RHI AG/Global Industrial Technologies, Incorporated

Modified consent agreement given final approval, close of investigation and response to public commenters:

For Your Information

Following a public comment period, the Commission has made final a modified consent order in RHI AG/Global Industrial Technologies, Incorporated, issued a letter closing the investigation and responded to one public comment. The FTC had accepted a consent agreement and proposed decision and order for public comment in this matter on December 30, 1999. The modifications in the consent order approved by the Commission have been agreed to by RHI and will become final when the company has been served with the order.

As explained in a letter from the Commission's Acting Director of the Bureau of Competition to counsel representing RHI, FTC staff closely monitored RHI's compliance with the terms of the proposed decision and order in the period following its acceptance for public comment. The proposed order required RHI to divest certain assets to Resco Products, Inc. ("Resco") pursuant to divestiture contracts entered into by the two companies. The Commission also appointed an interim trustee to monitor RHI's compliance with the proposed decision and order, as well as with the divestiture contracts.

RHI divested assets to Resco on March 3, 2000. Soon after, however, disputes arose between RHI, Resco and FTC staff regarding RHI's compliance with the terms of both the proposed order and the divestiture contracts. Information received from the interim trustee, as well as other sources, indicated that RHI had failed to comply completely with some of its divestiture obligations.

RHI and Resco were encouraged to settle their disputes, and a settlement was reached in October 2000, under which RHI would perform certain additional obligations to Resco and pay Resco $5 million. This relief should restore Resco's competitive position to what it would have been if RHI had fully met its obligations under the proposed decision and order and original divestiture contracts. RHI also consented to modify the proposed decision and order to, among other things, incorporate the settlement agreement with Resco into the final order. Accordingly, any future violation of the settlement agreement, or other parts of the divestiture agreement as defined, will constitute a failure to comply with the order.

Based in part upon RHI's settlement with Resco and cooperation with the Commission's staff and the interim trustee, the investigation has now been closed. The Commission reserves the right to take further action in this matter, however, if it determines that such action is in the public interest.

The Commission vote to finalize the modified consent agreement, close the investigation and respond to public commenters was 5-0. (FTC File No. 991-0281; staff contact is Daniel Ducore, Bureau of Competition, 202-326-2526; see press release dated December 30, 1999.)

Copies of the documents mentioned in this release are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form. The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.

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