[Federal Register Volume 61, Number 144 (Thursday, July 25, 1996)]
[Notices]
[Pages 38741-38747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18857]
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FEDERAL TRADE COMMISSION
[File No. 961-0052]
Koninklijke Ahold NV; Ahold USA, Inc.; Proposed Consent Agreement
With Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair or deceptive acts or practices and unfair methods of
competition, this consent agreement, accepted subject to final
Commission approval, would require, among other things, the Atlanta-
based supermarket chain owner to divest a total of 30 supermarkets or
supermarket properties in 14 communities throughout Connecticut, Rhode
Island, and Massachusetts within 30 days of the Commission's final
approval of this settlement. The consent agreement settles allegations
that Ahold's acquisition of The Stop & Shop Companies, Inc. would
violate antitrust laws by substantially lessening supermarket
competition in those areas, possibly resulting in higher prices or
reduced quality and selection for consumers.
DATES: Comments must be received on or before September 23, 1996.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.
FOR FURTHER INFORMATION CONTACT:
William Baer, Federal Trade Commission, 6th and Pennsylvania Avenue,
NW, H-374, Washington, DC 20580. (202) 326-2932.
George Cary, Federal Trade Commission, 6th and Pennsylvania Avenue, NW,
H-374, Washington, DC 20580. (202) 326-3741.
SUPPLEMENTARY INFORMATION Pursuant to Section 6(f) of the Federal Trade
Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of the
Commission's Rules of Practice (16 CFR 2.34), notice is hereby given
that the following consent agreement containing a consent order to
cease and desist, having been filed with and accepted, subject to final
approval, by the Commission, has been placed on the public record for a
period of sixty (60) days. Public comment is invited. Such comments or
views will be considered by the Commission and will be available for
inspection and copying at its principal office in accordance with
Section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR
4.9(b)(6)(ii)).
Agreement Containing Consent Order
The Federal Trade Commission (``Commission''), having initiated an
investigation of the proposed acquisition of The Stop & Shop Companies,
Inc. (``Stop & Shop'') by Koninklijke Ahold nv (``Royal Ahold'') and
Ahold USA, Inc. (``Ahold USA''), and it now appearing that Royal Ahold
and Ahold USA, hereinafter sometimes referred to as ``Proposed
Respondents,''
[[Page 38742]]
are willing to enter into an agreement containing an Order to divest
certain assets and to cease and desist from certain acts, and providing
for other relief:
It is hereby agreed by and between Proposed Respondents, by their
duly authorized officers and attorneys, and counsel for the Commission
that:
1. Proposed Respondent Koninklijke Ahold nv is a corporation
organized, existing, and doing business under and by virtue of the laws
of The Netherlands, with its office and principal place of business
located at Albert Heijnweg 1, 1507 EH Zaandam, The Netherlands.
2. Proposed Respondent Ahold USA, Inc., is a corporation organized,
existing, and doing business under and by virtue of the laws of
Delaware, with its office and principal place of business located at
executive offices at One Atlanta Plaza, 950 East Paces Ferry Road,
Suite 2575, Atlanta, Georgia 30326.
3. Proposed Respondents admit all the jurisdictional facts set
forth in the draft of complaint.
4. Proposed Respondents waive:
a. Any further procedural steps;
b. The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
c. All rights to seek judicial review or otherwise to challenge or
contest the validity of the Order entered pursuant to this agreement;
and
d. Any claim under the Equal Access to Justice Act.
5. This agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this
agreement is accepted by the Commission it, together with the draft of
complaint contemplated thereby, will be placed on the public record for
a period of sixty (60) days and information in respect thereto publicly
released. The Commission thereafter may either withdraw its acceptance
of this agreement and so notify the Proposed Respondents, in which
event it will take such action as it may consider appropriate, or issue
and serve its complaint (in such form as the circumstances may require)
and decision, in disposition of the proceeding.
6. This agreement is for settlement purposes only and does not
constitute an admission by Proposed Respondents that the law has been
violated as alleged in the draft of the complaint, or that the facts as
alleged in the draft complaint, other than jurisdictional facts, are
true.
7. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Section 2.34 of the
Commission's Rules, the Commission may, without further notice to the
Proposed Respondents, (1) issue its complaint corresponding in form and
substance with the draft of complaint and its decision containing the
following Order to divest (as modified by any approved final purchase
and sale agreements) and to cease and desist in disposition of the
proceeding, and (2) make information public with respect thereto. When
so entered, the Order shall have the same force and effect and may be
altered, modified, or set aside in the same time provided by statute
for other orders. The Order shall become final upon service. Delivery
by the United States Postal Service of the complaint and decision
containing the agreed-to Order to Proposed Respondents' counsel, Robert
D. Paul, Esq., White & Case, 601 13th Street, N.W., Suite 600 South,
Washington, D.C. 20005, shall constitute service. Proposed Respondents
waive any right they may have to any other manner of service. The
complaint may be used in construing the terms of the Order, and no
agreement, understanding, representation, or interpretation not
contained in the Order or the Agreement may be used to vary or
contradict the terms of the Order.
8. Proposed Respondents have read the proposed complaint and Order
contemplated hereby. Proposed Respondents understand that once the
Order has been issued, they will be required to file verified written
reports showing that they have fully complied with the Order. Proposed
Respondents further understand that they may be liable for civil
penalties in the amount provided by law for each violation of the Order
after it becomes final.
Order
I
It is ordered that, as used in this Order, the following
definitions shall apply:
A. ``Royal Ahold'' means Koninklijke Ahold nv, its predecessors,
subsidiaries, divisions, and groups and affiliates controlled by
Koninklijke Ahold nv, their successors and assigns, and their
directors, officers, employees, agents, and representatives.
B. ``Ahold USA'' means Ahold USA, Inc., its predecessors,
subsidiaries, divisions, and groups and affiliates controlled by Ahold
USA, Inc., their successors and assigns, and their directors, officers,
employees, agents, and representatives.
C. ``Respondents'' means Royal Ahold and Ahold USA.
D. ``Assets to be Divested'' means the supermarkets identified in
Paragraph II.A. of this Order as well as the supermarket business
operated, and all assets, leases, properties, business and goodwill,
tangible and intangible, utilized in the supermarket operations at
those locations, but need not include the ``Stop & Shop'' or
``Edwards'' trade names, trade dress, trade marks, service marks, and
such other intangible assets that Respondents also utilize in their
business at locations other than those identified in Paragraph II.A. of
this Order.
E. ``Commission'' means the Federal Trade Commission.
F. ``Acquisition'' means Royal Ahold's proposed purchase of all the
voting stock of Stop & Shop pursuant to an agreement dated on or about
March 27, 1996.
G. ``Supermarket'' means a full-line retail grocery store with
annual sales of at least two million dollars that carries a wide
variety of food and grocery items in particular product categories,
including bread and dairy products; refrigerated and frozen food and
beverage products; fresh and prepared meats and poultry; produce,
including fresh fruits and vegetables; shelf-stable food and beverage
products, including canned and other types of packaged products; staple
foodstuffs, which may include salt, sugar, flour, sauces, spices,
coffee, and tea; and other grocery products, including nonfood items
such as soaps, detergents, paper goods, and other household products.
H. ``Overlap Areas'' means the following incorporated towns and
cities:
(a) New Milford, Connecticut;
(b) Windham and Mansfield, Connecticut;
(c) Wallingford and Meriden, Connecticut;
(d) Waterbury, Watertown, and Naugatuck, Connecticut;
(e) ``The greater Hartford, Connecticut, area,'' which includes
Hartford, New Britain, Newington, Wethersfield, Farmington, West
Hartford, Bloomfield, Windsor, South Windsor, East Hartford,
Manchester, Glastonbury, and Vernon, Connecticut;
(f) Avon and Simsbury, Connecticut;
(g) Enfield, Somers, East Windsor, Suffield, and Windsor Locks,
Connecticut;
(h) Southington and Plainville, Connecticut;
(i) Milford, Orange, West Haven, and New Haven, Connecticut;
(j) East Haven, Branford, Guilford, Madison, Clinton, and Old
Saybrook, Connecticut;
[[Page 38743]]
(k) Fairfield, Stratford, Bridgeport, Trumbull, and Shelton,
Connecticut;
(l) South Kingstown and Narragansett, Rhode Island;
(m) ``The greater Providence, Rhode Island, area,'' which includes
East Providence, Providence, Pawtucket, Warwick, Cranston, Central
Falls, Lincoln, Smithfield, Barrington, Bristol, Cumberland, North
Providence, Johnston, West Warwick, East Greenwich, and Coventry, Rhode
Island; and Attleboro and Seekonk, Massachusetts; and
(n) ``The greater Springfield, Massachusetts, area,'' which
includes Springfield, West Springfield, South Hadley, Chicopee,
Westfield, Holyoke, Agawam, Southwick, Longmeadow, and East Longmeadow,
Massachusetts.
