Koninklijke Ahold NV; Ahold USA, Inc.; Proposed Consent Agreement With Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 961-0052]

Koninklijke Ahold NV; Ahold USA, Inc.; Proposed Consent Agreement

With Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting

unfair or deceptive acts or practices and unfair methods of

competition, this consent agreement, accepted subject to final

Commission approval, would require, among other things, the Atlanta-

based supermarket chain owner to divest a total of 30 supermarkets or

supermarket properties in 14 communities throughout Connecticut, Rhode

Island, and Massachusetts within 30 days of the Commission's final

approval of this settlement. The consent agreement settles allegations

that Ahold's acquisition of The Stop & Shop Companies, Inc. would

violate antitrust laws by substantially lessening supermarket

competition in those areas, possibly resulting in higher prices or

reduced quality and selection for consumers.

DATES: Comments must be received on or before September 23, 1996.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

William Baer, Federal Trade Commission, 6th and Pennsylvania Avenue,

NW, H-374, Washington, DC 20580. (202) 326-2932.

George Cary, Federal Trade Commission, 6th and Pennsylvania Avenue, NW,

H-374, Washington, DC 20580. (202) 326-3741.

SUPPLEMENTARY INFORMATION Pursuant to Section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of the

Commission's Rules of Practice (16 CFR 2.34), notice is hereby given

that the following consent agreement containing a consent order to

cease and desist, having been filed with and accepted, subject to final

approval, by the Commission, has been placed on the public record for a

period of sixty (60) days. Public comment is invited. Such comments or

views will be considered by the Commission and will be available for

inspection and copying at its principal office in accordance with

Section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR

4.9(b)(6)(ii)).

Agreement Containing Consent Order

The Federal Trade Commission (``Commission''), having initiated an

investigation of the proposed acquisition of The Stop & Shop Companies,

Inc. (``Stop & Shop'') by Koninklijke Ahold nv (``Royal Ahold'') and

Ahold USA, Inc. (``Ahold USA''), and it now appearing that Royal Ahold

and Ahold USA, hereinafter sometimes referred to as ``Proposed

Respondents,''

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are willing to enter into an agreement containing an Order to divest

certain assets and to cease and desist from certain acts, and providing

for other relief:

It is hereby agreed by and between Proposed Respondents, by their

duly authorized officers and attorneys, and counsel for the Commission

that:

1. Proposed Respondent Koninklijke Ahold nv is a corporation

organized, existing, and doing business under and by virtue of the laws

of The Netherlands, with its office and principal place of business

located at Albert Heijnweg 1, 1507 EH Zaandam, The Netherlands.

2. Proposed Respondent Ahold USA, Inc., is a corporation organized,

existing, and doing business under and by virtue of the laws of

Delaware, with its office and principal place of business located at

executive offices at One Atlanta Plaza, 950 East Paces Ferry Road,

Suite 2575, Atlanta, Georgia 30326.

3. Proposed Respondents admit all the jurisdictional facts set

forth in the draft of complaint.

4. Proposed Respondents waive:

a. Any further procedural steps;

b. The requirement that the Commission's decision contain a

statement of findings of fact and conclusions of law;

c. All rights to seek judicial review or otherwise to challenge or

contest the validity of the Order entered pursuant to this agreement;

and

d. Any claim under the Equal Access to Justice Act.

5. This agreement shall not become part of the public record of the

proceeding unless and until it is accepted by the Commission. If this

agreement is accepted by the Commission it, together with the draft of

complaint contemplated thereby, will be placed on the public record for

a period of sixty (60) days and information in respect thereto publicly

released. The Commission thereafter may either withdraw its acceptance

of this agreement and so notify the Proposed Respondents, in which

event it will take such action as it may consider appropriate, or issue

and serve its complaint (in such form as the circumstances may require)

and decision, in disposition of the proceeding.

6. This agreement is for settlement purposes only and does not

constitute an admission by Proposed Respondents that the law has been

violated as alleged in the draft of the complaint, or that the facts as

alleged in the draft complaint, other than jurisdictional facts, are

true.

7. This agreement contemplates that, if it is accepted by the

Commission, and if such acceptance is not subsequently withdrawn by the

Commission pursuant to the provisions of Section 2.34 of the

Commission's Rules, the Commission may, without further notice to the

Proposed Respondents, (1) issue its complaint corresponding in form and

substance with the draft of complaint and its decision containing the

following Order to divest (as modified by any approved final purchase

and sale agreements) and to cease and desist in disposition of the

proceeding, and (2) make information public with respect thereto. When

so entered, the Order shall have the same force and effect and may be

altered, modified, or set aside in the same time provided by statute

for other orders. The Order shall become final upon service. Delivery

by the United States Postal Service of the complaint and decision

containing the agreed-to Order to Proposed Respondents' counsel, Robert

D. Paul, Esq., White & Case, 601 13th Street, N.W., Suite 600 South,

Washington, D.C. 20005, shall constitute service. Proposed Respondents

waive any right they may have to any other manner of service. The

complaint may be used in construing the terms of the Order, and no

agreement, understanding, representation, or interpretation not

contained in the Order or the Agreement may be used to vary or

contradict the terms of the Order.

