino filing fees.

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SS6T SESZ T6EZ OLTZ O99% TOES GEE €06 E14 %Z9L WN WN W HOIHK MI SNOILOVSNVUL

TLTéb OESS ZTLIS Told UISE Se6z BIbZ LEE 950% Poet zSSt Epgt /T GQ@aIzOad SONIA

T9tl CORT «OPLZ ELCSZ 6GHGE «CO9T OEE EGOT EOZT 966 pee 98 G@LUOdAY SNOLLOVSNVEL

O66T GBGT O86 LOGE 9061 SGT vect East ZaEr Te6t O86T 6461

SUV4A IVOSId

BNOILIVSNVEL 4O AUVHHNS

WV MIGNaddv¥

op 8 Ved wos

EN ee het ha ee aE ete on ebtahte conwconnl

Appendix B

[OCR skipped on page(s) 31-59]

[Read from a scan; the first 30 pages.]