II
It is further ordered that:
A. Respondents shall divest, absolutely and in good faith, within
thirty (30) days from the date this Order becomes final:
(1) To Star Markets Company, pursuant to a letter of intent dated
July 2, 1996:
(a) Edwards supermarket number 821 located at 295 Armistice
Boulevard, Pawtucket, RI;
(b) Edwards supermarket number 751 located at 200 Niantic Avenue,
Providence, RI;
(c) Edwards supermarket number 815 located at 1810 Plainfield Pike,
Cranston, RI;
(d) Edwards supermarket number 817 located at 418 Kingstown Road,
Wakefield, RI;
(e) Edwards supermarket number 779 located at 1401 Bald Hill Road,
Warwick, RI;
(f) Edwards supermarket number 820 located at 1000 Division Street,
East Greenwich, RI; and
(g) Stop & Shop supermarket number 458 located at Route 6 & 1
Commercial Way, Seekonk, MA.
(2) To Bozzuto's Inc., pursuant to a letter of intent dated July 1,
1996:
(a) Edwards supermarket number 295 located at 207 Hartford
Turnpike, Vernon, CT;
(b) Edwards supermarket number 362 located at Newbrite Plaza, 60
East Main Street, New Britain, CT;
(c) Edwards supermarket number 748 located at 333 North Main
Street, West Hartford, CT; and
(d) Edwards supermarket number 768 located at 750 Queen Street,
Southington, CT.
(3) To Shaw's Supermarkets, Inc., pursuant to a letter of intent
dated July 2, 1996:
(a) Edwards supermarket number 725 located at 40 Hazard Avenue,
Enfield, CT;
(b) Edwards supermarket number 742 located at 953 Wolcott Road,
Waterbury, CT;
(c) Edwards supermarket number 758 located at 538 Boston Post Road,
Orange, CT;
(d) Edwards supermarket number 773 located at 875 Bridgeport
Avenue, Shelton, CT;
(e) Stop & Shop supermarket number 665 located at 55 Welles Street,
Glastonbury, CT;
(f) Edwards lease agreement for premises located in the former
Rich's Department Store, Wakefield Mall, Tower Hill Road, South
Kingstown, RI;
(g) Edwards supermarket number 312 located at 1100 Barnum Avenue,
Stratford, CT;
(h) Edwards lease agreement for the former Grand Union store site
located at 800 Barnum Avenue, Stratford, CT;
(i) Edwards supermarket number 200 located at 1975 Black Rock
Turnpike, Fairfield, CT;
(j) Edwards supermarket number 299 located at 1167 Main Street,
Watertown, CT;
(k) Edwards supermarket number 823 located at 266 East Main Street,
Clinton, CT;
(l) Edwards supermarket number 749 located at 60 Cantor Drive,
Willimantic, CT;
(m) Edwards supermarket number 783 located at 245 Kane Street, West
Hartford, CT; and
(n) Edwards supermarket number 317 located at 976 North Colony
Road, Wallingford, CT.
