[Federal Register Volume 62, Number 93 (Wednesday, May 14, 1997)]
[Notices]
[Pages 26559-26568]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12568]
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DEPARTMENT OF JUSTICE
Antitrust Division
U.S. and States of New York and Ohio, and Commonwealth of
Pennsylvania v. Cargill Inc., Akzo Novel, N.V., Akzo Nobel Inc., and
Akzo Nobel Salt, Inc.; Proposed Final Judgment and Competitive Impact
Statement
United States, States of New York and Ohio, and Commonwealth of
Pennsylvania v. Cargill Inc., Akzo Nobel, N.V., Akzo Nobel Inc., and
Akzo Nobel Salt, Inc.: Proposed Final Judgment and Revised Competitive
Impact Statement.
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. sections 16(b)-(h), that a proposed Final
Judgment, Stipulation and Order, and Revised Competitive Impact
Statement have been filed with the United States District Court for the
Western District of New York, Rochester Division, in the United States
and States of New York and Ohio and Commonwealth of Pennsylvania v.
Cargill Inc., Akzo Nobel, N.V., Akzo Nobel, Inc. and Akzo Nobel Salt
Inc., Civil Action No. 97-CV-6161 L.
On April 21, 1997, the United States, the states of New York and
Ohio, and the Commonwealth of Pennsylvania filed a Complaint alleging
that Cargill Inc.'s proposed acquisition of Akzo Nobel, N.V.,'s Western
Hemisphere salt operations would violate Section 7 of the Clayton Act,
15 U.S.C. Sec. 18. The Complaint further alleges that the acquisition
by Cargill of Akzo Nobel's salt operations would lessen competition
substantially and tend to create a monopoly in the production and sale
of rock deicing salt in the Northeast Interior Section of the country
(western Pennsylvania and Massachusetts, upstate New York, Vermont and
eastern Ohio) and in the production and sale of food grade evaporated
salt east of the Rocky Mountains. The proposed Final Judgment, filed
the same time as the Complaint, requires that Akzo divest the
development rights to a rock salt mine in Hampton Corners, New York,
and that Cargill divest a huge stockpile of bulk deicing salt in
Retsof, New York; a number of deicing salt depots; a four-year supply
contract for the sale of bulk deicing salt from Cargill and Akzo mines;
and the Akzo evaporated salt plant in Watkins Glen, New York, along
with certain tangible and intangible assets.
Public comment is invited within the statutory 60-day comment
period. Such comments and responses thereto will be published in the
Federal Register and filed with the Court. Comments should be directed
to J. Robert Kramer, II, Chief, Litigation II Section, Antitrust
Division, U.S. Department of Justice, 1401 H Street, NW., Suite 3000,
Washington, DC 20530 (telephone: (202) 307-0924).
Constance K. Robinson,
Director of Operations.
United States District Court Western District of New York Rochester
Division
United States of America, State of New York, Commonwealth of
Pennsylvania and State of Ohio, Plaintiffs, v. Cargill, Inc., Akzo
Nobel, N.V., Akzo Nobel, Inc. and Akzo Nobel Salt, Inc., Defendants.
Civil Action No. 97-CV616L.
Stipulation and Order
It is stipulated by and between the undersigned parties, by their
respective attorneys, as follows:
(1) The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto (including American Rock
Salt Company LLC, ``American''), and venue of this action is proper in
the United States District Court for the Western District of New York.
(2) The parties stipulate that a Final Judgment in the form hereto
attached may be filed and entered by the Court, upon the motion of any
party or upon the Court's own motion, at any time after compliance with
the requirements of the Antitrust Procedures and Penalties Act (15
U.S.C. Sec. 16), and without further notice to any party or other
proceedings, provided that plaintiffs have not withdrawn their consent,
which any of them may do at any time before the entry of the proposed
Final Judgment by serving notice thereof on defendants and American and
by filing that notice with the Court.
(3) Defendants and American shall abide and comply with the
provisions of the proposed Final Judgment, pending the Judgment's entry
by the Court, or until expiration of time for all appeals of any Court
ruling declining entry of the proposed Final Judgment, and shall, from
the date of the signing of this Stipulation by the parties, comply with
all the terms and provisions of the proposed Final Judgment as though
the same were in full force and effect as an order of the Court.
(4) Defendants Cargill and Akzo shall not consummate the
transaction sought to be enjoined by the Complaint herein before the
Court has signed this Stipulation and Order.
(5) This Stipulation shall apply with equal force and effect to any
amended proposed Final Judgment agreed upon in writing by the parties
and submitted to the Court.
(6) In the event (a) The United States has withdrawn its consent,
as provided in paragraph 2 above, or (b) the proposed Final Judgment is
not entered pursuant to this Stipulation, the time has expired for all
appeals of any Court ruling declining entry of the proposed Final
Judgment, and the Court has not otherwise ordered continued compliance
with the terms and provisions of the proposed Final Judgment, then the
parties are released from all further obligations under this
Stipulation, and the making of this
[[Page 26560]]
Stipulation shall be without prejudice to any party in this or any
other proceeding.
(7) Cargill, Akzo and American represent that the divestitures
ordered in the proposed Final Judgment can and will be made, and that
Cargill, Akzo and American will later raise no claim of hardship or
difficulty as grounds for asking the Court to modify any of the
divestitures provisions contained therein. Dated: April 17, 1997.
For Plaintiff United States of America:
Anthony E. Harris,
U.S. Department of Justice, Antitrust Division, Litigation II, Suite
3000, Washington, D.C. 20005, (202) 307-6583.
For Plaintiff State of New York:
John A. Ioannou,
Assistant Attorney General, Antitrust Bureau, Attorney General's
Office, 120 Broadway, Suite 26-01, New York, New York 10271, (212) 914-
8268.
For Plaintiff Commonwealth of Pennsylvania:
D. Michael Fisher,
Attorney General, Commonwealth of Pennsylvania.
By: Deneice Convert Zeve,
Deneice Convert Zeve,
Deputy Attorney General, Antitrust Section, Office of the Attorney
General, 14th Floor, Strawberry Square, Harrisburg, PA 17120, (717)
787-4530.
For Defendant Cargill Inc.:
Marc G. Schildkraut, Esquire,
Howrey & Simon, 1299 Pennsylvania Avenue, NW, 2nd Floor, Washington, DC
20004, (202) 383-7448.
For Defendant Akzo Nobel, NV:
John W. Behan,
Assistant General Counsel, Akzo Nobel, Inc., 7 Livingstone Avenue,
Dobbs Ferry, NY 10522-2222, (914) 674-5000.
For American Rock Salt Company LLC:
Gunther K. Buerman, Esquire,
Harris Beach & Wilcox, LLP, 130 E. Main Street, Rochester, NY 14604,
(716) 232-4440.
For Plaintiff State of Ohio:
Betty D. Montgomery,
Attorney General.
By: Mitchell Gentile,
Mitchell Gentile,
Assistant Attorney General, Ohio Attorney General's Office, 30 East
Broad Street, 16th Floor, Columbus, OH 43215, (614) 466-4328.
Order
It is so ordered by the Court, this 21 day of April, 1997.
David G. Larimer,
United States District Judge.