8. Proposed Respondents have read the proposed complaint and Order

contemplated hereby. Proposed Respondents understand that once the

Order has been issued, they will be required to file verified written

reports showing that they have fully complied with the Order. Proposed

Respondents further understand that they may be liable for civil

penalties in the amount provided by law for each violation of the Order

after it becomes final.

Order

I

It is ordered that, as used in this Order, the following

definitions shall apply:

A. ``Royal Ahold'' means Koninklijke Ahold nv, its predecessors,

subsidiaries, divisions, and groups and affiliates controlled by

Koninklijke Ahold nv, their successors and assigns, and their

directors, officers, employees, agents, and representatives.

B. ``Ahold USA'' means Ahold USA, Inc., its predecessors,

subsidiaries, divisions, and groups and affiliates controlled by Ahold

USA, Inc., their successors and assigns, and their directors, officers,

employees, agents, and representatives.

C. ``Respondents'' means Royal Ahold and Ahold USA.

D. ``Assets to be Divested'' means the supermarkets identified in

Paragraph II.A. of this Order as well as the supermarket business

operated, and all assets, leases, properties, business and goodwill,

tangible and intangible, utilized in the supermarket operations at

those locations, but need not include the ``Stop & Shop'' or

``Edwards'' trade names, trade dress, trade marks, service marks, and

such other intangible assets that Respondents also utilize in their

business at locations other than those identified in Paragraph II.A. of

this Order.

E. ``Commission'' means the Federal Trade Commission.

F. ``Acquisition'' means Royal Ahold's proposed purchase of all the

voting stock of Stop & Shop pursuant to an agreement dated on or about

March 27, 1996.

G. ``Supermarket'' means a full-line retail grocery store with

annual sales of at least two million dollars that carries a wide

variety of food and grocery items in particular product categories,

including bread and dairy products; refrigerated and frozen food and

beverage products; fresh and prepared meats and poultry; produce,

including fresh fruits and vegetables; shelf-stable food and beverage

products, including canned and other types of packaged products; staple

foodstuffs, which may include salt, sugar, flour, sauces, spices,

coffee, and tea; and other grocery products, including nonfood items

such as soaps, detergents, paper goods, and other household products.

H. ``Overlap Areas'' means the following incorporated towns and

cities:

(a) New Milford, Connecticut;

(b) Windham and Mansfield, Connecticut;

(c) Wallingford and Meriden, Connecticut;

(d) Waterbury, Watertown, and Naugatuck, Connecticut;

(e) ``The greater Hartford, Connecticut, area,'' which includes

Hartford, New Britain, Newington, Wethersfield, Farmington, West

Hartford, Bloomfield, Windsor, South Windsor, East Hartford,

Manchester, Glastonbury, and Vernon, Connecticut;

(f) Avon and Simsbury, Connecticut;

(g) Enfield, Somers, East Windsor, Suffield, and Windsor Locks,

Connecticut;

(h) Southington and Plainville, Connecticut;

(i) Milford, Orange, West Haven, and New Haven, Connecticut;

(j) East Haven, Branford, Guilford, Madison, Clinton, and Old

Saybrook, Connecticut;

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(k) Fairfield, Stratford, Bridgeport, Trumbull, and Shelton,

Connecticut;

(l) South Kingstown and Narragansett, Rhode Island;

(m) ``The greater Providence, Rhode Island, area,'' which includes

East Providence, Providence, Pawtucket, Warwick, Cranston, Central

Falls, Lincoln, Smithfield, Barrington, Bristol, Cumberland, North

Providence, Johnston, West Warwick, East Greenwich, and Coventry, Rhode

Island; and Attleboro and Seekonk, Massachusetts; and

(n) ``The greater Springfield, Massachusetts, area,'' which

includes Springfield, West Springfield, South Hadley, Chicopee,

Westfield, Holyoke, Agawam, Southwick, Longmeadow, and East Longmeadow,

Massachusetts.

II

It is further ordered that:

A. Respondents shall divest, absolutely and in good faith, within

thirty (30) days from the date this Order becomes final:

(1) To Star Markets Company, pursuant to a letter of intent dated

July 2, 1996:

(a) Edwards supermarket number 821 located at 295 Armistice

Boulevard, Pawtucket, RI;

(b) Edwards supermarket number 751 located at 200 Niantic Avenue,

Providence, RI;

(c) Edwards supermarket number 815 located at 1810 Plainfield Pike,

Cranston, RI;

(d) Edwards supermarket number 817 located at 418 Kingstown Road,

Wakefield, RI;

(e) Edwards supermarket number 779 located at 1401 Bald Hill Road,

Warwick, RI;

(f) Edwards supermarket number 820 located at 1000 Division Street,

East Greenwich, RI; and

(g) Stop & Shop supermarket number 458 located at Route 6 & 1

Commercial Way, Seekonk, MA.