(4) To Big Y Foods, Inc., pursuant to a letter of intent dated June
7, 1996, as modified by letters of July 2, 1996:
(a) Edwards supermarket number 728 located at 830 Boston Post Road,
Guilford, CT;
(b) Edwards supermarket number 722 located at 650 Memorial Drive,
Chicopee, MA;
(c) Edwards supermarket number 704 located at West Main Route 44,
Avon, CT;
(d) Edwards supermarket number 368 located at 3 Kent Road, New
Milford, CT; and
(e) Edwards supermarket number 329 located at 265 Ellington Road,
East Hartford, CT.
B. If Respondents have not divested the Assets to be Divested
pursuant to Paragraph II.A., Respondents shall divest the Assets to be
Divested within thirty (30) days from the date this Order becomes final
to an acquirer or acquirers that receive the prior approval of the
Commission and only in a manner that receives the prior approval of the
Commission.
C. The purpose of the divestiture of the Assets to be Divested is
to ensure the continuation of the Assets to be Divested as ongoing
viable enterprises engaged in the Supermarket business and to remedy
any lessening of competition resulting from the Acquisition as alleged
in the Commission's complaint.
III
It is further ordered that:
A. If Respondents have not divested absolutely and in good faith
the Assets to be Divested pursuant to Paragraph II. of this Order, the
Commission may appoint a trustee to divest the Assets to be Divested.
In the event that the Commission brings an action pursuant to Sec. 5(l)
of the Federal Trade Commission Act, 15 U.S.C. Sec. 45(l), or any other
statute enforced by the Commission, Respondents shall consent to the
appointment of a trustee in such action. Neither the appointment of a
trustee nor a decision not to appoint a trustee under this Paragraph
shall preclude the Commission from seeking civil penalties or any other
relief available to it, including a court-appointed trustee pursuant to
Sec. 5(l) of the Federal Trade Commission Act, or any other statute
enforced by the Commission, for any failure by Respondents to comply
with this Order.
B. If a trustee is appointed by the Commission or a court pursuant
to Paragraph III.A. of this Order, Respondents shall consent to the
following terms and conditions regarding the trustee's powers, duties,
authority, and responsibilities:
1. The Commission shall select the trustee, subject to the consent
of Respondents, which consent shall not be unreasonably withheld. The
trustee shall be a person with experience and expertise in acquisitions
and divestitures. If Respondents have not opposed, in writing,
including the reasons for opposing, the selection of any proposed
trustee within ten (10) days after receipt of written notice by the
staff of the Commission to Respondents of the identity of any proposed
trustee, Respondents shall be deemed to have consented to the selection
of the proposed trustee.
2. Subject to the prior approval of the Commission, the trustee
shall have the exclusive power and authority to divest the Assets to be
Divested.
3. Within ten (10) days after appointment of the trustee,
Respondents shall execute a trust agreement that, subject to the prior
approval of the Commission, and in the case of a court-
[[Page 38744]]
appointed trustee, of the court, transfers to the trustee all rights
and powers necessary to permit the trustee to effect the divestiture
required by this Order.
4. The trustee shall have twelve (12) months from the date the
Commission approves the trust agreement described in Paragraph III.B.3.
to accomplish the divestiture, which shall be subject to the prior
approval of the Commission. If, however, at the end of the twelve (12)
month period, the trustee has submitted a plan of divestiture or
believes that divestiture can be achieved within a reasonable time, the
divestiture period may be extended by the Commission, or in the case of
a court-appointed trustee, by the court; provided, however, the
Commission may extend this period only two (2) times for up to six (6)
months each time.
5. The trustee shall have full and complete access to the Assets to
be Divested and to the personnel, books, records and facilities related
to the Assets to be Divested or to any other relevant information, as
the trustee may reasonably request. Respondents shall develop such
financial or other information as such trustee may reasonably request
and shall cooperate with the trustee. Respondents shall take no action
to interfere with or impede the trustee's accomplishment of the
divestiture. Any delays in divestiture caused by Respondents shall
extend the time for divestiture under this Paragraph in an amount equal
to the delay, as determined by the Commission or, for a court-appointed
trustee, by the court.
