Tag: Manufacturing

Emerson Electric Co. agreed to sell the switchbox business of Pentair plc to Stamford, Conn.-based Crane Co. in order to settle charges that Emerson’s proposed $3.15 billion acquisition of Pentair would violate federal antitrust law. Emerson and Pentair are manufacturers of industrial valves and control products, including switchboxes, which are widely used in the oil and gas, chemical, petrochemical, power, and other industries. Switchboxes perform a critical safety function, so brand reputation and product reliability are very important to customers. Emerson’s TopWorx and Pentair’s Westlock switchboxes are the most widely-used brands nationwide and, for many customers, the only acceptable brands of switchboxes. Under the FTC order, Emerson must divest Westlock Controls Corporation, the Pentair subsidiary that designs, manufactures, and sells switchboxes, to Crane Co. The order requires Emerson to provide Crane all of Westlock’s production facilities, intellectual property, confidential business information, and the opportunity to hire Westlock employees.

China National Chemical Corporation (ChemChina) and Swiss global agricultural company Syngenta AG agreed to divest three types of pesticides to settle FTC charges that their proposed merger would harm competition in the U.S. markets for three pesticides: (1) the herbicide paraquat, which is used to clear fields prior to the growing season; (2) the insecticide abamectin, which protects primarily citrus and tree nut crops by killing mites, psyllid, and leafminers; and (3) the fungicide chlorothalonil, which is used mainly to protect peanuts and potatoes. According to the complaint, Syngenta owns the branded version of each of the three products at issue, giving it significant market shares in the United States. ChemChina subsidiary ADAMA focuses on generic pesticides and is either the first- or second-largest generic supplier in the United States for each of these products. The complaint alleges that without the proposed divestiture, the merger would eliminate the direct competition that exists today between ChemChina generics subsidiary ADAMA and Syngenta’s branded products, increasing the likelihood that U.S. customers buying paraquat, abamectin, and chlorothalonil would be forced to pay higher prices or accept reduced service for these products. The Commission's order requires ChemChina to sell all rights and assets of ADAMA’s U.S. paraquat, abamectin and chlorothalonil crop protection businesses to California-based agrochemical company AMVAC.

American Air Liquide Holdings, Inc. and Airgas, Inc., agreed to divest certain production and distribution assets to settle charges that their proposed $13.4 billion merger likely would have harmed competition and led to higher prices in several U.S. and regional markets. The companies will sell assets used to produce and supply seven types of industrial gas: bulk oxygen, bulk nitrogen, bulk argon, bulk nitrous oxide, bulk liquid carbon dioxide, dry ice, and packaged welding gases sold in retail stores. These gases are used in a number of industries, including oil and gas, steelmaking, health care, and food manufacturing, according to the complaint. Under the proposed settlement order, Air Liquide will sell these assets to a Commission-approved buyer within four months after it acquires Airgas. The proposed consent agreement includes an asset maintenance order to ensure that Air Liquide and Airgas continue to act independently and maintain the relevant assets until they are divested.

German cement producer HeidelbergCement AG and Italian producer Italcementi S.p.A. agreed to divest a cement plant in Martinsburg, WV and up to 11 cement distribution terminals in six other states to settle charges that their proposed $4.2 billion merger would likely harm competition in five regional markets for cement in the United States. Heidelberg and Italcementi are the second and fourth largest producers of cement in the world, and in the United States, the two companies compete through their respective U.S. subsidiaries, Lehigh Hanson and Essroc Cement Corp., to sell portland cement – an essential ingredient in making concrete. According to the FTC complaint, the merger as proposed would harm competition for portland cement in five metropolitan areas: Baltimore-Washington, DC; Richmond, Virginia; Virginia Beach-Norfolk-Newport News, Virginia; Syracuse, New York; and Indianapolis, Indiana. In each of these markets, the FTC alleges the merger as originally proposed would have reduced the number of competitively significant suppliers from three to two. The proposed consent agreement requires the merged company to divest to an FTC-approved buyer an Essroc cement plant and quarry in Martinsburg, West Virginia; seven Essroc terminals in Maryland, Virginia and Pennsylvania; and a Lehigh terminal in Solvay, New York. At the buyer’s option, the order also requires the merged company to divest two additional Essroc terminals in Ohio. Under the proposed order, these divestitures must occur within 120 days after the merger is complete. In addition, the merged company has ten days after the merger is complete to divest Essroc’s terminal in Indianapolis to Cemex, Inc.

ON Semiconductor Corporation agreed to sell its Ignition IGBT business in order to settle charges that its proposed $2.4 billion acquisition of Fairchild Semiconductor International, Inc. would likely substantially lessen competition in the worldwide market for Ignition IGBTs, resulting in higher prices and reduced innovation. Ignition IGBTs are semiconductors that function as solid-state electronic switches in the ignition systems of automotive internal combustion engines.  The order preserves competition by requiring ON to divest its Ignition IGBT business to Chicago-based manufacturer Littelfuse, Inc. The divestiture includes design files and intellectual property that Littelfuse needs to manufacture ON’s Ignition IGBTs. ON must also facilitate the transfer of its customer relationships to Littelfuse, and supply Ignition IGBTs for Littlefuse to sell to customers while Littelfuse sets up its manufacturing operations.