(2) To Bozzuto's Inc., pursuant to a letter of intent dated July 1,

1996:

(a) Edwards supermarket number 295 located at 207 Hartford

Turnpike, Vernon, CT;

(b) Edwards supermarket number 362 located at Newbrite Plaza, 60

East Main Street, New Britain, CT;

(c) Edwards supermarket number 748 located at 333 North Main

Street, West Hartford, CT; and

(d) Edwards supermarket number 768 located at 750 Queen Street,

Southington, CT.

(3) To Shaw's Supermarkets, Inc., pursuant to a letter of intent

dated July 2, 1996:

(a) Edwards supermarket number 725 located at 40 Hazard Avenue,

Enfield, CT;

(b) Edwards supermarket number 742 located at 953 Wolcott Road,

Waterbury, CT;

(c) Edwards supermarket number 758 located at 538 Boston Post Road,

Orange, CT;

(d) Edwards supermarket number 773 located at 875 Bridgeport

Avenue, Shelton, CT;

(e) Stop & Shop supermarket number 665 located at 55 Welles Street,

Glastonbury, CT;

(f) Edwards lease agreement for premises located in the former

Rich's Department Store, Wakefield Mall, Tower Hill Road, South

Kingstown, RI;

(g) Edwards supermarket number 312 located at 1100 Barnum Avenue,

Stratford, CT;

(h) Edwards lease agreement for the former Grand Union store site

located at 800 Barnum Avenue, Stratford, CT;

(i) Edwards supermarket number 200 located at 1975 Black Rock

Turnpike, Fairfield, CT;

(j) Edwards supermarket number 299 located at 1167 Main Street,

Watertown, CT;

(k) Edwards supermarket number 823 located at 266 East Main Street,

Clinton, CT;

(l) Edwards supermarket number 749 located at 60 Cantor Drive,

Willimantic, CT;

(m) Edwards supermarket number 783 located at 245 Kane Street, West

Hartford, CT; and

(n) Edwards supermarket number 317 located at 976 North Colony

Road, Wallingford, CT.

(4) To Big Y Foods, Inc., pursuant to a letter of intent dated June

7, 1996, as modified by letters of July 2, 1996:

(a) Edwards supermarket number 728 located at 830 Boston Post Road,

Guilford, CT;

(b) Edwards supermarket number 722 located at 650 Memorial Drive,

Chicopee, MA;

(c) Edwards supermarket number 704 located at West Main Route 44,

Avon, CT;

(d) Edwards supermarket number 368 located at 3 Kent Road, New

Milford, CT; and

(e) Edwards supermarket number 329 located at 265 Ellington Road,

East Hartford, CT.

B. If Respondents have not divested the Assets to be Divested

pursuant to Paragraph II.A., Respondents shall divest the Assets to be

Divested within thirty (30) days from the date this Order becomes final

to an acquirer or acquirers that receive the prior approval of the

Commission and only in a manner that receives the prior approval of the

Commission.

C. The purpose of the divestiture of the Assets to be Divested is

to ensure the continuation of the Assets to be Divested as ongoing

viable enterprises engaged in the Supermarket business and to remedy

any lessening of competition resulting from the Acquisition as alleged

in the Commission's complaint.

III

It is further ordered that:

A. If Respondents have not divested absolutely and in good faith

the Assets to be Divested pursuant to Paragraph II. of this Order, the

Commission may appoint a trustee to divest the Assets to be Divested.

In the event that the Commission brings an action pursuant to Sec. 5(l)

of the Federal Trade Commission Act, 15 U.S.C. Sec. 45(l), or any other

statute enforced by the Commission, Respondents shall consent to the

appointment of a trustee in such action. Neither the appointment of a

trustee nor a decision not to appoint a trustee under this Paragraph

shall preclude the Commission from seeking civil penalties or any other

relief available to it, including a court-appointed trustee pursuant to

Sec. 5(l) of the Federal Trade Commission Act, or any other statute

enforced by the Commission, for any failure by Respondents to comply

with this Order.

B. If a trustee is appointed by the Commission or a court pursuant

to Paragraph III.A. of this Order, Respondents shall consent to the

following terms and conditions regarding the trustee's powers, duties,

authority, and responsibilities:

1. The Commission shall select the trustee, subject to the consent

of Respondents, which consent shall not be unreasonably withheld. The

trustee shall be a person with experience and expertise in acquisitions

and divestitures. If Respondents have not opposed, in writing,

including the reasons for opposing, the selection of any proposed

trustee within ten (10) days after receipt of written notice by the

staff of the Commission to Respondents of the identity of any proposed

trustee, Respondents shall be deemed to have consented to the selection

of the proposed trustee.

2. Subject to the prior approval of the Commission, the trustee

shall have the exclusive power and authority to divest the Assets to be

Divested.