6. The trustee shall use his or her best efforts to negotiate the
most favorable price and terms available in each contract that is
submitted to the Commission, subject to Respondents' absolute and
unconditional obligation to divest at no minimum price. The
divestitures shall be made to an acquirer or acquirers that receive the
prior approval of the Commission and only in a manner that receives the
prior approval of the Commission. In the event that the trustee
receives bona fide offers from more than one acquiring entity, the
trustee shall submit all such bids to the Commission, and if the
Commission determines to approve more than one such acquiring entity
for the Assets to be Divested, the trustee shall divest to the
acquiring entity or entities selected by Respondents from among those
approved by the Commission.
7. In the event the trustee determines that he or she is unable to
divest the Assets to be Divested as described in Paragraph II in a
manner consistent with the terms of this Order, the trustee may on his
or her own initiative, or at the direction of the Commission, divest
any additional or substitute supermarkets of the Respondents located in
the respective overlap areas and effect such arrangements as are
necessary to satisfy the requirements of this Order.
8. The trustee shall serve, without bond or other security, at the
cost and expense of Respondents, on such reasonable and customary terms
and conditions as the Commission or a court may set. The trustee shall
have the authority to employ, at the cost and expense of Respondents,
and at reasonable fees, such consultants, accountants, attorneys,
investment bankers, business brokers, appraisers, and other
representatives and assistants as are necessary to carry out the
trustee's duties and responsibilities. The trustee shall account for
all monies derived from the divestiture and all expenses incurred.
After approval by the Commission and, in the case of a court-appointed
trustee, by the court, of the account of the trustee, including fees
for his or her services, all remaining monies shall be paid at the
direction of the Respondents, and the trustee's power shall be
terminated. The trustee's compensation shall be based at least in
significant part on a commission arrangement contingent on the
trustee's divesting the Assets to be Divested, and may include an
incentive arrangement relating to price.
9. Respondents shall indemnify the trustee and hold the trustee
harmless against any losses, claims, damages, liabilities, or expenses
arising out of, or in connection with, the performance of the trustee's
duties, all reasonable fees of counsel and other expenses incurred in
connection with the preparation for, or defense of any claim, whether
or not resulting in any liability, except to the extent that such
liabilities, losses, damages, claims, or expenses result from
misfeasance, gross negligence, willful or wanton acts, or bad faith by
the trustee.
10. If the trustee ceases to act or fails to act diligently, a
substitute trustee shall be appointed in the same manner as provided in
Paragraph III.A. of this Order.
11. The Commission or, in the case of a court-appointed trustee,
the court, may on its own initiative or at the request of the trustee
issue such additional Orders or directions as may be reasonably
necessary or appropriate to accomplish the divestiture required by this
Order.
12. The trustee shall have no obligation or authority to operate or
maintain the Assets to be Divested.
13. The trustee shall report in writing to Respondents and the
Commission every forty-five (45) days concerning the trustee's efforts
to accomplish divestiture.
IV
It is further ordered that:
A. Pending divestiture of the Assets to be Divested, Respondents
shall take such actions as are necessary to maintain the viability,
competitiveness, and marketability of the Assets to be Divested
consistent with Paragraphs II. and III. of this Order and to prevent
the destruction, removal, wasting, deterioration, or impairment of the
Assets to be Divested except in the ordinary course of business and
except for ordinary wear and tear.
B. Respondents shall comply with all the terms of the Asset
Maintenance Agreement attached to this Order and made a part hereof as
Appendix I. The Asset Maintenance Agreement shall continue in effect
until such time as all Assets to be Divested have been divested as
required by this Order.
V
It is further ordered that, for a period of ten (10) years from the
date this Order becomes final, Respondents shall not, without providing
advance written notification to the Commission, directly or indirectly,
through subsidiaries, partnerships, or otherwise:
A. Acquire any ownership or leasehold interest in any facility that
has operated as a supermarket within six (6) months of the date of such
proposed acquisition in the Overlap Areas; or
B. Acquire any stock, share capital, equity, or other interest in
any entity that owns any interest in or operates any supermarket or
owned any interest in or operated any supermarket within six (6) months
of such proposed acquisition in the Overlap Areas.
Provided, however, that advance written notification shall not
apply to the construction of new facilities by Respondents or the
acquisition of or leasing of a facility that has not operated as a
supermarket within six (6) months of Respondents' offer to purchase or
lease.
