The Associated Octel Company Limited has agreed to settle Federal Trade Commission charges that its acquisition of Oboadler Company Limited could lessen competition and raise prices of lead antiknock compounds in violation of federal anitrust laws. To settle the FTC charges, Octel will enter a long-term agreement with Oboadler's current U.S. distributor to supply the distributor's requirements for lead antiknock compounds for resale in the United States.
"This settlement will maintain competitive prices and protect U.S. consumers of antiknock compounds," said William J. Baer, Director of the FTC's Bureau of Competition.
Octel develops, manufactures and markets specialty chemicals and performance chemicals including lead antiknock compounds. It is based in London, England. Oboadler controls three operating companies that manufacture and sell lead antiknock compounds: Alcor Chemie AG, Alcor Chemie Vertriebs AG and Novoktan GmbH. It is headquartered in Doberitz, Germany.
Worldwide use of lead antiknock compounds has declined substantially since the early 1970s, driven by public health concerns. Lead antiknock compounds are added to aviation fuel for piston engine airplanes and to certain gasoline used in racing cars in the United States.
According to the complaint detailing the charges, the market for the manufacture and sale of lead antiknock compounds is highly concentrated, and Octel and Oboadler are two of only three firms in the world that manufacture them. With the decline in worldwide demand for the product, entry into the market would not be timely, likely or sufficient to deter the adverse competitive effects of the acquisition of Oboadler by Octel. The acquisition could substantially lessen competition, eliminate direct competition, increase the likelihood of coordinated interaction between the remaining competitors and drive up prices, in violation of the antitrust laws, the complaint says.
To settle the FTC charges, Octel has entered a long-term supply agreement with Allchem Industries Inc., Oboadler's U.S. distributor, to provide Allchem's requirements for lead antiknock compounds for resale in the United States. Allchem will have the sole right to determine the customers to whom it will resell the product and the terms and conditions of resale. The consent order requires that Octel supply the product to Allchem for 15 years and prohibits modification of the core provisions of the agreement without prior Commission approval.
The Commission vote to approve the proposed settlement was 4-0. A summary of the settlement will be printed in the Federal Register shortly and will be subject to a 30-day public comment period.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
Copies of the complaint and consent agreement 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; toll-free 877-FTC-HELP (877-382-4357); TDD 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.
Claudia Bourne Farrell
Office of Public Affairs
William J. Baer
Bureau of Competition
(FTC File No. 991-0288)