United States District Court Western District of New York Rochester
Division
United States of America, State of New York, Commonwealth of
Pennsylvania and State of Ohio, Plaintiffs, v. Cargill Inc., Akzo
Nobel, N.V., Akzo Nobel, Inc. and Akzo Nobel Salt, Inc., Defendants.
Civil Action No.: 97-CV616L.
Final Judgment
Whereas, plaintiffs, the United States of America, the States of
New York and Ohio, and the Commonwealth of Pennsylvania, having filed
their Complaint herein on April 18, 1997, and plaintiffs and defendants
and American by their respective attorneys, having consented to the
entry of this Final Judgment without trial or adjudication of any issue
of fact or law herein, and without this Final Judgment constituting any
evidence against or an admission by any party with respect to any issue
of law or fact herein;
And whereas, defendants and American have agreed to be bound by the
provisions of this Final Judgment pending its approval by the Court;
And whereas, the purpose of this Final Judgment is prompt and
certain divestiture of certain rights and assets to assure that
competition is not substantially lessened;
And whereas, plaintiffs require defendants make certain
divestitures for the purpose of remedying the loss of competition as
alleged in the Compliant;
And whereas, defendants and American have represented to plaintiffs
that the divestitures ordered herein can and will be made and that
defendants and American will later raise no claims of hardship or
difficulty as grounds for asking the Court to modify any of the
divestiture provisions contained below;
Now, therefore, before the taking of any testimony, and without
trial or adjudication of any issue of fact or law herein, and upon
consent of the parties hereto, it is hereby
Ordered, Adjudged, and Decreed as follows:
I. Jurisdiction
This Court has jurisdiction over each of the parties hereto and
over the subject matter of this action. The Complaint states a claim
upon which relief may be granted against defendants, as hereinafter
defined, under Section 7 of the Clayton Act, as amended (15 U.S.C.
Sec. 18).
II. Definitions
As used in this Final Judgment:
A. ``Cargill'' means defendants Cargill Inc., a Delaware
corporation with its headquarters in Wayzata, Minnesota, and includes
its successors and assigns, its subsidiaries, and directors, officers,
managers, agents, and employees.
B. ``Akzo'' means defendants Akzo Nobel, N.V., based in Arnhem, The
Netherlands, and includes its successors and assigns, its subsidiaries
and divisions (including Akzo Nobel, Inc. and Akzo Nobel Salt, Inc.),
and directors, officers, managers, agents, and employees.
C. ``American'' means American Rock Salt Company LLC, a New York
limited liability company with its headquarters in Rochester, New York,
and includes its successors and assigns, its directors, officers,
managers, agents, partners and employees.
D. ``Relevant Evaporated Salt Assets'' means:
(1) All of the tangible assets used in the operation of the Akzo
evaporated slat plant in Watkins Glen, New York, including but not
limited to: all real property (owned or leased) in Watkins Glen, New
York and used in the operation of that plant, or storage of plant
inventory; all manufacturing, packaging equipment, personal property,
inventory, office furniture, fixed assets and fixtures, materials,
supplies, on-site warehouses or storage facilities, and other tangible
property or improvements used in the operation of that plant (but
excluding Akzo's industrial service centers located outside New York
and salt mining or manufacturing locations outside Watkins Glen, New
York); all licenses, permits and authorizations issued by any
governmental organization relating to that plant; all contracts,
agreements, leases, commitments and understandings pertaining to that
plant and its operations; all customer lists and credit records, and
other records maintained by Akzo or Cargill in connection with the
business of the Watkins Glen plant;
(2) At the acquirer's option, a nonexclusive license, for a term
designated by the acquirer, to make, have made, use or sell under the
label of any water conditioning salt product produced by Akzo at the
Watkins Glen, New York plant, and any improvement to or line extension
of that label, but excluding the Diamond Crystal label; and
(3) All intangible assets, wherever located, that relate in any way
to the tangible assets and labels described above (including, but not
limited to, production, packaging and distribution know-how);
exclusive, assignable rights to make, have made, use or sell under any
and all patents or proprietary technology that relate to the Watkins
Glen plant exclusively; contracts to supply goods or services to the
Watkins Glen plant exclusively and the prorated portion of any other
contract to supply goods or services to the Watkins Glen plant;
business information solely dedicated to the tangible assets or the
[[Page 26561]]
labels described above; and nonexclusive, assignable rights to make,
have made, use or sell under all related patents, proprietary
technology and business information used in connection with, but not
solely dedicated to the tangible assets or the labels described above.
E. ``Relevant Bulk Deicing Salt Assets'' means:
(1) A four-year bulk deicing salt supply agreement that includes
the following terms:
(a) For the first three years, the salt supply agreement shall be
renewable annually, at American's (or its assignee's) option; the
fourth year and final year of the agreement shall take effect only if
American (or its assignee) elects, and the United States, New York and
Pennsylvania conclude, in their sole discretion, that substantial
progress has not been made toward construction of a rock salt mine at
Hampton Corners, New York, or that a continuation of the salt supply
contract is necessary for other competitive reasons;
(b) For each of the first three years of the agreement, Cargill
shall supply a maximum of 400,000 tons of specification-grade bulk
deicing salt annually, at $10/ton f.o.b. mine, as follows: 200,000 tons
from its S. Lansing, New York mine, and 200,000 tons (with no force
majeure clause) from Akzo's Cleveland, Ohio mine; in the fourth and
final year of the supply contract, Cargill shall supply a maximum of
300,000 tons of specification-grade bulk deicing salt, at $10/ton
f.o.b. mine, as follows: 150,000 tons from its S. Lansing, New York
mine and 150,000 tons (with no force majeure clause) from Akzo's
Cleveland, Ohio mine; and
(2) All the right, title and interest conveyed by Akzo to Cargill
in each of the following eleven bulk deicing salt terminals currently
owned or leased by Akzo: University Heights, Schenectady, Whitehall,
and Hudson, New York; Buttonwood, Falls Creek, Reading, and Cresson,
Pennsylvania; Hartford, Connecticut; Middlesex, Vermont; and Columbus,
Ohio.
F. ``Additional Rock Salt Terminals'' means all the right title and
interest conveyed by Akzo to Cargill in the following bulk deicing
terminals currently owned or leased by Akzo: Bow, West Lebanon,
Claremont and Littleton, New Hampshire; Taunton, Readville and N.
Billerica, Massachusetts; Norwich and Waterbury, Connecticut; Staunton
and Roanoke, Virginia; Brewer and Oakland, Maine; Long Island City, New
York; and Baltimore, Maryland.
G. ``Hampton Corners Mine Rights'' means all right, title and
interest in any land, equipment, mining rights, or other assets,
tangible or intangible, to be conveyed by Akzo to American pursuant to
the Asset Purchase Agreement, dated January 31, 1997.
H. ``Default'' means (a) With respect to the Hampton Corners Mine
Rights, the failure by American to close, due to its failure to fulfill
all conditions precedent to closing, on its purchase of the Hampton
Corners Mine Rights from Akzo within 60 days after September 1, 1997,
or such other closing date later agreed upon by Akzo and American,
provided that in no event shall the closing date for that purchase take
place after September 1, 1998; and (b) with respect to the Retsof
Stockpile, the failure by American to close, due to its failure to
fulfill all conditions precedent to closing, on its purchase of the
Retsof Stockpile within 60 days after September 1, 1997, or such other
closing date later agreed upon by American and Cargill, provided that
in no event shall the closing date for that purchase take place after
September 1, 1998.