3. Within ten (10) days after appointment of the trustee,

Respondents shall execute a trust agreement that, subject to the prior

approval of the Commission, and in the case of a court-

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appointed trustee, of the court, transfers to the trustee all rights

and powers necessary to permit the trustee to effect the divestiture

required by this Order.

4. The trustee shall have twelve (12) months from the date the

Commission approves the trust agreement described in Paragraph III.B.3.

to accomplish the divestiture, which shall be subject to the prior

approval of the Commission. If, however, at the end of the twelve (12)

month period, the trustee has submitted a plan of divestiture or

believes that divestiture can be achieved within a reasonable time, the

divestiture period may be extended by the Commission, or in the case of

a court-appointed trustee, by the court; provided, however, the

Commission may extend this period only two (2) times for up to six (6)

months each time.

5. The trustee shall have full and complete access to the Assets to

be Divested and to the personnel, books, records and facilities related

to the Assets to be Divested or to any other relevant information, as

the trustee may reasonably request. Respondents shall develop such

financial or other information as such trustee may reasonably request

and shall cooperate with the trustee. Respondents shall take no action

to interfere with or impede the trustee's accomplishment of the

divestiture. Any delays in divestiture caused by Respondents shall

extend the time for divestiture under this Paragraph in an amount equal

to the delay, as determined by the Commission or, for a court-appointed

trustee, by the court.

6. The trustee shall use his or her best efforts to negotiate the

most favorable price and terms available in each contract that is

submitted to the Commission, subject to Respondents' absolute and

unconditional obligation to divest at no minimum price. The

divestitures shall be made to an acquirer or acquirers that receive the

prior approval of the Commission and only in a manner that receives the

prior approval of the Commission. In the event that the trustee

receives bona fide offers from more than one acquiring entity, the

trustee shall submit all such bids to the Commission, and if the

Commission determines to approve more than one such acquiring entity

for the Assets to be Divested, the trustee shall divest to the

acquiring entity or entities selected by Respondents from among those

approved by the Commission.

7. In the event the trustee determines that he or she is unable to

divest the Assets to be Divested as described in Paragraph II in a

manner consistent with the terms of this Order, the trustee may on his

or her own initiative, or at the direction of the Commission, divest

any additional or substitute supermarkets of the Respondents located in

the respective overlap areas and effect such arrangements as are

necessary to satisfy the requirements of this Order.

8. The trustee shall serve, without bond or other security, at the

cost and expense of Respondents, on such reasonable and customary terms

and conditions as the Commission or a court may set. The trustee shall

have the authority to employ, at the cost and expense of Respondents,

and at reasonable fees, such consultants, accountants, attorneys,

investment bankers, business brokers, appraisers, and other

representatives and assistants as are necessary to carry out the

trustee's duties and responsibilities. The trustee shall account for

all monies derived from the divestiture and all expenses incurred.

After approval by the Commission and, in the case of a court-appointed

trustee, by the court, of the account of the trustee, including fees

for his or her services, all remaining monies shall be paid at the

direction of the Respondents, and the trustee's power shall be

terminated. The trustee's compensation shall be based at least in

significant part on a commission arrangement contingent on the

trustee's divesting the Assets to be Divested, and may include an

incentive arrangement relating to price.

9. Respondents shall indemnify the trustee and hold the trustee

harmless against any losses, claims, damages, liabilities, or expenses

arising out of, or in connection with, the performance of the trustee's

duties, all reasonable fees of counsel and other expenses incurred in

connection with the preparation for, or defense of any claim, whether

or not resulting in any liability, except to the extent that such

liabilities, losses, damages, claims, or expenses result from

misfeasance, gross negligence, willful or wanton acts, or bad faith by

the trustee.

10. If the trustee ceases to act or fails to act diligently, a

substitute trustee shall be appointed in the same manner as provided in

Paragraph III.A. of this Order.

11. The Commission or, in the case of a court-appointed trustee,

the court, may on its own initiative or at the request of the trustee

issue such additional Orders or directions as may be reasonably

necessary or appropriate to accomplish the divestiture required by this

Order.

12. The trustee shall have no obligation or authority to operate or

maintain the Assets to be Divested.

13. The trustee shall report in writing to Respondents and the

Commission every forty-five (45) days concerning the trustee's efforts

to accomplish divestiture.

IV

It is further ordered that:

A. Pending divestiture of the Assets to be Divested, Respondents

shall take such actions as are necessary to maintain the viability,

competitiveness, and marketability of the Assets to be Divested

consistent with Paragraphs II. and III. of this Order and to prevent

the destruction, removal, wasting, deterioration, or impairment of the

Assets to be Divested except in the ordinary course of business and

except for ordinary wear and tear.

B. Respondents shall comply with all the terms of the Asset

Maintenance Agreement attached to this Order and made a part hereof as

Appendix I. The Asset Maintenance Agreement shall continue in effect

until such time as all Assets to be Divested have been divested as

required by this Order.

