001 0186

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

Metso Oyj, a corporation, and Svedala Industri AB, a corporation.

Docket No. C-4024

COMPLAINT

The Federal Trade Commission ("Commission"), having reason to believe that Respondents Metso Oyj ("Metso"), a corporation subject to the jurisdiction of the Commission, and Svedala Industri AB ("Svedala"), a corporation subject to the jurisdiction of the Commission, have entered into an agreement whereby Metso would acquire all of the issued and outstanding securities and convertible debentures of Svedala in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act ("FTC Act"), as amended, 15 U.S.C. § 45, and it appearing to the Commission that a proceeding in respect thereof would be in the public interest, hereby issues its Complaint, stating its charges as follows:

I. RESPONDENTS

1. Respondent Metso is a corporation organized, existing and doing business under and by virtue of the laws of Finland, with its office and principal place of business located at Fabianinkatu 9 A, P.O. Box 1220, FIN-00101, Helsinki, Finland. Metso's principal subsidiary in the United States is located at 133 Federal Street, Suite 302, Boston, MA 02110.
 
2. Respondent Svedala is a corporation organized, existing and doing business under and by virtue of the laws of Sweden, with its office and principal place of business located at Kaptensgatan 1, Box 4004, SE-203, 11 Malmö, Sweden. Svedala's principal subsidiary in the United States is located at 20965 Crossroads Circle, Waukesha, WI 53186.
 
3. Respondent Metso, through its Metso Minerals subsidiary (formerly known as Nordberg), and Respondent Svedala are engaged in, among other things, the research, development, manufacture and sale of rock and mineral processing equipment, including but not limited to cone crushers, jaw crushers, primary gyratory crushers and grinding mills.
 
4. Respondents are, and at all times herein have been, engaged in commerce, as "commerce" is defined in Section 1 of the Clayton Act as amended, 15 U.S.C. § 12, and are corporations whose business is in or affects commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 44.

II. THE PROPOSED ACQUISITION

5. On June 21, 2000, Metso announced a cash tender offer to acquire all of the issued and outstanding shares and convertible debentures of Svedala ("Acquisition"). The transaction is valued at approximately $1.6 billion.

III. THE RELEVANT MARKETS

6. For the purposes of this Complaint, the relevant lines of commerce in which to analyze the effects of the Acquisition are:
 
a. the research, development, manufacture and sale of cone crushers;
 
b. the research, development, manufacture and sale of jaw crushers;
 
c. the research, development, manufacture and sale of primary gyratory crushers; and
 
d. the research, development, manufacture and sale of grinding mills.
 
7. For the purposes of this Complaint, the world is the relevant geographic area in which to analyze the effects of the Acquisition in the relevant lines of commerce.

IV. THE STRUCTURE OF THE MARKETS

8. The market for the research, development, manufacture and sale of cone crushers is highly concentrated whether measured by the Herfindahl-Hirschman Index ("HHI") or by concentration ratios. Metso and Svedala are the two leading suppliers of cone crushers in the world.
 
9. The market for the research, development, manufacture and sale of jaw crushers is highly concentrated whether measured by the HHI or by concentration ratios. Metso and Svedala are the two leading suppliers of jaw crushers in the world.
 
10. The market for the research, development, manufacture and sale of primary gyratory crushers is highly concentrated whether measured by the HHI or by concentration ratios. Metso and Svedala are two of the leading suppliers of primary gyratory crushers in the world.
 
11. The market for the research, development, manufacture and sale of grinding mills is highly concentrated whether measured by the HHI or by concentration ratios. Metso and Svedala are two of the leading suppliers of grinding mills in the world.
 
12. Metso and Svedala are actual competitors in each of the relevant markets for the research, development, manufacture and sale of cone crushers, jaw crushers, primary gyratory crushers and grinding mills.

V. ENTRY CONDITIONS

13. Entry into each of the relevant markets identified in Paragraphs 6 and 7 is unlikely and would not occur in a timely manner to deter or counteract the adverse competitive effects described in Paragraph 14, because of, among other things, the time and expense necessary to develop new rock processing equipment and gain customer acceptance for the equipment.

VI. EFFECTS OF THE ACQUISITION

14. The effects of the Acquisition, if consummated, may be to substantially lessen competition and to tend to create a monopoly in the relevant markets in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45, in the following ways, among others:
 
a. by eliminating actual, direct, and substantial competition between Metso and Svedala in each of the relevant markets;
 
b. by increasing the likelihood that Metso will unilaterally exercise market power in each of the relevant markets;
 
c. by increasing the likelihood of coordinated interaction in each of the relevant markets; and
 
d. by increasing the likelihood that customers of cone crushers, jaw crushers, primary gyratory crushers and grinding mills would be forced to pay higher prices.

VII. VIOLATIONS CHARGED

15. The cash tender offer described in Paragraph 5 constitutes a violation of Section 5 of the FTC Act, as amended, 15 U.S.C. § 45.
 
16. The Acquisition described in Paragraph 5, if consummated, would constitute a violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45.

WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade Commission on this seventh day of September, 2001, issues its Complaint against said Respondents.

By the Commission, Chairman Muris not participating.

Donald S. Clark
Secretary