Fortiline, LLC, a company that distributes ductile iron pipe, fittings and accessories throughout much of the United States, agreed to  settle charges that it violated federal antitrust law by inviting a competitor to raise and fix prices. This is the first case where the FTC has challenged an invitation to collude by a firm that is both a direct competitor with, and a distributor for, the invitee. According to an administrative complaint filed by the FTC, on two occasions in 2010, Fortiline invited a competing firm, which mainly manufactures ductile iron pipe but also engaged in direct sales to contractors, to collude on pricing in North Carolina and most of Virginia. In some areas, Fortiline competes with this firm – identified in the complaint as “Manufacturer A” – by distributing ductile iron pipe (“DIP”) products made by another DIP manufacturer, identified as “Manufacturer B.” In other areas, Fortiline distributes the product of Manufacturer A. The FTC’s complaint alleges that on two occasions when Fortiline was competing with Manufacturer A, Fortiline communicated an invitation to collude on DIP pricing.The proposed consent order prohibits Fortiline from entering into, attempting to enter into, or inviting any agreement with any competitor to raise or fix prices, divide markets, or allocate customers.

Ball Corporation has agreed to sell to Ardagh Group S.A. eight U.S. aluminum can plants and associated assets in order to settle charges that its proposed $8.4 billion acquisition of Rexam PLC is likely anticompetitive. According to the complaint, the acquisition would eliminate direct competition in the United States between Ball and Rexam, which are the first and second largest manufacturers of aluminum beverage cans in both the United States and the world. The complaint alleges without a divestiture, it is likely that the proposed merger would substantially lessen competition for standard 12-ounce aluminum cans in three regional U.S. markets – the South and Southeast, the Midwest, and the West. The complaint also alleges that the proposed merger would substantially lessen competition for specialty aluminum cans nationwide. Ball and Rexam produce specialty aluminum cans that range in size from 7.5 ounces to 24 ounces, come in different shapes, and are used to market a wide variety of different products such as portioncontrolled drinks and energy drinks. Under the terms of the consent agreement, Ball and Rexam are required to divest eight aluminum can plants and related assets in the United States to Ardagh, one of the world’s largest producers of glass bottles for the beverage industry and metal cans for the food industry. Ardagh will acquire aluminum can body plants in Fairfield, Calif., Chicago, Ill., Whitehouse, Ohio, Fremont, Ohio, Winston-Salem, N.C., Bishopville, S.C., and Olive Branch, Miss., and Rexam’s aluminum can end plant located in Valparaiso, Ind.. Ardagh also will acquire Rexam’s U.S. headquarters in Chicago, Ill., and Rexam’s U.S. Technical Center in Elk Grove, Ill.

Invibio agreed to settle charges that it used long-term supply contracts to exclude rivals and maintain its monopoly in implant-grade polyetheretherketone, known as PEEK, which is sold to medical device makers. The FTC’s complaint alleges that two other companies,Solvay Specialty Polymers LLC and Evonik Corporation, later entered the implant-grade PEEK market, but Invibio’s anticompetitive tactics impeded them from effectively competing for customers. Through these exclusive contracting practices, the complaint alleges that Invibio has been able to maintain high prices for PEEK, despite entry from Solvay and Evonik; to prevent its customers from using more than one source of supply, despite their business preference to do so; and to impede Solvay and Evonik from developing into fully effective competitors. Under the consent order, Invibio, Inc. and Invibio Limited, along with their corporate parent, Victrex plc, are generally prohibited from entering into exclusive supply contracts and from preventing current customers from using an alternate source of PEEK in new products. In addition, the companies must allow current customers meeting certain conditions to modify existing contracts to eliminate the requirement that the customer purchase PEEK for existing products exclusively from Invibio.

The FTC filed an administrative complaint charging that the proposed $982 million merger of Canadian chemical suppliers Superior Plus Corp. and Canexus Corp. would violate the antitrust laws by significantly reducing competition in the North American market for sodium chlorate – a commodity chemical used to bleach wood pulp that is then processed into paper, tissue, diaper liners, and other products. Superior and Canexus are two of the three major producers of sodium chlorate in North America. If the merger takes place, the new company and rival AkzoNobel will control approximately 80 percent of the total sodium chlorate production capacity in North America.  By combining more than half of all North American sodium chlorate production capacity in the merged Superior and Canexus, the acquisition is likely to lead to anticompetitive reductions in output and higher prices, the complaint alleges. Additionally, by removing Canexus as an independent sodium chlorate producer, with its large scale and low-costs, the acquisition will also increase the likelihood of coordination in an already vulnerable market, according to the complaint.  The FTC also authorized staff to seek a temporary restraining order and a preliminary injunction in federal court to prevent the parties from consummating the merger and to maintain the status quo pending the administrative proceeding. The FTC and the Canadian Competition Bureau collaborated in this investigation.  On June 30, the parties abandoned their plans.