Legal Library: Cases and Proceedings

Under terms of a final consent order settling charges stemming from the merger of SmithKline and Glaxo Wellcome plc, the parties agreed to divest pharmaceutical products in six markets: antiemetics; the antibiotic, ceftazidime; oral and intravenous antiviral drugs for the treatment of herpes; topical antiviral drugs for the treatment of genital herpes; and over-the-counter H-2 blocker acid relief products.

The consent order permits the merger of Novartis and AstraZeneca PLC into a new Swiss company, Syngenta AG. The order requires Novartis to divest its worldwide foliar fungicide business (based on the strobilurin chemical class) to Bayer Ag; and requires AstraZeneca to divest its worldwide com herbicide business (based on the active ingredient acetochlor) to Dow AgroSciences LLC.

The Commission authorized staff to file a motion in federal district court to prevent the merger of BP Amoco p.1.c. and Atlantic Richfield Company. The complaint, filed in the U.S. District Court for the Northern District of California, alleged that the merger would reduce competition in the exploration and production of Alaska North Slope crude oil and its sale to West Coast refineries, and in the market for pipeline and storage facilities in Cushing, Oklahoma. Under the terms of the order, BP Amoco was required to divest all of ARCO's assets relating to oil production on Alaska's North Slope (ANS) to Phillips Petroleum Company or another Commission-approved purchaser. BP Amoco also would have to divest all ARCO assets related to its Cushing, Oklahoma crude oil business within four months.

Abbott and Geneva Pharmaceuticals settled charges that the two firms entered into an illegal agreement to stop the marketing and development of a competing generic drug. According to the complaint, Abbott, manufacturer of Hytrin – the brand name for terazosin HCL, a prescription drug used to treat hypertension and benign prostatic hyperplasia, entered into an agreement with Geneva Pharmaceuticals whereby Abbott would pay Geneva millions of dollars not to market a generic version of Hytrin. The orders bars Abbott and Geneva, among other things, from entering into agreements in which a generic company agrees with a manufacturer of a branded drug to delay or stop the production of a competing drug.

Rhodia divested certain assets to resolve antitrust concerns stemming from its acquisition of Allbright & Wilson PLC. The consent order permits the acquisition but requires the divestiture of Albright’s interest in its United States phosphoric acid joint venture to its joint venture partner, Potash Corporation of Saskatchewan.

The FTC accepted a consent agreement that allowed Reckitt & Colman plc to acquire all of the voting securities of Benckiser N.V. from NRV Vermogenswerwaltung GmbH, while ensuring that competition in two highly concentrated household cleaning product markets is maintained. According to the complaint, the markets for hard surface bathroom cleaners and fine fabric wash products are highly concentrated, and the proposed acquisition was likely to substantially increase the concentration in each market. Under the agreement, Benckiser's Scrub Free® and Delicare® businesses would be divested to Church & Dwight, Inc., which also produces household cleaning products, selling items under the Arm & Hammer® brand name.

Consent order, resolving antitrust concerns relating to Zeneca's merger with Astra AB requires the divestiture of all assets relating to levobupivacaine, a long-acting local anesthetic. The assets were sold to Chiroscience Group plc, the developer of levobupivacaine.

Consent order in BP Amoco p.1.c. (created by the merger of British Petroleum Company, p.1.c. and Amoco Corporation) requires the divestiture of 134 gas stations in eight markets and nine Light petroleum products terminals settling charges that the merger would substantially reduce competition in certain wholesale gasoline markets.

Federal-Mogul, one of the world's leading producers of thinwall bearings used in car, truck and heavy equipment engines, agreed to divest the thinwall bearings assets it acquired in its $2.4 billion takeover of T&N, plc. to settle FTC charges that the acquisition would likely substantially reduce competition in the worldwide market for thinwall bearings. According to the FTC, Federal-Mogul and T&N, headquartered in Manchester, England, have a combined market share in the United States of nearly 80 percent or more in each of the four markets identified in the complaint. The FTC consent order requiree Federal-Mogul to divest the thinwall bearings business of T&N, which includes the assets and plants that T&N uses to make thinwall bearings, as well as intellectual property that T&N uses to develop and design new bearings to meet the needs of engines that OEMs will develop in the future. To ensure that the divested thinwall bearings business would be in the same position that T&N had been in terms of research, the proposed order identifies individuals in T&N who worked on bearings research and development, and requires Federal-Mogul and T&N to assign those personnel to the businesses to be divested.

The Commission withdrew a proposed consent agreement that settled allegations that PacifiCorp's proposed acquisition of The Energy Group PLC would lead to increases in wholesale and retail electricity prices in the United States. During the comment period PacificCorp withdrew its bid after the Texas Utilities Company announced a competing tender offer for The Energy Group.

The complaint accompanying the proposed consent order alleged that the merger between Guinness and Grand Metropolitan PLC would eliminate substantial competition between the two firms in the sale and distribution of premium Scotch and premium gin in the U.S. The order requires the divestiture of Dewar's Scotch, Bombay gin, and Bombay Sapphire gin brands worldwide to acquirers pre-approved by the Commission.

Dow agreed to settle allegations that its acquisition of Sentrachem Limited would have substantially lessened competition for the research and manufacture of chelating agents (chemicals used in cleaners, pulp and paper, water treatment, photography, agriculture, food and pharmaceuticals to neutralize and inactivate metal ions) by combining two of the three U.S. producers of the product. The terms of the consent order require Dow to divest Sentrachem's U.S. chelant business to Akzo Novel N.V.