I. ``Retsof Stockpile'' means all right, title and interest in the
rock salt inventory outside Akzo's Retsof, New York rock salt mine in
Livingston County, New York, which currently consists of approximately
870,000 tons of bulk deicing salt.
J. ``Label'' means all legal rights associated with a brand's
trademarks, trade names, copyrights, designs, and trade dress (and any
improvements, extensions or modifications); the brand's trade secrets;
know-how or other proprietary information for making, having made,
using and selling the brand, including, but not limited to, packaging,
sales, marketing and distribution know-how and documentation, such as
customer lists.
K. ``Northeast United States'' means any of the following areas:
Vermont, western portions of Pennsylvania and Massachusetts, upstate
New York, and eastern Ohio.
L. ``Relevant Assets'' means the Retsof Stockpile, Relevant Bulk
Deicing Salt Assets, Relevant Evaporated Salt Assets, Hampton Corners
Mine Rights, and Additional Rock Salt Terminals, as the context
requires.
III. Applicability
A. The provisions of this Final Judgment apply to the defendants
and American, their successors and assigns, their subsidiaries,
directors, officers, managers, agents, and employees, and all other
persons in active concert or participation with any of them who shall
have received actual notice of this Final Judgment by personal service
or otherwise.
B. Defendants Akzo and Cargill shall require, as a condition of the
sale or other disposition of all or substantially all of each of their
respective salt assets that the acquirer or acquirers agree to be bound
by the provisions of this Final Judgment; provided, however, that
defendants need not obtain such an agreement from an acquirer of the
assets to be divested pursuant to the Final Judgment.
IV. Divestitures and Assignments
A. Defendant Cargill is ordered and directed to divest the Retsof
Stockpile to American, at a cost of $10/ton for specification-grade
bulk deicing salt, loaded f.o.b. at the Retsof Stockpile. Cargill is
ordered and directed, within 120 days after filing of the Complaint in
this action, to execute a contract to divest the Retsof Stockpile and
to ensure the availability of salt from the Retsof Stockpile to
American for the winter of 1997-1998.
B. Cargill is ordered and directed, within 150 days after filing of
the Complaint in this action, or within five (5) days after notice of
the entry of this Final Judgment by the Court, whichever is later, to
divest the Relevant Evaporated Salt Assets to an acquirer acceptable to
plaintiff United States, in its sole discretion.
C. Defendant Cargill is ordered and directed, within 30 days after
the filing of the Complaint in this action, to divest the Relevant Bulk
Deicing Assets to American. Cargill is further ordered and directed,
within 12 months after filing of the Complaint in this action, or five
(5) days after the entry of this Final Judgment by the Court, whichever
is later, to grant American an irrevocable option to acquire, at book
value or cost (whichever is lowest), the Additional Rock Salt
Terminals, or where Cargill does not own an Additional Rock Salt
Terminal, Cargill must offer to assign to American its rights in that
terminal. American must exercise its option to acquire or accept
assignment of such rights and obligations in any or all of the
Additional Rock Salt Terminals within seven (7) months after it has
received such option or assignment offer from defendant Cargill.
D. Defendant Akzo is ordered and directed to divest the Hampton
Corners Mine Rights to American. In the event that American defaults on
its purchase of the Hampton Corners Mine Rights, Akzo is ordered and
directed to divest the Hampton Corners Mine Rights, within 120 days
after default, to an acquirer acceptable to the United States,
[[Page 26562]]
New York and Pennsylvania, in their sole discretion.
E. In the event that American defaults on its purchase of the
Retsof Stockpile, Cargill is ordered and directed to divest the Retsof
Stockpile, within 120 days after default, to an acquirer acceptable to
the United States, New York and Pennsylvania, in their sole discretion.
F. In the event that American decides to sell or otherwise assign
its rights to the Relevant Bulk Deicing Assets or the Retsof Stockpile,
American shall provide plaintiffs United States, New York and
Pennsylvania with thirty days' written notice of the proposed sale or
assignment. Any such sale or assignment shall be made to an acquirer
acceptable to the United States, New York and Pennsylvania, in their
sole discretion.
G. Unless plaintiffs United States, New York and Pennsylvania
otherwise consent in writing (or in the case of the Relevant Evaporated
Salt Assets, the United States alone consents in writing), the
divestitures pursuant to Section IV (B), (D) and (E) of this Final
Judgment, or by the trustee appointed pursuant to Section V, shall
include all of the Relevant Assets, and shall be accomplished in such a
way as to satisfy: (a) the United States, New York and Pennsylvania, in
their sole discretion, that the Retsof Stockpile and Hampton Corners
Mine Rights can and will be used by an acquirer (or acquirers) as part
of a viable, ongoing business engaged in the sale and distribution of
bulk deicing salt in the Northeast United States; and (b) in the case
of the Relevant Evaporated Salt Assets, the United States alone, in its
sole discretion, that the Relevant Evaporated Salt Assets will be used
as part of a viable, ongoing business engaged in the sale of food grade
evaporated salt. The divestitures, whether pursuant to Section IV (B),
(D) and (E) or V of the Final Judgment, shall be made (1) To an
acquirer that, in the sole judgment of plaintiffs United States, New
York and Pennsylvania (or in the case of the Relevant Evaporated Salt
Assets, plaintiff United States's sole judgment), has the capability
and intent of competing effectively, and has the managerial,
operational and financial capability to compete effectively as a seller
of bulk deicing or food grade salt; and (2) pursuant to agreements the
terms of which shall not, in the sole judgment of plaintiffs United
States, New York and Pennsylvania (or in the case of the Relevant
Evaporated Salt Assets, plaintiff United States's sole judgment),
interfere with the ability of any acquirer to compete effectively.
H. Defendants Akzo (in the case of the Hampton Corners Mine Rights)
and Cargill (in the case of the Retsof Stockpile, and Relevant
Evaporated Salt Assets) are ordered and directed to use their best
efforts to divest said assets or assign said rights, and to use their
best efforts to obtain all regulatory approvals necessary for such
divestitures, as expeditiously as possible. Plaintiffs United States,
New York and Pennsylvania, in their sole discretion (or in the case of
the Relevant Evaporated Salt Assets, the United States alone) may
extend the time period for each such divestiture for two (2) additional
thirty-day periods of time, not to exceed 60 calendar days in total.
I. In accomplishing the divestiture ordered by this Final Judgment,
defendant Cargill promptly shall make known, by usual and customary
means, the availability of the Relevant Evaporated Salt Assets. In the
event of default on the Hampton Corners Mine Rights, Akzo promptly
shall make known, by usual and customary means, the availability of the
Hampton Corners Mine Rights. In the event of default on the Retsof
Stockpile, Cargill promptly shall make known, by usual and customary
means, the availability of the Retsof Stockpile.
Akzo and Cargill shall inform any person making a bona fide inquiry
regarding a possible purchase that the sale is being made pursuant to
the Final Judgment and provide such person with a copy of the Final
Judgment. Akzo and Cargill shall make known to any person making an
inquiry which Relevant Assets are available for sale. Akzo and Cargill
also shall offer to furnish to all bona fide prospective acquirers,
subject to customary confidentiality assurances, all information
regarding the Relevant Assets customarily provided in a due diligence
process, except such information that is subject to attorney-client
privilege or attorney work-product privilege. Akzo and Cargill shall
make available such information to plaintiffs at the same time that
such information is made available to any other person.
