# THIRTEENTH ANNUAL REPORT (1990)

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- **Document type:** Agency decision

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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).
ws oa

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
a

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). ¢

ll

10

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

ll
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

12
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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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Appendix B
[OCR skipped on page(s) 31-59]

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Aftc%3Ad35f0c528826828e. Public record. Not legal advice.