Said notification shall be given on the Notification and Report
Form set forth in the Appendix to Part 803 of Title 16 of the Code of
Federal Regulations as amended (hereinafter referred to as ``the
Notification''), and shall be prepared and transmitted in accordance
with the requirements of that part, except that no filing fee will be
required for the Notification. The Notification shall be filed with the
Secretary of the Commission and need not be made to
[[Page 38745]]
the United States Department of Justice. The Notification is required
only of Respondents and not of any other party to the transaction.
Respondents shall provide the Notification to the Commission at least
thirty days prior to acquiring any such interest (hereinafter referred
to as the ``first waiting period''). If, within the first waiting
period, representatives of the Commission make a written request for
additional information, Respondents shall not consummate the
transaction until twenty days after substantially complying with such
request for additional information. Early termination of the waiting
periods in this Paragraph may be requested and, where appropriate,
granted by letter from the Bureau of Competition. Provided, however,
that prior notification shall not be required by this Paragraph for a
transaction for which notification is required to be made, and has been
made, pursuant to Section 7A of the Clayton Act, 15 U.S.C. Sec. 18a.
VI
It is further ordered that Respondents shall be bound by the terms
and obligations of the Consent Order issued by the Commission in The
Stop & Shop Companies, Inc., et al., Docket No. C-3649.
VII
It is further ordered that:
A. Within forty-five (45) days after the date this Order becomes
final and every forty-five (45) days thereafter until Respondents have
fully complied with the provisions of Paragraphs II. or III. of this
Order, Respondents shall submit to the Commission verified written
reports setting forth in detail the manner and form in which they
intend to comply, are complying, and have complied with Paragraphs II.
and III. Respondents shall include in their compliance reports, among
other things that are required from time to time, a full description of
the efforts being made to comply with Paragraphs II. and III. of the
Order, including a description of proposals for divestitures and the
identity of all parties contacted. Respondents shall include in their
compliance reports copies of all written communications to and from
such parties concerning divestiture.
B. One year (1) from the date this Order becomes final, annually
for the next nine (9) years on the anniversary of the date this Order
becomes final, and at other times as the Commission may require,
Respondents shall file verified written reports with the Commission
setting forth in detail the manner and form in which they have complied
and are complying with this Order.
VIII
It is further ordered that Respondents shall notify the Commission
at least thirty (30) days prior to any proposed change in Respondents
such as dissolution, assignment, sale resulting in the emergence of a
successor corporation to Respondents, or the creation or dissolution of
subsidiaries or any other change in Respondents that may affect
compliance obligations arising out of the Order.
IX
It is further ordered that, for the purpose of determining or
securing compliance with this Order, Respondents shall permit any duly
authorized representative of the Commission:
A. Upon five days' written notice to Respondents, access, during
office hours and in the presence of counsel, to inspect and copy all
books, ledgers, accounts, correspondence, memoranda and other records
and documents in the possession or under the control of Respondents
relating to any matters contained in this Order; and
B. Upon five days' written notice to Respondents and without
restraint or interference from Respondents, to interview Respondents or
officers, directors, or employees of Respondents in the presence of
counsel.
Appendix I
Asset Maintenance Agreement
This Asset Maintenance Agreement (``Agreement'') is by and
between Koninklijke Ahold nv (``Royal Ahold''), a corporation
organized, existing, and doing business under and by virtue of the
laws of The Netherlands, with its office and principal place of
business located at Albert Heijnweg 1, 1507 EH Zaandam, The
Netherlands; Ahold USA, Inc. (``Ahold USA''), a corporation
organized, existing, and doing business under and by virtue of the
laws of Delaware, with its office and principal place of business
located at One Atlanta Plaza, 950 East Paces Ferry Road, Suite 2575,
Atlanta, GA 30326; and the Federal Trade Commission
(``Commission''), an independent agency of the United States
Government, established under the Federal Trade Commission Act of
1914, 15 U.S.C. Sec. 41, et seq. (collectively ``the Parties'').