V

It is further ordered that, for a period of ten (10) years from the

date this Order becomes final, Respondents shall not, without providing

advance written notification to the Commission, directly or indirectly,

through subsidiaries, partnerships, or otherwise:

A. Acquire any ownership or leasehold interest in any facility that

has operated as a supermarket within six (6) months of the date of such

proposed acquisition in the Overlap Areas; or

B. Acquire any stock, share capital, equity, or other interest in

any entity that owns any interest in or operates any supermarket or

owned any interest in or operated any supermarket within six (6) months

of such proposed acquisition in the Overlap Areas.

Provided, however, that advance written notification shall not

apply to the construction of new facilities by Respondents or the

acquisition of or leasing of a facility that has not operated as a

supermarket within six (6) months of Respondents' offer to purchase or

lease.

Said notification shall be given on the Notification and Report

Form set forth in the Appendix to Part 803 of Title 16 of the Code of

Federal Regulations as amended (hereinafter referred to as ``the

Notification''), and shall be prepared and transmitted in accordance

with the requirements of that part, except that no filing fee will be

required for the Notification. The Notification shall be filed with the

Secretary of the Commission and need not be made to

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the United States Department of Justice. The Notification is required

only of Respondents and not of any other party to the transaction.

Respondents shall provide the Notification to the Commission at least

thirty days prior to acquiring any such interest (hereinafter referred

to as the ``first waiting period''). If, within the first waiting

period, representatives of the Commission make a written request for

additional information, Respondents shall not consummate the

transaction until twenty days after substantially complying with such

request for additional information. Early termination of the waiting

periods in this Paragraph may be requested and, where appropriate,

granted by letter from the Bureau of Competition. Provided, however,

that prior notification shall not be required by this Paragraph for a

transaction for which notification is required to be made, and has been

made, pursuant to Section 7A of the Clayton Act, 15 U.S.C. Sec. 18a.

VI

It is further ordered that Respondents shall be bound by the terms

and obligations of the Consent Order issued by the Commission in The

Stop & Shop Companies, Inc., et al., Docket No. C-3649.

VII

It is further ordered that:

A. Within forty-five (45) days after the date this Order becomes

final and every forty-five (45) days thereafter until Respondents have

fully complied with the provisions of Paragraphs II. or III. of this

Order, Respondents shall submit to the Commission verified written

reports setting forth in detail the manner and form in which they

intend to comply, are complying, and have complied with Paragraphs II.

and III. Respondents shall include in their compliance reports, among

other things that are required from time to time, a full description of

the efforts being made to comply with Paragraphs II. and III. of the

Order, including a description of proposals for divestitures and the

identity of all parties contacted. Respondents shall include in their

compliance reports copies of all written communications to and from

such parties concerning divestiture.

B. One year (1) from the date this Order becomes final, annually

for the next nine (9) years on the anniversary of the date this Order

becomes final, and at other times as the Commission may require,

Respondents shall file verified written reports with the Commission

setting forth in detail the manner and form in which they have complied

and are complying with this Order.

VIII

It is further ordered that Respondents shall notify the Commission

at least thirty (30) days prior to any proposed change in Respondents

such as dissolution, assignment, sale resulting in the emergence of a

successor corporation to Respondents, or the creation or dissolution of

subsidiaries or any other change in Respondents that may affect

compliance obligations arising out of the Order.

IX

It is further ordered that, for the purpose of determining or

securing compliance with this Order, Respondents shall permit any duly

authorized representative of the Commission:

A. Upon five days' written notice to Respondents, access, during

office hours and in the presence of counsel, to inspect and copy all

books, ledgers, accounts, correspondence, memoranda and other records

and documents in the possession or under the control of Respondents

relating to any matters contained in this Order; and

B. Upon five days' written notice to Respondents and without

restraint or interference from Respondents, to interview Respondents or

officers, directors, or employees of Respondents in the presence of

counsel.

Appendix I

Asset Maintenance Agreement

This Asset Maintenance Agreement (``Agreement'') is by and

between Koninklijke Ahold nv (``Royal Ahold''), a corporation

organized, existing, and doing business under and by virtue of the

laws of The Netherlands, with its office and principal place of

business located at Albert Heijnweg 1, 1507 EH Zaandam, The

Netherlands; Ahold USA, Inc. (``Ahold USA''), a corporation

organized, existing, and doing business under and by virtue of the

laws of Delaware, with its office and principal place of business

located at One Atlanta Plaza, 950 East Paces Ferry Road, Suite 2575,

Atlanta, GA 30326; and the Federal Trade Commission

(``Commission''), an independent agency of the United States

Government, established under the Federal Trade Commission Act of

1914, 15 U.S.C. Sec. 41, et seq. (collectively ``the Parties'').

