Global Industrial Technologies, Inc.; Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 981-0173]

Global Industrial Technologies, Inc.; Analysis to Aid Public

Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged

violations of federal law prohibiting unfair or deceptive acts or

practices or unfair methods of competition. The attached Analysis to

Aid Public Comment describes both the allegations in the draft

complaint that accompanies the consent agreement and the terms of the

consent order--embodied in the consent agreement--that would settle

these allegations.

DATES: Comments must be received on or before September 8, 1998.

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: Joseph Krauss, FTC/H-383, Washington,

D.C. 20580. (202) 326-2713.

SUPPLEMENTARY INFORMATION: Pusuant 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 above-captioned 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. The following Analysis to Aid Public

Comment describes the terms of the consent agreement, and the

allegations in the complaint. An electronic copy of the full text of

the consent agreement package can be obtained from the FTC Home Page

(for June 26, 1998), on the World Wide Web, at ``http://www.ftc.gov/os/

actions97.htm.'' A paper copy can be obtained from the FTC Public

Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, N.W.,

Washington, D.C. 20580, either in person or by calling (202)326-3627.

Public comment is invited. Such commenters 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)).

Analysis of Proposed Consent Order To Aid Public Comment

The Federal Trade Commission (``Commission'') has accepted, subject

to final approval, an Agreement Containing Consent Order

(``Agreement'') from Global Industrial Technologies, Inc. (``proposed

respondent'').

The proposed Order has been placed on the public record for sixty

(60) days for reception of comments by interested persons. Comments

received during this period will become part of the public record.

After sixty (60) 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 proposed Order.

The Commission's investigation of this matter concerns the proposed

acquisition by Global of all of the outstanding shares of AP Green

Industries, Inc. (``AP Green'') through a cash tender offer. Global and

AP Green are two leading U.S. manufacturers of refractories.

Refractories are heat-resistant materials used to line furnaces in

industries that involve the heating or containment of solids, liquids,

or gases at high temperatures. The Commission's proposed complaint

alleges that Global and AP Green compete with each other in the United

States market for glass-furnace silica refractories. Glass-furnace

silica refractories are used in the glass industry to build the roofs

and other portions of glass-melting furnaces.

The Agreement Containing Consent Order would, if finally accepted

by the Commission, settle charges that the acquisition may

substantially lessen competition in the production and sale of glass-

furnace silica refractories in the United States and lead to a monopoly

in that line of commerce. The Commission has reason to believe that the

acquisition agreement violates Section 5 of the Federal Trade

Commission Act and the acquisition would have anticompetitive effects

and would violate Section 7 of the Clayton Act and Section 5 of the

Federal Trade Commission Act if consummated, unless an effective remedy

eliminates such anticompetitive effects.

The Commission's Complaint alleges that glass-furnace silica

refractories provide unique characteristics, and that as a result, the

use of these materials would not be diminished by even a large price

increase. The Complaint further alleges that imports of glass-furnace

silica refractories are small.

[[Page 36694]]

Global and AP Green are the only two producers of glass-furnace silica

refractories in the United States, and entry of other producers is

unlikely and would be time consuming. The Commission's Complaint

alleges that the proposed acquisition, which would result in a monopoly

in the United States, would lessen competition by eliminating

competition between Global and AP Green, and would lead to higher

prices and less product innovation.

The proposed Order accepted for public comment contains provisions

that would require Global to divest AP Green's glass-furnace silica

refractories business to Robert R. Worthen and Dennis R. Williams

(jointly or through a corporation called Utah Refractories Corp.) in a

manner that receives the prior approval of the Commission within 30

days of the date the proposed Order was accepted for public comment, or

if such divestiture fails, to another buyer that receives the prior

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

of the Commission within 90 days of the date the proposed Order was

accepted for public comment. The divestiture includes the AP Green

manufacturing plant located in Lehi, Utah, where AP Green produces

silica refractories, together with the sources of raw materials used to

manufacture silica refractories and all other assets relating to the

research, development, production, sale, or distribution of silica

refractories, but excluding AP Green's manufacturing facility in

Sproul, Pennsylvania. Global's divestiture of the AP Green silica

refractories business, if completed, would satisfy the requirements of

the Order and remedy the lessening of competition alleged in the

Complaint.

If Global fails to divest AP Green's silica refractories business

within 90 days of the date the proposed Order was accepted for public

comment, then the Commission may appoint a trustee to divest AP Green's

silica refractories business, or, at the option of the trustee,

Global's Northeast, Maryland manufacturing plant, where Global produces

silica refractories, together with the sources of raw materials used to

manufacture silica refractories and all other assets relating to the

research, development, production, sale, or distribution of silica

refractories, but excluding Global's manufacturing facility in Calhoun,

Georgia.

The Order also contains a provision requiring Global to maintain

the viability and marketability of the Global and AP Green silica

refractories businesses pending the divestiture.

The consent is crafted to preserve the current competitive state of

the U.S. market for glass-furnace silica refractories. The consent will

maintain the AP Green silica plant as an independent supplier of glass-

furnace silica refractories for U.S. customers. Thus, there will

continue to be two domestic sources of the product, as there were prior

to the proposed merger.

The purpose of this analysis is to facilitate public comment on the

proposed Order. Comments should also be directed to whether the pre-

approved buyers, Robert R. Worthen and Dennis R. Williams and their

corporation, Utah Refractories Corp., will be financially viable and

able to replace the competition lost by this acquisition. This analysis

is not intended to constitute an official interpretation of the

Agreement or the proposed Order or in any way to modify the terms of

the Agreement or the proposed Order.

Benjamin I. Berman,

Acting Secretary.

[FR Doc. 98-17933 Filed 7-6-98; 8:45 am]

BILLING CODE 6750-01-M