001 0040

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

AIRGAS, INC., a corporation.

Docket No. C-4029

COMPLAINT

The Federal Trade Commission ("Commission"), having reason to believe that Respondent, Airgas, Inc. ("Airgas"), a corporation subject to the jurisdiction of the Commission, has acquired 100 percent of the Puritan Bennett Medical Gas Business ("the Acquisition") from Mallinckrodt, Inc. ("Mallinckrodt"), a corporation subject to the jurisdiction of the Commission, 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, 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. RESPONDENT

1. Respondent Airgas is a corporation organized, existing, and doing business under and by virtue of the laws of Delaware with its office and principal place of business located at 259 North Radnor-Chester Road, Suite 100, Radnor, Pennsylvania 19087.

2. Respondent is engaged in, among other things, the production and distribution of nitrous oxide.

3. Respondent is, and at all times relevant herein has been, engaged in commerce as "commerce" is defined in Section 1 of the Clayton Act, as amended, 15 U.S.C.  12, and is a corporation 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 ACQUIRED COMPANY

4. Mallinckrodt was a corporation organized, existing, and doing business at the time of the Acquisition under and by virtue of the laws of New York, with its office and principal place of business located at 675 McDonnell Boulevard, St. Louis, Missouri 63134.

5. Puritan Bennett, a subsidiary of Mallinckrodt, was, until the time of its acquisition by Respondent, engaged in, among other things, the business of providing nitrous oxide and other medical gases to a broad spectrum of consumers.

6. Mallinckrodt was at all times relevant herein engaged in commerce as "commerce" is defined in Section 1 of the Clayton Act, as amended, 15 U.S.C.  12, and is a corporation 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.

III. THE ACQUISITION

7. On January 21, 2000, Respondent Airgas acquired substantially all of the assets of the Puritan Bennett Medical Gas Business, including all of the assets related to its nitrous oxide business, from Mallinckrodt for approximately $90 million.

IV. THE RELEVANT MARKET

8. For purposes of this Complaint, the relevant line of commerce in which to analyze the effects of the Acquisition is the production and sale of nitrous oxide.

9. For purposes of this Complaint, the United States and Canada constitute the relevant geographic area in which to analyze the effects of the Acquisition in the relevant line of commerce.

V. STRUCTURE OF THE MARKET

10. As a consequence of the Acquisition of the Puritan Bennett Medical Gas Business by Airgas, the market for the production and sale of nitrous oxide is a monopoly. At the time of its acquisition, the Puritan Bennett Medical Gas Business was Airgas's only competitor in the production and sale of nitrous oxide.

VI. BARRIERS TO ENTRY

11. Entry into the relevant market identified in Paragraphs 8 and 9 is difficult, costly and unlikely to occur in a timely manner to deter or counteract the adverse competitive effects described in Paragraph 12 because of, among other things, the time needed to build a nitrous oxide production plant and delivery infrastructure and because the expense necessary to acquire a feed source, construct a nitrous oxide production facility, develop a distribution and delivery infrastructure and gain customer acceptance is quite high relative to the size of the market.

VII. EFFECTS OF THE ACQUISITION

12. The acquisition has substantially lessened or may substantially lessen competition and has created a monopoly in the relevant market 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, by:

(a) increasing the likelihood that customers requiring nitrous oxide will pay higher prices;
 
(b) eliminating actual, direct, and substantial competition in the relevant market between Airgas and the Puritan Bennett Medical Gas Business, both of which had the ability and incentive to compete on price; and
 
(c) increasing the likelihood of unilateral anticompetitive effects in the relevant markets.

VIII. VIOLATIONS CHARGED

13. The Acquisition described in Paragraph 7 constitutes 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 twelfth day of December, 2001, issues its Complaint against said Respondent.

By the Commission.

Donald S. Clark
Secretary

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