FYI: The Atlantic Richfield Co. (ARCO) has Petitioned FTC to Reopen and Modify a 1990 Consent Order...

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The Atlantic Richfield Co. (ARCO) has petitioned the Federal Trade Commission to reopen and modify a 1990 consent order by deleting a provision that requires ARCO to obtain FTC approval before acquiring any interest or assets in any company that produces urethane polyether polyol (UPP), propylene glycol (PG) or propylene oxide (PO). The order stems from ARCO's acquisition of certain chemical assets from the Union Carbide Corp. (UCC). ARCO makes the request pursuant to the Commission's prior-approval policy under which the Commission said that with certain exceptions, it no longer will routinely include prior approval provisions in orders stemming from merger cases and that it presumes that the public interest requires opening such provisions in outstanding mergers and making them consistent with the policy.

The FTC had charged that the acquisition could substantially reduce potential competition in the manufacture of propylene oxide (PO), the basic feedstock for UPP and PG production. There are only two U.S. producers of PO, ARCO and Dow. The complaint further alleged that the acquisition prevented the likely entry of a third PO producer, and could substantially reduce actual horizontal competition in the manufacture and sale of UPP and PG. UPP is the major raw material for polyurethanes, which are used for such applications as flexible foam (cushions) and rigid foam (picnic coolers). PG is used in a variety of applications, including fiberglass, cellophane, paints, anti-freeze, foods, drugs, and cosmetics.

Under the consent agreement, ARCO agreed to divest all of the PG assets it acquired from UCC, including a PG production facility at a Union Carbide plant site. It must also divest the UPP assets that it acquired from Texaco in 1987. The order further requires that ARCO, for ten years, obtain prior FTC approval before acquiring any interest or assets in any company engaged in the production of urethane polyether polyol, propylene glycol, or propylene oxide.

ARCO is based in Los Angeles . ARCO's petition will be subject to public comment for 30 days, until Nov 30. Comments should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

Copies of the petition, as well as other documents associated with this case are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov

(FTC Docket No. C-3314)

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