FTC to Challenge Libbey's Acquisition of Anchor Hocking

The Federal Trade Commission has voted to seek a preliminary injunction to block Libbey, Inc.'s (Libbey) proposed $332 million acquisition of Anchor Hocking, (Anchor) a wholly-owned subsidiary of Newell Rubbermaid, Inc. Libbey is the largest maker and seller of soda-lime glassware to the U.S. food service industry, with more than half of all food service glassware sales. Anchor is the third-largest seller of food service glassware. According to the FTC, the acquisition, if consummated, would eliminate the existing substantial competition between Libbey and Anchor, and would substantially reduce competition in the market for soda-lime glassware sold to the food service industry in the United States. The FTC anticipates that it will file its motion for a preliminary injunction in U.S. District Court in Washington, D.C. no later than Friday, December 21, 2001.

"The market for food service soda-lime glassware is highly concentrated and would become even more so if this acquisition were to proceed," said Joseph J. Simons, Director of the FTC's Bureau of Competition. "The acquisition would combine the dominant firm in the market with its closest competitor."

Libbey is a Delaware corporation with its principal place of business in Toledo, Ohio. Newell Rubbermaid, Inc., also a Delaware corporation, has its principal place of business in Freeport, Illinois. Anchor Hocking is based in Lancaster, Ohio.

Libbey produces and sells soda-lime glassware, a line of products that includes many different styles of tumblers and stemware for beverages, and other products ranging from serving platters to candle holders. Libbey produces and sells soda-lime glassware, among other segments, to food service customers, including distributors who resell soda-lime glassware to restaurants, hotels, and other food service establishments. Anchor is the third-largest maker and seller of soda-lime glassware to the U.S. food service industry.

According to the FTC, Libbey and Anchor are direct and actual competitors in the sale of soda-lime glassware to the food service industry. They compete with each other on price by, among other things, offering discounts and other promotions on the sale of their soda-lime glassware. Anchor prices and discounts its products in response to Libbey's pricing, and in order to take sales from Libbey. Anchor has succeeded in taking food service glassware sales from Libbey by offering lower prices to food service customers and distributors.

The FTC's complaint will allege that, if consummated, the acquisition would combine the largest and third-largest sellers of soda-lime glassware to the food service industry in the United States, substantially increasing concentration in the market for soda-lime glassware for the food service industry in the U.S. Further, the FTC will allege that the acquisition would result in a highly concentrated market and would eliminate the existing substantial competition between Libbey and Anchor. In addition, the complaint will allege that the acquisition would substantially reduce competition and tend to create a monopoly in the market for soda-lime glassware for the food service industry in the United States.

Finally, the complaint will charge that the reestablishment of Anchor as an independent viable competitor in the relevant market if the acquisition were consummated would be difficult, and there is a substantial likelihood that it would be difficult or impossible to restore Anchor's business as it originally existed.

Today's action authorizes Commission staff to seek a federal district court order to prevent the proposed acquisition by Libbey of Anchor. The FTC has authorized the staff filing of a motion for preliminary injunction on the grounds that the transaction as structured would violate federal antitrust laws. If the court grants the FTC's motion, the Commission will have 20 days within which to determine whether to issue an administrative complaint. The FTC vote authorizing staff to file the suit was 5-0.