J. Akzo and Cargill shall permit bona fide prospective acquirers of
the Relevant Evaporated Salt Assets to have access to personnel and to
make such inspection of all Relevant Evaporated Salt Assets, and any
and all financial, operational or other documents and information, as
is customary in a due diligence process.
K. Defendants Akzo and Cargill shall not interfere with any efforts
by any acquirer to interview or employ the general manager or any other
employee of Akzo's Watkins Glen, New York evaporated salt plant.
L. Akzo and Cargill shall not take any action, direct or indirect
(not including otherwise lawful competitive price action, expansion of
capacity or similar competitive conduct), that will impede in any way
the development of the Hampton Corners Mine Rights.
V. Appointment of Trustee
A. In the event that Cargill has not divested the Retsof Stockpile
or the Relevant Evaporated Salt Assets, or Akzo has not divested the
Hampton Corners Mine Rights, within the applicable time period
specified in Section IV above, the Court shall appoint, on application
of plaintiff United States, a trustee selected by the United States to
effect the divestiture of the assets.
B. After the trustee's appointment has become effective, only the
trustee shall have the right to sell the assets that have not been
timely divested. The trustee shall have the power and authority to
accomplish the divestiture at the best price then obtainable upon a
reasonable effort by the trustee, subject to the provisions of Section
IV and VI of this Final Judgment, and shall have such other powers as
the Court shall deem appropriate. Subject to Section VI of this Final
Judgment, the trustee shall have the power and authority to hire at the
cost and expense of the party that has not made the pertinent
divestiture any investment bankers, attorneys or other agents
reasonably necessary in the judgment of the trustee to assist in the
divestiture, and such professionals or agents shall be solely
accountable to the trustees. The trustee shall have the power and
authority to accomplish the divestiture at the earliest possible time
to a purchaser acceptable to plaintiffs United States, New York and
Pennsylvania, in their sole judgment (or in the case of the Relevant
Evaporated Salt Assets, the United States alone), and shall have such
other powers as this Court shall deem appropriate. Defendants shall not
object to the sale of any of the Relevant Assets by the trustee on any
grounds other than the trustee's malfeasance. Any such objection by
defendants must be conveyed in writing to plaintiffs and the trustee no
later than 15 calendar days after the trustee has provided the notice
required under Section VII of this Final Judgment.
c. The trustee shall serve at the cost and expense of Cargill (in
the case of the Retsof Stockpile or Relevant Evaporated Salt Assets)
and Akzo (in the case of the Hampton Corners Mine Rights) on such terms
and conditions as the Court may
[[Page 26563]]
prescribe, and shall account for all monies derived from the sale of
the assets sold by the trustee and all costs and expenses so incurred.
After approval by the Court of the trustee's accounting, including fees
for its services and those of any professionals and agents retained by
the trustee, all remaining monies shall be paid to Cargill (in the case
of the Retsof Stockpile or the Relevant Evaporated Salt Assets) and
Akzo (in the case of the Hampton Corners Mine Rights), and the
trustee's service shall then be terminated. The compensation of such
trustees and of any professionals and agents retained by the trustee
shall be reasonable in light of the value of the divestiture and based
on a fee arrangement providing the trustee with an incentive based on
the price and terms of the divestiture and the speed with which it is
accomplished.
D. Defendants shall take no action to interfere with or impede the
trustee's accomplishment of the divestiture of any assets, and shall
use their best efforts to assist the trustee in accomplishing the
required divestiture, including best efforts to effect all necessary
regulatory approvals. Subject to a customary confidentiality agreement,
the trustee shall have full and complete access to the personnel,
books, records and facilities related to the Relevant Evaporated Salt
Assets, Retsof Stockpile, or Hampton Corners Mine Rights, and
defendants shall develop such financial or other information as may be
necessary for the divestiture of these assets. Defendants shall permit
prospective acquirers of the assets to have access to personnel and to
make such inspection of physical facilities and any and all financial,
operational or other documents and information as may be relevant to
the divestiture required by this Final Judgment.
E. After its appointment becomes effective, the trustee shall file
monthly reports with Cargill (in the case of the Retsof Stockpile or
the Relevant Evaporated Salt Assets), Akzo (in the case of the Hampton
Corners Mine Rights), plaintiffs, and the Court;, setting forth the
trustee's efforts to accomplish divestiture of the assets as
contemplated under the Final Judgment; provided, however, that to the
extent such reports contain information that the trustee deems
confidential, such reports shall not be filed in the public docket of
the court. Such reports shall include the name, address and telephone
number of each person who, during the preceding month, made an offer to
acquire, expressed an interest in acquiring, entered into negotiations
to acquire, or was contacted or made an inquiry about acquiring, any
interest in the Relevant Assets, and shall describe in detail each
contact with any such person during the period. The trustee shall
maintain full records of all efforts made to divest the Relevant
Assets.
F. Within six (6) months after its appointment has become
effective, if the trustee has not accomplished the divestiture required
by Section IV of this Final Judgment, the trustee shall promptly file
with the Court a report setting forth (1) the trustee's efforts to
accomplish the required divestiture, (2) the reasons, in the trustee's
judgment, why the required divestiture has not been accomplished, and
(3) the trustee's recommendations, provided, however, that to the
extent such reports contain information that the trustee deems
confidential, such reports shall not be filed in the public docket of
the Court. The trustee shall at the same time furnish such reports to
plaintiffs and Cargill and Akzo, which shall each have the right to be
heard and to make additional recommendations. The Court shall
thereafter enter such orders as it shall deem appropriate to accomplish
the purpose of this Final Judgment, which shall, if necessary, include
extending the term of the trustee's appointment.
VI. Preservation of Assets/Hold Separate
Until the divestiture of the Relevant Evaporated Salt Assets
required by Section IV of the Final Judgment has been accomplished:
A. Defendants Cargill and Akzo shall take all steps necessary to
operate Akzo's Watkins Glen, New York evaporated salt plant as a
separate, independent, ongoing, economically viable and active
competitor to defendant Cargill's other evaporated salt plants and
solar salt operations in the United States, and shall take all steps
necessary to ensure that, except as necessary to comply with Section IV
and paragraphs B and C of this Section of the Final Judgment,
management of the Watkins Glen, New York evaporated salt plant,
including the performance of decision-making functions regarding
marketing and pricing, will be kept separate and apart from, and not
influenced by, defendant Cargill.
B. Defendant Cargill shall use all reasonable efforts to maintain
and increase sales of evaporated salt products by Akzo's Watkins Glen,
New York evaporated salt plant and shall maintain at 1996 or previously
approved levels for 1997, whichever are higher, promotional
advertising, sales, marketing and merchandising support for salt
products produced by Akzo's Watkins Glen, New York evaporated salt
plant.
C. Defendants Cargill and Akzo shall take all steps necessary to
ensure that the assets used in the operation of Akzo's Watkins Glen,
New York plant, and managers, technical and operating and employees of
that plant shall not be transferred or reassigned to any other
facility, except for transfer bids initiated by employees pursuant to a
defendant's regular, established job posting policies, provided that
the defendant gives plaintiff United States and the acquirer ten (10)
days' notice of such transfer.
