Legal Library: Cases and Proceedings

The consent order permitted Valero to complete its $6 billion merger with Ultramar Diamond Shamrock Corporation, but required the divestiture of Ultramar's Golden Eagle Refinery, bulk gasoline contracts, and 70 Ultramar retail service stations in Northern California to a Commission-approved acquirer. According to the complaint, the merger as originally proposed, would have lessened competition in two refining markets in California resulting in consumers paying more than $150million annually if the price of CARB gasoline increased just one cent per gallon. CARB gasoline meets the specifications of the California Air Resources Board.

The Commission authorized staff to seek a preliminary injunction to block DGF’s proposed acquisition of Leiner Davis Gelatin Corporation and its Goodman Fielder USA, Inc. subsidiary. According to the Commission this transaction, if allowed to proceed as planned, would increase the likelihood of anticompetitive activity in the U.S. market for pigskin and beef hide gelatin, used by the food industry as an ingredient in edible products and by the pharmaceutical industry to produce capsules and tablets. The combination of the two firms would account for more than 50 percent of the relevant market in the U.S. A proposed consent agreement designed to remedy the significant antitrust concerns was accepted for public comment March 7, 2002; the consent order was finalized April 17, 2002.

A consent order settled antitrust concerns stemming from Exxon's acquisition of Mobil Corporation, but requires the largest retail divestiture in Commission history. The divestitures, representing only a fraction of the worldwide assets of Exxon and Mobil, include 2,431 gas stations; an Exxon refinery in California; a pipeline; and other assets. According to the complaint, the proposed merger would injure competition in moderate concentrated markets -California gasoline refining, marketing and retail sales of gasoline in the Northeast, Mid-Atlantic and Texas; and in the highly concentrated markets for jet turbine oil.

Airgas, Inc., the nation's largest distributor of industrial, medical, and specialty gases, settled antitrust charges that its January 2000 acquisition of Mallinckrodt, Inc.'s Puritan Bennett Medical Gas Business eliminated competition in the North American market for the production and sale of nitrous oxide. Under terms of the order, Airgas is required to divest two nitrous oxide plants and related assets to Air Liquide America Corporation within 10 days after the Commission issues its final order. Nitrous oxide is a clear, odorless gas used mainly in dental and surgical procedures as an analgesic agent or as a supplement to anesthesia.

The Commission negotiated an agreement with The Hearst Corporation (Hearst) to settle a permanent injunction action filed by the FTC alleging that Hearst failed to provide documents required by premerger notification law and then consummated a merger that monopolized the integrated drug information database market. Under the terms of the order, Hearst divested the Medi-Span business to Lippincott Williams & Wilkins, Inc. , a subsidiary of Wolters Kluwer, n.v., disgorged $19 million in profits, and to complied with certain other obligations.

Metso settled charges that if its acquisition of Svedala Industries AB were allowed to proceed as planned, competition would be lessened in four rock processing equipment markets: primary gyratory crushers; jaw crushers; cone crushers; and grinding mills. The firms agreed to divest Metso's worldwide primary gyratory crusher and grinding mill businesses and Svedala's worldwide jaw crusher and cone crusher businesses. The three crusher businesses would be purchased by Sandvik AB, a Swedish corporation; the grinding mill business would be purchased by Outokumpu of Finland. Metso and Svedala are the two largest suppliers of rock processing equipment in the world.

Hearst and its subsidiary paid a $4 million civil penalty to settle charges that they failed to include required documents in the notification and report form file in 1998 for the proposed acquisition of Medi-Span International, Inc. The complaint alleged that the omitted documents hindered the antitrust agencies in their review and analysis of the proposed acquisition. The complaint, stipulation and final judgment were filed in U.S. District Court for the District of Columbia by Commission attorneys acting as special attorneys to the United States Attorney General. During fiscal year 2001, the Commission filed a related complaint for a permanent injunction alleging that Hearst and First DataBank created a monopoly through the acquisition of Medi-Span, First DataBank's only other competitor selling software and data detailing information for pharmaceutical prices, descriptions, dosages, and interactions. The Final Order and Stipulation requiring divestiture and disgorgement of profits was entered December 18, 2001.