Premises

Whereas, Royal Ahold and Ahold USA, pursuant to an agreement

dated on or about March 27, 1996, agreed to acquire the voting stock

of The Stop & Shop Companies, Inc. (``the Acquisition''); and

Whereas, the Commission is now investigating the Acquisition to

determine if it would violate any of the statutes enforced by the

Commission; and

Whereas, if the Commission accepts the attached Agreement

Containing Consent Order, the Commission is required to place it on

the public record for a period of sixty (60) days for public comment

and may subsequently withdraw such acceptance pursuant to the

provisions of Section 2.34 of the Commission's Rules; and

Whereas, the Commission is concerned that if an agreement is not

reached preserving the status quo ante of the Assets to be Divested

as described in the attached Agreement Containing Consent Order

(``Assets'') during the period prior to their divestitures, any

divestiture resulting from any administrative proceeding challenging

the legality of the Acquisition might not be possible, or might

produce a less than effective remedy; and

Whereas, the Commission is concerned that prior to divestiture

to the acquirer or acquirers, it may be necessary to preserve the

continued viability and competitiveness of the Assets; and

Whereas, the purpose of this Agreement and of the Consent Order

is to preserve the Assets pending the divestitures to the acquirer

or acquirers approved by the Federal Trade Commission under the

terms of the Order, in order to remedy any anticompetitive effects

of the Acquisition; and

Whereas, Royal Ahold and Ahold USA entering into this Agreement

shall in no way be construed as an admission by Royal Ahold or Ahold

USA that the Acquisition is illegal; and

Whereas, Royal Ahold and Ahold USA understand that no act or

transaction contemplated by this Agreement shall be deemed immune or

exempt from the provisions of the antitrust laws or the Federal

Trade Commission Act by reason of anything contained in this

Agreement;

Now, therefore, in consideration of the Commission's agreement

that, unless the Commission determines to reject the Consent Order,

it will not seek further relief from the parties with respect to the

Acquisition, except that the Commission may exercise any and all

rights to enforce this Agreement and the Consent Order annexed

hereto and made a part thereof, the Parties agree as follows:

Terms of Agreement

1. Royal Ahold and Ahold USA agree to execute, and upon its

issuance to be bound by, the attached Consent Order. The Parties

further agree that each term defined in the attached Consent Order

shall have the same meaning in this Agreement.

2. Unless the Commission brings an action to seek to enjoin the

proposed Acquisition pursuant to Section 13(b) of the Federal Trade

Commission Act, 15. U.S.C. Sec. 53(b), and obtains a temporary

restraining order or preliminary injunction blocking the proposed

Acquisition, Royal Ahold and Ahold USA will be free to close the

Acquisition after July 15, 1996.

3. Royal Ahold and Ahold USA agree that from the date this

Agreement is signed until the earlier of the dates listed in

subparagraphs 3.a-3.b, they will comply with the provisions of this

Agreement:

a. three business days after the Commission withdraws its

acceptance of the

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Consent Order pursuant to the provisions of Section 2.34 of the

Commission's Rules; or

b. on the day the divestitures set out in the Consent Order have

been completed.

4. From the time Royal Ahold and Ahold USA acquire The Stop &

Shop Companies, Inc., until the divestiture set out in the Consent

Order has been completed, Royal Ahold and Ahold USA shall maintain

the viability and marketability of the Assets, and shall not cause

the wasting or deterioration of the Assets, nor shall they sell,

transfer, encumber or otherwise impair their marketability or

viability.

5. From the time Royal Ahold and Ahold USA acquire The Stop &

Shop Companies, Inc., until the divestiture set out in the Consent

Order has been completed, Royal Ahold and Ahold USA shall maintain

the competitiveness of the Assets. This includes but is not limited

to the maintaining of promotions and discount policies (e.g., double

and triple coupon policies and store coupon promotions) as well as

the continuation of specific store services (e.g., hours of

operation and operation of specific departments).

6. Should the Commission seek in any proceeding to compel Royal

Ahold and Ahold USA to divest themselves of the Assets or to seek

any other injunctive or equitable relief, Royal Ahold and Ahold USA

shall not raise any objection based upon the expiration of the

applicable Hart-Scott-Rodino Antitrust Improvements Act waiting

period or the fact that the Commission has not sought to enjoin the

Acquisition. Royal Ahold and Ahold USA also waive all rights to

contest the validity of this Agreement.

7. For the purpose of determining or securing compliance with

this Agreement, subject to any legally recognized privilege, and

upon written request with reasonable notice to Royal Ahold or Ahold

USA and to their principal offices, Royal Ahold and Ahold USA shall

permit any duly authorized representative or representatives of the

Commission:

a. Upon three (3) days' notice to Royal Ahold or Ahold USA,

access during the office hours of Royal Ahold or Ahold USA, in the

presence of counsel, to inspect and copy all books, ledgers,

accounts, correspondence, memoranda and other records and documents

in the possession or under the control of Royal Ahold or Ahold USA

relating to compliance with this Agreement; and

b. Upon five (5) days' notice to Royal Ahold or Ahold USA and

without restraint or interference from them, to interview officers

or employees of Royal Ahold or Ahold USA, who may have counsel

present, regarding any such matters.