D. Defendants Cargill and Akzo shall not, except as part of a
divestiture approved by plaintiffs United States, New York and
Pennsylvania, sell any salt from the Retsof Stockpile.
E. Defendants Cargill and Akzo shall take no action, other than
lawful competitive price action, expansion of capacity, or similar
competitive conduct, that may jeopardize sale or assignment of the
Retsof Stockpile, Relevant Evaporated Salt Assets, Additional Rock Salt
Terminals, or Hampton Corners Mine Rights.
F. Defendants Cargill and Akzo shall appoint a person or persons to
oversee the assets to be held separate and who will be responsible for
each defendant's compliance with Section VI of the Final Judgment.
VII. Notification
Within two (2) business days following execution of a binding
agreement to divest, including all contemplated ancillary agreements
(e.g., financing), to effect any proposed divestiture pursuant to
Section IV or V of the Final Judgment, Cargill or Akzo or the trustee,
whichever is then responsible for effecting the divestiture, shall
notify plaintiffs of the proposed divestiture. If the trustee is
responsible for effecting the divestiture, it shall similarly notify
Cargill and Akzo. The notice shall set forth the details of the
proposed transaction and list the name, address, and telephone number
of each person not previously identified who offered to, or expressed
an interest in or a desire to, acquire any ownership interest in the
Relevant Evaporated Salt Assets, together with full details of same.
Within fifteen (15) calendar days of receipt by plaintiffs of such
notice, plaintiffs may request from defendants, the proposed acquirer
or acquirers, any other third party, or the trustee, if applicable,
additional information concerning the proposed divestiture, the
proposed acquirer, and any other potential acquirer. Defendants and the
trustee shall furnish any additional
[[Page 26564]]
information requested within fifteen (15) calendar days of the receipt
of the request. Within thirty (30) calendar days after receipt of the
notice or within twenty (20) calendar days after plaintiffs have been
provided the additional information, whichever is later, plaintiffs
United States, New York and Pennsylvania shall provide written notice
to defendants and the trustee, if there is one, stating whether or not
they object to the proposed divestiture. If plaintiffs United States,
New York and Pennsylvania fail to object within the period specified,
or if they provide written notice to defendants and the trustee, if
there is one, that they do not object, then the divestiture may be
consummated, subject only to a defendant's limited right to object to
the sale under Section V(B) of this Final Judgment. A divestiture
proposed under Section IV (A), (C) or (D) shall not be consummated if
plaintiffs United States, New York or Pennsylvania object to it. A
divestiture proposed under Section IV(B) shall not be consummated if
plaintiff United States objects to it. Upon objection by the United
States, or by Cargill or Akzo under the proviso in Section V(B), a
divestiture proposed under Section V shall not be consummated unless
approved by the Court.
VIII. Financing
Defendants are ordered and directed not to finance all or any part
of any purchase by an acquirer made pursuant to Sections IV or V of
this Final Judgment without the prior written consent of plaintiffs
United States, New York and Pennsylvania.
IX. Affidavits
A. Within twenty (20) calendar days of the filing of this Final
Judgment and every thirty (30) calendar days thereafter until the
divestiture has been completed, whether pursuant to Section IV or
Section V of this Final Judgment, defendants shall deliver to
plaintiffs an affidavit as to the fact and manner of defendants'
compliance with Section IV or V of this Final Judgment. Each such
affidavit shall include, inter alia, the name, address and telephone
number of each person who, at any time after the period covered by the
last such report, was contacted by defendants, or their
representatives, made an offer to acquire, expressed an interest in
acquiring, entered into negotiations to acquire, or made an inquiry
about acquiring, any interest in the Relevant Assets, and shall
describe in detail each contact with any such person during that
period. Each such affidavit shall also include a description of the
efforts that defendants have taken to solicit a buyer for the Relevant
Assets.
B. Within twenty (20) calendar days of the filing of this Final
Judgment Cargill shall deliver to the United States an affidavit which
describes in reasonable detail all actions defendants have taken and
all steps defendants have implemented on an on-going basis to preserve
the Relevant Assets pursuant to Section VI of this Final Judgment.
Cargill shall deliver to plaintiffs an affidavit describing any changes
to the efforts and actions outlined in their earlier affidavit(s) filed
pursuant to the Section within fifteen (15) calendar days after such
change is implemented.
C. Cargill and Akzo shall preserve all records of all efforts made
to preserve and to divest the Relevant Assets.
X. Compliance Inspection
For the purpose of determining or securing compliance with the
Final Judgment and subject to any legally recognized privilege, from
time to time:
A. Duly authorized representatives of plaintiff United States,
including consultants and other persons retained by the United States,
shall, upon written request of the United States Attorney General, or
of the Assistant Attorney General in charge of the Antitrust Division,
and on reasonable notice to defendants or American made to their
principal offices, be permitted:
(1) Access during office hours of defendants to inspect and copy
all books, ledgers, accounts, correspondence, memoranda and other
records and documents in the possession or under the control of
defendants, who may have counsel present, relating to any matters
contained in the Final Judgment; and
(2) Subject to the reasonable convenience of defendants, and
without restraint or interference from defendants, to interview
directors, officers, employees and agents of defendants, who may have
counsel present, regarding any such matters.
B. Upon the written request of the United States Attorney General,
or of the Assistant Attorney General in charge of the Antitrust
Division, made to defendants' principal offices, defendants shall
submit such written reports, under oath if requested, with respect to
any of the matters contained in this Final Judgment as may be
requested.
C. No information or documents obtained by the means provided in
Section IX or this Section X shall be divulged by any representative of
the United States to any person other than a duly authorized
representative of the Executive Branch of the United States, except in
the course of legal proceedings to which the United States is a party
(including grand jury proceedings), or for the purpose of securing
compliance with this Final Judgment, or as otherwise required by law.
D. If at the time information or documents are furnished by a
defendant to plaintiffs, and such defendant represents and identifies
in writing the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(7) of the Federal
Rules of Civil Procedure, and such defendant marks each pertinent page
of such material, ``Subject to claim of protection under Rule 26(c)(7)
of the Federal Rules of Civil Procedure,'' then ten (10) calendar days'
notice shall be given by plaintiffs to such defendant prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding) to which such defendant is not a party.
XI. Retention of Jurisdiction
Jurisdiction is retained by this Court at any time for such further
orders and directions as may be necessary or appropriate for the
construction, implementation or modification of any provisions of this
Final Judgment, for the enforcement of compliance herewith, and for the
punishment of any violation hereof.
XII. Termination
Unless this Court grants an extension, this Final Judgment will
expire upon the tenth anniversary of the date of its entry.
XIII. Public Interest
Entry of this Final Judgment is in the public interest.
Dated: ______, 1997.
United States District Judge.
United States District Court Western District of New York Rochester
Division
United States of America, State of New York, Commonwealth of
Pennsylvania and State of Ohio, Plaintiffs, v. Cargill, Inc., Akzo
Nobel, N.V., Akzo Nobel, Inc., and Akzo Nobel Salt, Inc.,
Defendants. Civil No. 97-CV-06161 L.
