Part III Administrative Complaint
On January 25, 2008 the U.S. Court of Appeals for the Fifth Circuit upheld a Commission order requiring Chicago Bridge & Iron Co., N.V. and its United States subsidiary (“CB&I”) to divest assets acquired from Pitt-Des Moines, Inc. used in the business of designing, engineering and building field-erected cryogenic storage tanks. In its 2005 order, the Commission had ruled that CB&I’s acquisition of these assets in 2001, during a pending FTC investigation, would likely result in a substantial lessening of competition or tend to create a monopoly in four markets for industrial storage tanks in the Untied States, in violation of Section 7 of the Clayton Act and Section 5 of the FTC Act. The court endorsed the Commission’s findings, based on an extensive review of many years of bidding data, that the merged firms controlled over 70 percent of the market, and that new entry was unlikely given the high entry barriers based on the incumbents’ reputation and control of skilled crews On January 7, 2005 the Commission upheld in part the ruling of an administrative law judge that Chicago Bridge & Iron’s acquisition of the Water Division and the Engineered Construction Division of Pitt-Des Moines, Inc. created a near-monopoly in four separate markets involving the design and construction of various types of field-erected specialty industrial storage tanks in the United States. In an effort to restore competition as it existed prior to the merger, the Commission ordered Chicago Bridge to reorganize the relevant product business into two separate, stand-alone, viable entities capable of competing in the markets described in the complaint and to divest one of those entities within six months. On June 27, 2004, an administrative law judge upheld the complaint and ordered the divestiture all of the assets acquired in the acquisition. In December 2004, the Commission approved an interim consent order prohibiting Chicago Bridge & Iron from altering the assets acquired from Pitt-Des Moines, Inc. except “in the ordinary course of business.” These assets included but were not limited to real property; personal property; equipment; inventories; and intellectual property. In an administrative complaint issued on October 25, 2001, the Commission challenged the February 2001 purchase of the Water Division and Engineered Construction Division of Pitt-Des Moines, Inc. alleging that the acquisition significantly reduced competition in four separate markets involving the design and construction of various types of field-erected specialty industrial storage tanks in the United States. The initial decision filed June 27, 2003 upheld the complaint.