8. This Agreement shall not be binding until approved by the

Commission.

Analysis To Aid Public Comment on the Provisionally Accepted Consent

Order

The Federal Trade Commission (``the Commission'') has accepted

for public comment, from Koninklijke Ahold nv and Ahold USA, Inc.,

Inc. (collectively referred to as ``Ahold''), an agreement

containing a consent order. The agreement is designed to remedy any

anticompetitive effect stemming from Ahold's proposed acquisition of

The Stop & Shop Companies, Inc. (``Stop & Shop'').

This agreement has been placed on the public record for sixty

days for reception of comments from interested persons. The

Commission is requesting public comment on the entire consent

agreement, including the proposed divestitures as well as the

proposed purchasers of these assets.

Comments received during this period will become part of the

public record. After sixty days, the Commission will again review

the agreement and the comments received and will decide whether it

should withdraw from the agreement or make final the agreement's

order.

Complaint's Allegations

The Commission's proposed complaint alleges that Ahold and Stop

& Shop are direct competitors for the retail sale of food and

grocery items in supermarkets in the market areas of (1) New

Milford, Connecticut; (2) Windham and Mansfield, Connecticut; (3)

Wallingford and Meriden, Connecticut; (4) Waterbury, Watertown and

Naugatuck, Connecticut; (5) the greater Hartford, Connecticut area,

which includes Hartford, New Britain, Newington, Wethersfield,

Farmington, West Hartford, Bloomfield, Windsor, South Windsor, East

Hartford, Manchester, Glastonbury, and Vernon, Connecticut; (6) Avon

and Simbsury, Connecticut; (7) Enfield, Somers, East Windsor,

Suffield, and Windsor Locks, Connecticut; (8) Southington and

Plainville, Connecticut; (9) Milford, Orange, West Haven, and New

Haven, Connecticut; (10) East Haven, Branford, Guilford, Madison,

Clinton, and Old Saybrook, Connecticut; (11) Fairfield, Stratford,

Bridgeport, Trumbull, and Shelton, Connecticut; (12) South Kingstown

and Narrangansett, Rhode Island; (13) the greater Providence, Rhode

Island area, which includes East Providence, Providence, Pawtucket,

Warwick, Cranston, Central Falls, Lincoln, Smithfield, Barrington,

Bristol, Cumberland, North Providence, Johnston, West Warwick, East

Greenwich, and Coventry, Rhode Island and Attleboro and Seekonk,

Massachusetts; and (14) Chicopee, Massachusetts. In these areas, the

proposed acquisition would leave a single firm with a market share

substantially greater than 35 percent and would facilitate

unilateral anticompetitive behavior or coordinated interaction.

According to the draft complaint, these markets are highly

concentrated and entry is difficult or unlikely. The Commission has

reason to believe that the acquisition agreement violates Section 5

of the Federal Trade Commission Act and the acquisition, if

consummated, would have anticompetitive effects and would violate

Section 7 of the Clayton Act and Section 5 of the Federal Trade

Commission Act, unless an effective remedy eliminates such

anticompetitive effects.

Settlement Agreement

The agreement containing consent order would, if finally

accepted by the Commission, settle charges that the acquisition may

substantially lessen competition in the fourteen markets.

Proposed Divestiture and Proposed Purchases of Divested Assets

The agreement containing consent order seeks to remedy the

Commission's competitive concerns about the acquisition by requiring

divestiture of specified stores in each market. As with the recent

consent agreements accepted by the Commission in The Scotts Company

(Docket No. C-3613), Illinois Tool Works, Inc. (Docket No. C-3651),

and most recently Fresenius AG (File No. 961-0053), the proposed

order identifies both the assets to be divested and specific

companies to be recommended to the Commission as purchasers for

these assets. The identification of specific buyers for the assets

to be divested will allow the public to comment on the effectiveness

of the proposed relief in the context of specific proposed

purchasers. It also minimizes the delay in restoring competition

lost by the transaction and lessens the risk of unsuccessful

divestiture.

Under the terms of the proposed order, Ahold must divest to Star

Markets Company (1) its supermarket located at 295 Armistice

Boulevard, Pawtucket, Rhode Island; (2) its supermarket located at

200 Niantic Avenue, Providence, Rhode Island; (3) its supermarket

located at 1810 Plainfield Pike, Cranston, Rhode Island; (4) its

supermarket located at 418 Kingstown Road, Wakefield, Rhode Island;

(5) its supermarket located at 1401 Bald Hill Road, Warwick, Rhode

Island; (6) its supermarket located at 1000 Division Street, East

Greenwich, Rhode Island; and (7) the Stop & Shop supermarket located

at Route 6 and 1 Commercial Way, Seekonk, Massachusetts. Star

Markets Company, Inc., is a corporation with headquarters at 625 Mt.