Revised Competitive Impact Statement
The United States, pursuant to Section 2(b) of the Antitrust
Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16(b)-(h),
files this Competitive Impact Statement relating to the proposed Final
Judgment submitted for entry in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
On April 21, 1997, the United States, the states of New York and
Ohio, and
[[Page 26565]]
the Commonwealth of Pennsylvania filed a civil antitrust complaint,
which alleges that Cargill Inc.'s acquisition of the Western Hemisphere
salt assets of Akzo Nobel, N.V. (``Akzo'') would violate Section 7 of
the Clayton Act, 15 U.S.C. Sec. 18. Cargill and Akzo are two of only
four competitors engaged in the production and sale of rock salt for
bulk deicing purposes (``rock deicing salt'') in the Northeast Interior
Market, an area of the United States centered around the eastern
portion of Lake Erie, and which comprises the western portions of
Pennsylvania and Massachusetts, upstate New York, eastern Ohio, all of
Vermont, and major cities such as Buffalo and Rochester, New York,
Erie, Pennsylvania, and Burlington, Vermont. Cargill and Akzo are also
the second and third largest firms engaged in the production and sale
of food grade evaporated salt in that part of the United States east of
the Rocky Mountains.
The Complaint alleges that a combination of Cargill and Akzo would
substantially lessen competition in the production and sale of rock
deicing salt and food grade evaporated salt in two relevant geographic
markets. The prayer for relief in the Complaint seeks: (1) A judgment
that the proposed acquisition would violate Section 7 of the Clayton
Act; and (2) permanent injunctions that would prevent Cargill from
acquiring control of Akzo's bulk deicing and food grade evaporated salt
business, or otherwise combining them with its own business in the
United States.
At the same time the suit was filed, the United States, the states
of New York and Ohio, and the Commonwealth of Pennsylvania also filed a
proposed settlement that would permit Cargill to complete its
acquisition of Akzo's Western Hemisphere salt operations, but require
it to divest certain bulk deicing and evaporated salt assets in such a
way as to preserve competition in these markets. This settlement
consists of a Stipulation and Order and a proposed Final Judgment. Both
impose obligations on American Rock Salt Company LLC (``American''), a
third party that voluntarily submitted to the jurisdiction of the Court
for purposes of ensuring effective relief in the rock deicing salt
market.
The proposed Final Judgment orders Cargill to divest Akzo's Watkins
Glen, New York evaporated salt plant and certain tangible and
intangible assets that relate to that plant. It also orders Cargill and
Akzo to divest a number of bulk deicing salt assets to American, a
prospective new entrant in the sale of bulk deicing salt in the
Northeast Interior Market. The deicing salt assets to be sold by Akzo
to American include options to develop a new rock salt mine site in
Hampton Corners, New York.\1\ The deicing salt assets to be sold by
Cargill to American include a mammoth 872,000 ton stockpile of bulk
deicing salt located in Retsof, New York; a three-year contract (with
an optional fourth year) for the supply of rock deicing salt to be sold
at $10 a ton; and a number of terminals throughout the Northeast that
have been used by Akzo for storage and transshipment of deicing salt.
With these assets, American can immediately begin competing in the sale
of rock deicing salt, while constructing its own rock salt mine in
Hampton Corners, New York, now scheduled to begin full scale operations
in 1999.
---------------------------------------------------------------------------
\1\ The final agreement reached between Cargill and Akzo did not
include the sale of the Hampton Corners rights to Cargill; thus,
Akzo is responsible for divesting these rights.
---------------------------------------------------------------------------
Cargill must complete its divestiture of the Watkins Glen
evaporated salt plant and related assets within 150 days, or five days
after entry of the Final Judgment, whichever is later. Cargill must
complete its divestiture of the supply contract and salt terminals to
American within thirty (30) days and must contract to sell the Retsof
Stockpile within one hundred and twenty (120) days after filing of the
Complaint. Akzo's sale of the Hampton Corners rights to American must
be consummated no later than September 1, 1998.
The Stipulation and Order and proposed Final Judgment require
Cargill and Akzo to ensure that, until the divestitures mandated by the
proposed Final Judgment are accomplished, Akzo's Watkins Glen
evaporated salt plant and related assets will be maintained and
operated as a saleable and economically viable, ongoing concern, with
competitively-sensitive business information and decision-making
divorced from Cargill's own salt business. Cargill and Akzo will each
appoint a person or persons to monitor and ensure their compliance with
these requirements of the proposed Final Judgment.
The parties have stipulated that the proposed Final Judgment may be
entered after compliance with the APPA. Entry of the proposed Final
Judgment would terminate this action, except that the Court would
retain jurisdiction to construe, modify, or enforce the provisions of
the proposed Final Judgment and to punish violations thereof.
II. Description of the Events Giving Rise to the Violations Alleged in
the Complaint
A. The Defendants and the Proposed Transaction
Cargill is a large, privately-held concern that, inter alia, mines,
produces and sells bulk deicing and food grade evaporated salt
throughout the United States. Cargill owns and operates a rock salt
mine in South Lansing, New York that produces bulk deicing salt sold
throughout the Northeast. Cargill also operates evaporated salt plants
in Beaux Bridge, Louisiana; Hutchinson, Kansas; and Watkins Glen, New
York that compete in the production and sale of food grade evaporated
salt in states east of the Rocky Mountains. In 1996, Cargill's total
sales of all types of salt exceeded $250 million.
Akzo also mines, produces and sells bulk deicing and food grade
evaporated salt throughout the United States. Akzo owns rock salt mines
in Cleveland, Ohio and on Avery Island, Louisiana. It also operated a
rock salt mine in Retsof, New York, until the mine flooded and was
closed in 1995. Before the mine closed, however, Akzo salvaged as much
rock salt as it could, creating a huge stockpile of salt on the Retsof
site, from which Akzo continued to sell rock salt deicing salt to
customers in the Northeast Interior Market. Akzo had plans to increase
production out of its Cleveland mine and ship significantly greater
quantities of rock deicing salt from there into the Northeast Interior
Market, directly in competition against Cargill's South Lansing, New
York mine.
Akzo owns and runs evaporated salt plants in St. Clair, Michigan;
Akron, Ohio; and Watkins Glen, New York, that directly compete against
Cargill in the sale of food grade evaporated salt in the area of the
country east of the Rocky Mountains. In 1996, Akzo had total sales of
all kinds of salt of about $370 million.
In August 1996, Cargill agreed to acquire the Western Hemisphere
salt operations of Akzo for about $160 million. This transaction, which
would combine the nation's second and third largest salt producers in
already highly concentrated markets for salt, precipitated the
governments' antitrust suit.
B. The Effects of the Transaction on Competition in the Sale of Bulk
Rock Deicing Salt in the Northeast Interior Market
Bulk deicing salt is a medium or coarse grade of rock or solar salt
purchased primarily by state and municipal government agencies for use
[[Page 26566]]
in deicing roads and sidewalks. Because of its unique combination of
highly desirable features--low cost, general availability and superior
ice and snow melting capabilities--there are no good substitutes for
bulk deicing salt.
Either rock or solar salt may be used for bulk deicing purposes. As
a practical matter, however, in the Northeast Interior Market, only
rock salt can be economically used for bulk deicing purposes. Sources
of solar salt are too far away from the Northeast Interior Market to be
effective competitive factors, and solar salt itself, because of its
high moisture content, will not perform well in the low winter
temperatures prevalent in the Northeast. For these reasons, for bulk
deicing purposes, solar salt is not a good substitute for rock salt in
the Northeast Interior Market.
The Complaint alleges that, for purposes of antitrust analysis, the
production and sale of rock salt for bulk deicing purposes constitutes
a line of commerce, or relevant product market, and that the Northeast
Interior Market, because of its distance and relative isolation from
other areas, constitutes a section of the country, or relevant
geographic market.
Only four firms produce and sell rock deicing salt in the Northeast
Interior Market--Cargill, Akzo, Morton, and North American Salt
(``NAMSCO'')--and each bids on contracts to supply state and municipal
governments with this critical winter safety product. Entry is time-
consuming and difficult. Absent the acquisition, and despite the
closure of Akzo's Retsof mine, Akzo and Cargill would have actively bid
against each other for customers in the relevant market. The evidence
developed in this investigation indicates that the combination of
Cargill and Akzo likely would result in an increase in the amount of
the price of winning bids for state salt contracts, to the detriment of
consumers, even if the three remaining bidders do not actively collude
or cooperatively interact.
While the proposed acquisition was pending, Akzo contracted to sell
its rights to develop the Hampton Corners salt mine site to American, a
prospective new entrant. The opening of a new mine by American, or any
other new firm, would eliminate any anticompetitive effect in the
Northeast Interior Market from Cargill's acquisition of Akzo. An
analysis of this ``fix'', however, must recognize that American has not
yet closed on its purchase of the mine development rights, and even
when it does, it will not complete its development of the Hampton
Corners mine until at least 1999. Until the mine is completed and
opened, the effect of Cargill's acquisition of Akzo's huge Retsof
Stockpile, Cleveland, Ohio rock salt mine, and Northeast rock salt
terminals may be to substantially lessen competition in the production
and sale of bulk deicing salt in the Northeast Interior Market.
C. The Effects of the Transaction on Competition in the Market for the
Production and Sale of Food Grade Evaporated Salt East of the Rocky
Mountains
Food grade evaporated salt, unlike rock or solar salt, is a highly
refined product (at least 99.7% purity) that contains few contaminants
such as bacteria, silica or dirt and meets high purity standards
established by the Food and Drug Administration for salt intended for
human consumption. One of the purest forms of salt available, food
grade evaporated salt is primarily used by food makers as a spice to
help preserve, or to enhance the flavor of, a very wide variety of
baked, packaged, canned and frozen foods and snacks, everything from
apple pie to canned zucchini.
Because of its high purity, food makers strongly prefer to use food
grade evaporated salt and they will pay a significant premium for that
salt before switching to any other products. There is not good
substitute for food grade evaporated salt.
The Complaint alleges that, for antitrust purposes, the manufacture
and sale of food grade evaporated salt constitutes a line of commerce,
or relevant product market, and that the area east of the Rocky
Mountains constitutes a section of the country, or relevant geographics
market. The Complaint alleges that in this market, the effect of
Cargill's acquisition of Akzo may be to lessen competition
substantially in the manufacture and sale of food grade evaporated
salt.
There are three major producers of food grade evaporated salt in
the East of the Rocky Mountains Market: Cargill, Akzo and Morton.
NAMSCO and United, which also produce food grade evaporated salt, do
not have significant shares of the East of the Rocky Mountain Market.
IMC Global, a new entrant into the production of evaporated salt, has
not opened its plant, much less made significant sales of food grade
salt. Moreover, it would take any new entrant, including IMC, years to
build a reputation for consistent production of high purity salt, a
critical requirement for successfully marketing this product to the
nation's food processors.
In this highly concentrated market, a combination of Cargill and
Akzo, the Complaint alleges, would likely lead to an increase in prices
for food grade evaporated salt east of the Rocky Mountains, a $200
million market. Cargill's acquisition of Akzo is likely to diminish
competition by enabling the remaining competitors to engage more
easily, frequently, and effectively in coordinating pricing interaction
that harms customers. With the elimination of Akzo, market incumbents
will no longer compete for business as aggressively since they will not
have to worry about losing business to Akzo.
III. Explanation of the Proposed Final Judgment
The proposed Final Judgment would preserve competition in the sale
of bulk deicing salt in the Northeast Interior Market and in the sale
of food grade evaporated salt in the East of the Rockies Market. The
Judgment requires that within one hundred fifty (150) days after the
Complaint in this action is filed (or five days after it receives
notice that the Judgment has been entered), Cargill must divest Akzo's
Watkins Glen, New York evaporated salt plant and related assets to a
acquirer acceptable to the United States. The Watkins Glen, New York
plant has sufficient production capacity for food grade evaporated salt
and, due to the high margins for food grade evaporated salt, the
incentive to increase output and discipline any attempt to increase
prices by Cargill and Morton, the major players in food grade
evaporated salt. A Watkins Glen plant not owned by the current major
food grade evaporated salt competitors would alleviate the
anticompetitive concerns raised by Cargill's acquisition of Akzo's St.
Clair, Michigan and Akron, Ohio plants. To ensure that the plant
remains independent and viable before sold, the Judgment mandates that
Cargill keep operations, pricing, and marketing for that plant separate
from those of its other operations.
To preserve competition in the sale of rock salt for bulk deicing
purposes in the Northeast Interior Market, the Judgment affirmatively
requires that Akzo divest the Hampton Corners mine rights to American,
or if American, or if American fails to secure financing and defaults,
that it divest to an acquirer willing to compete by building a new mine
at the Hampton Corners mine site. To preserve market competition in the
interim period preceding the construction of a new mine by American or
any other firm, the Judgment requires that Cargill must divest to
American the Retsof, New York rock salt stockpile; a three-year
[[Page 26567]]
contract (with an optional fourth year) for the supply of bulk deicing
salt, at $10 a ton, from Cargill's South Lansing, New York and Akzo's
Cleveland, Ohio rock salt mines; and a number of terminals or depots
currently used by Akzo to store or transship bulk deicing salt to
customers. If American defaults on its contract to purchase the Retsof
Stockpile, Cargill must divest the Retsof Stockpile.
In the event that American defaulters on the Hampton Corners mine
rights purchase, or on its Retsof Stockpile purchase, the divestiture
of these assets must be made to an acquirer acceptable to the Unites
States, New York and Pennsylvania, in their sole discretion.
Until the ordered divestitures take place, defendants must take all
reasonable steps necessary to accomplish the divestitures, and
cooperate with any prospective acquirer. If defendants do not
accomplish the ordered divestitures within the specified time periods,
the proposed Judgment provides procedures by which the Court shall
appoint a trustee to complete the divestitures. The defendants must
cooperate fully with the trustee.
If a trustee is appointed, the proposed Final Judgment provides
that party initially responsible for making the divestiture will pay
all costs and expenses of the trustee. The trustee's compensation will
be structured so as to provide an incentive for the trustee to obtain
the highest price then available for the assets to be divested, and to
accomplish the divestiture as quickly as possible.
After the effective date of his or her appointment, the trustee
shall serve under such other conditions as the Court may prescribe.
After his or her appointment becomes effective, the trustee will file
monthly reports with the parties and the Court, setting forth the
trustee's efforts to accomplish the divestiture. At the end of six (6)
months, if the mandated divestiture has not been accomplished, the
trustee shall file promptly with the Court a report that sets forth the
trustee's efforts to accomplish the divestiture, explain why the
divestiture has not been accomplished, and make any recommendations.