Auburn Street, Cambridge, Massachusetts.

Under the terms of the proposed order, Ahold must also divest to

Bozzuto's Inc. (1) its supermarket located at 207 Hartford Turnpike,

Vernon, Connecticut; (2) its supermarket located at Newbrite Plaza,

60 East Main Street, New Britain, Connecticut; (3) its supermarket

located at 333 North Main Street, West Hartford, Connecticut; and

(4) its supermarket located at 750 Queen Street, Southington,

Connecticut. Bozzuto's Inc. is a corporation with headquarters at

275 Schoolhouse Road, Cheshire, Connecticut.

Under the terms of the proposed order, Ahold must also divest to

Shaw's Supermarkets, Inc. (1) its supermarket located at 40 Hazard

Avenue, Enfield, Connecticut; (2) its supermarket located at 953

Wolcott Road, Waterbury, Connecticut; (3) its supermarket located at

538 Boston Post Road, Orange, Connecticut; (4) its supermarket

located at 875 Bridgeport Avenue, Shelton, Connecticut; (5) Stop &

Shop supermarket number 665 located at 55 Welles Street,

Glastonbury, Connecticut; (6) its lease agreement for the premises

located in the former Rich's Department Store located at the

Wakefield Mall, Tower Hill Road, South Kingstown, Rhode Island; (7)

its supermarket located at 1100 Barnum Avenue, Stratford,

Connecticut; (8) its lease agreement for the Grand Union Store site

located at 800 Barnum Avenue, Stratford, Connecticut; (9) its

supermarket located at 1975 Black Rock Turnpike, Fairfield,

Connecticut; (10) its supermarket located at 1167 Main Street,

[[Page 38747]]

Watertown, Connecticut; (11) its supermarket located at 266 East

Main Street, Clinton, Connecticut; (12) its supermarket located 60

Cantor Drive, Willimantic, Connecticut; (13) its supermarket located

at 245 Kane Street, West Hartford, Connecticut; and (14) its

supermarket located at 976 North Colony Road, Wallingford,

Connecticut. Shaw's Supermarkets, Inc., is a corporation with

headquarters at 140 Laurel Street, East Bridgewater, Massachusetts.

Under the terms of the proposed order, Ahold must also divest to

Big Y Foods, Inc. (1) its supermarket located at 830 Boston Post

Road, Guilford, Connecticut; (2) its supermarket located at 650

Memorial Drive, Chicopee, Massachusetts; (3) its supermarket located

at West Main Route 44, Avon, Connecticut; (4) its supermarket

located at 3 Kent Road, New Milford, Connecticut; and (5) its

supermarket located at 265 Ellington Road, East Hartford,

Connecticut. Big Y Foods, Inc., is a corporation with headquarters

at 280 Chestnut Street, Springfield, Massachusetts.

The purpose of the divestitures to these purchasers is to ensure

the continuation of the Assets to be Divested as ongoing viable

enterprises engaged in the supermarket business and to remedy any

lessening of competition resulting from the acquisition as alleged

in the Commission's complaint.

Star, Bozzuto's, Shaw's, and Big Y already own and operate

supermarkets. The management of each company has substantial

experience in the supermarket business. Star and Bozzuto's do not

operate supermarkets in the areas where the stores they are buying

are located. Big Y and Shaw's operate, or will shortly, in a few of

the markets where they are buying divested supermarkets. In these

markets, however, Big Y and Shaw's are not now significant

competitors, and the additional stores will make them more

competitive against the combined Ahold/Stop & Shop.

Under the terms of the proposed order, Ahold must divest the

assets to be divested within thirty (30) days after the proposed

Order is made final by the Commission. Because the proposed order

contemplates divestiture within 30 days to purchasers that have

already been identified to the Commission, and because the proposed

order includes a strong trustee provision and an Asset Maintenance

Agreement, the Commission has not required a hold separate agreement

in this case. Under the proposed order, if any of the divestitures

are not accomplished within 30 days after the order is made final,

then the Commission may appoint a trustee to divest the remaining

assets. The trustee may, on his or her own initiative or at the

direction of the Commission (and subject to Commission approval

after a 30-day public comment period), add or substitute

supermarkets in the overlap areas listed in the order so as to

accomplish the required divestitures. This provision is important to

insure that the divestitures will be made. Ahold is unlikely to

permit the deterioration of any of the supermarkets to be divested,

because to do so could ultimately invite a divestiture trustee to

make a substitution, leaving Ahold with a store that had been

allowed to deteriorate. The fact that the trustee provision can be

invoked quickly, i.e., within 30 days, also gives Ahold an incentive

to complete the divestitures in a timely manner.

The purpose of this analysis is to invite public comment

concerning the proposed order. This analysis is not intended to

constitute an official interpretation of the agreement and order or

to modify their terms in any way.

Donald S. Clark,

Secretary.

[FR Doc. 96-18857 Filed 7-24-96; 8:45 am]

BILLING CODE 6750-01-P