The trustee's report will be furnished to the parties and shall be
filed in the public docket, except to the extent the report contains
information the trustee deems confidential. To each affected party will
have the right to make additional recommendations to the Court. The
Court shall enter such orders as it deems appropriate to carry out the
purpose of the trust.
The relief sought in the various markets alleged in the Complaint
has been tailored to ensure that purchasers of food grade evaporated
salt and bulk deicing salt will not experience anticompetitive prices
or other contract terms as a consequence of the proposed acquisition.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act (15 U.S.C. Sec. 15) provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorney's fees. Entry of the proposed Final Judgment neither will
impair nor assist the bringing of any private antitrust damage action.
Under the provision of Section 5(a) of the Clayton Act (15 U.S.C.
Sec. 16(a)), the proposed Final Judgment has no prima facie effectg in
any subsequent private lawsuit that may be brought against Cargill and
Akzo.
V. Procedures Available for Modification of the Proposed Final Judgment
The parties have stipulated that the proposed Final Judgment may be
entered by the Court after compliance with the provisions of the APPA,
provided that the United States has not withdrawn its consent. The APPA
conditions the entry of the decree on the Court's determination that
the proposed Final Judgment is in the public interest.
The APPA provides a period of at least sixty (60) days preceding
the effective date of the proposed Final Judgment within which any
person may submit to the United States written comments regarding the
proposed Final Judgment. Any person should comment within sixty (60)
days of the date of publication of this Competitive Impact Statement in
the Federal Register. The United States will evaluate and respond to
the comments. All comments will be given due consideration by the
Department of Justice, which remains free to withdraw its consent to
the proposed Final Judgment at any time prior to entry. The comments
and the response of the United States will be filed with the Court and
published in the Federal Register.
Written comments should be submitted to: J. Robert Kramer II,
Chief, Litigation II Section, Antitrust Division, United States
Department of Justice, 1401 H Street, NW., Suite 3000, Washington, D.C.
20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification
interpretation, or enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
The United States considered, as an alternative to the proposed
Final Judgment, a full trial on the merits of its Complaint against the
defendants. The United States is satisfied, however, that the
divestiture of the assets and other relief contained in the proposed
Final Judgment will preserve viable competition in the manufacture and
sale of food grade evaporated salt and bulk deicing salt in the
relevant geographic markets that otherwise would be affected adversely
by the acquisition. Thus, the proposed Final Judgment would achieve the
relief the federal and state governments would have obtained through
litigation, but avoids the time, expense and uncertainty a full trial
on the merits of the governments' Complaint.
VII. Standard of Review Under the AAPA for Proposed Final Judgment
The APPA requires that proposed consent judgments in antitrust
cases brought by the United States be subject to a sixty (60) day
comment period, after which the court shall determine whether entry of
the proposed Final Judgment ``is in the public interest.'' In making
that determination, the court may consider--
(1) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration or relief sought, anticipated effects of
alternative remedies actually considered, and any other
considerations bearing upon the adequacy of such judgment;
(2) the impact of entry of such judgment upon the public
generally and individuals alleging specific injury from the
violations set forth in the complaint including consideration of the
public benefit, it any, to be derived from a determination of the
issues at trial.
15 U.S.C. Sec. 16 (e) (emphasis added). As the Court of Appeals for the
District of Columbia Circuit recently held, the APPA permits a court to
consider, among other things, the relationship between the remedy
secured and the specific allegations set forth in the government's
complaint, whether the decree is sufficiently clear, whether
enforcement mechanisms are sufficient, and whether the decree may
positively harm third parties. See United States v. Microsoft, 56 F.3d
1448 (D.C. Cir 1995).
[[Page 26568]]
In conducting this inquiry, ``the Court is nowhere compelled to go
to trial or to engage in extended proceedings which might have the
effect of vitiating the benefits of prompt and less costly settlement
through the consent decree process.'' 119 Cong. Rec. 24598 (1973).
Rather,
absent a showing of corrupt failure of the government to discharge
its duty, the Court, in making its public interest finding, should *
* * carefully consider the explanations of the government in the
competitive impact statement and its response to comments in order
to determine whether those explanations are reasonable under the
circumstances.
United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. (CCH)
para.61,508, at 71,980 (W.D. Mo. 1977).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988), quoting United States v. Bechtel
Corp., 648 F.2d 660, 666 (9th Cir.) cert. denied, 454 U.S. 1083 (1981);
see also Microsoft, 56 F.3d 1448 (D.C. Cir. 1995). Precedent requires
that:
the balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the public in consenting to
the decree. The court is required to determine not whether a
particular decree is the one that will best serve society, but
whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree. United
States v. Bechtel, 648 F.2d 660, 666 (9th Cir. 1981) (emphasis
added)
the proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate every
anticompetivite effect of a particular practice or whether it mandates
certainty of free competition in the future. Court approval of a final
judgment requires a standard more flexible and less strict than the
standard required for a finding of liability. ``[A] proposed decree
must be approved even if it falls short of the remedy the court would
impose on its own, as long as it falls within the range acceptability
or is `within the reaches of public interest.' '' (citations omitted).
United States v. American Tel. and Tel. Co., 552 F. Supp. 131, 150
(D.D.C. 1982), (aff'd sub nom., Maryland v. United States, 460 U.S.
1001 (1983).
VIII. Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Dated: May 2, 1997.
Respectfully submitted,
Anthony Harris,
Attorney, Department of Justice, Antitrust Division.
Certificate of Service
I, Anthony E. Harris, hereby certify that on May 2, 1997, I caused
copies of the foregoing Revised Competitive Impact Statement to be
served on plaintiffs states of New York and Ohio and Commonwealth of
Pennsylvania, and on defendants Cargill Inc., Akzo Nobel, N.V., Akzo
Nobel, Inc., and Akzo Nobel Salt Inc., and on American Rock Salt
Company, LLC, by mailing the pleading first-class, postage prepaid, to
those parties as follows:
John A. Ioannou, Assistant Attorney General, Antitrust Bureau, Attorney
General's Office, 120 Broadway, Suite 26-01, New York, New York 10271
Counsel for State of New York
Deneice Covert Zeve, Deputy Attorney General, Antitrust Section, Office
of the Attorney General, 14th Floor, Strawberry Square, Harrisburg, PA
17120
Counsel for Commonwealth of Pennsylvania
Mitchell Gentile, Assistant Attorney General, Ohio Attorney General's
Office, 30 East Broad Street, 16th Floor, Columbus, OH 43215
Counsel for State of Ohio
Marc G. Schildkraut, Esquire, Howrey & Simon, 1299 Pennsylvania Avenue,
NW., Washington, DC 20004-2402
Counsel for Cargill Inc.
John W. Behan, Assistant General Counsel, Akzo Nobel Inc., 7
Livingstone Avenue, Dobbs Ferry, NY 10522-2222
Counsel for Akzo Nobel, N.V., Akzo Nobel Inc. and Akzo Nobel Salt Inc.
Gunther K. Buerman, Esquire, Harris, Beach & Wilcox, 130 E. Main
Street, Rochester, NY 14604
Counsel for American Rock Salt Company, LLC
Anthony E. Harris, Esquire,
Trial Attorney.
[FR Doc. 97-12568 Filed 5-13-97; 8:45 am]
BILLING CODE 4410-11-M