Premises
Whereas, Royal Ahold and Ahold USA, pursuant to an agreement
dated on or about March 27, 1996, agreed to acquire the voting stock
of The Stop & Shop Companies, Inc. (``the Acquisition''); and
Whereas, the Commission is now investigating the Acquisition to
determine if it would violate any of the statutes enforced by the
Commission; and
Whereas, if the Commission accepts the attached Agreement
Containing Consent Order, the Commission is required to place it on
the public record for a period of sixty (60) days for public comment
and may subsequently withdraw such acceptance pursuant to the
provisions of Section 2.34 of the Commission's Rules; and
Whereas, the Commission is concerned that if an agreement is not
reached preserving the status quo ante of the Assets to be Divested
as described in the attached Agreement Containing Consent Order
(``Assets'') during the period prior to their divestitures, any
divestiture resulting from any administrative proceeding challenging
the legality of the Acquisition might not be possible, or might
produce a less than effective remedy; and
Whereas, the Commission is concerned that prior to divestiture
to the acquirer or acquirers, it may be necessary to preserve the
continued viability and competitiveness of the Assets; and
Whereas, the purpose of this Agreement and of the Consent Order
is to preserve the Assets pending the divestitures to the acquirer
or acquirers approved by the Federal Trade Commission under the
terms of the Order, in order to remedy any anticompetitive effects
of the Acquisition; and
Whereas, Royal Ahold and Ahold USA entering into this Agreement
shall in no way be construed as an admission by Royal Ahold or Ahold
USA that the Acquisition is illegal; and
Whereas, Royal Ahold and Ahold USA understand that no act or
transaction contemplated by this Agreement shall be deemed immune or
exempt from the provisions of the antitrust laws or the Federal
Trade Commission Act by reason of anything contained in this
Agreement;
Now, therefore, in consideration of the Commission's agreement
that, unless the Commission determines to reject the Consent Order,
it will not seek further relief from the parties with respect to the
Acquisition, except that the Commission may exercise any and all
rights to enforce this Agreement and the Consent Order annexed
hereto and made a part thereof, the Parties agree as follows:
Terms of Agreement
1. Royal Ahold and Ahold USA agree to execute, and upon its
issuance to be bound by, the attached Consent Order. The Parties
further agree that each term defined in the attached Consent Order
shall have the same meaning in this Agreement.
2. Unless the Commission brings an action to seek to enjoin the
proposed Acquisition pursuant to Section 13(b) of the Federal Trade
Commission Act, 15. U.S.C. Sec. 53(b), and obtains a temporary
restraining order or preliminary injunction blocking the proposed
Acquisition, Royal Ahold and Ahold USA will be free to close the
Acquisition after July 15, 1996.
3. Royal Ahold and Ahold USA agree that from the date this
Agreement is signed until the earlier of the dates listed in
subparagraphs 3.a-3.b, they will comply with the provisions of this
Agreement:
a. three business days after the Commission withdraws its
acceptance of the
[[Page 38746]]
Consent Order pursuant to the provisions of Section 2.34 of the
Commission's Rules; or
b. on the day the divestitures set out in the Consent Order have
been completed.
4. From the time Royal Ahold and Ahold USA acquire The Stop &
Shop Companies, Inc., until the divestiture set out in the Consent
Order has been completed, Royal Ahold and Ahold USA shall maintain
the viability and marketability of the Assets, and shall not cause
the wasting or deterioration of the Assets, nor shall they sell,
transfer, encumber or otherwise impair their marketability or
viability.
5. From the time Royal Ahold and Ahold USA acquire The Stop &
Shop Companies, Inc., until the divestiture set out in the Consent
Order has been completed, Royal Ahold and Ahold USA shall maintain
the competitiveness of the Assets. This includes but is not limited
to the maintaining of promotions and discount policies (e.g., double
and triple coupon policies and store coupon promotions) as well as
the continuation of specific store services (e.g., hours of
operation and operation of specific departments).
6. Should the Commission seek in any proceeding to compel Royal
Ahold and Ahold USA to divest themselves of the Assets or to seek
any other injunctive or equitable relief, Royal Ahold and Ahold USA
shall not raise any objection based upon the expiration of the
applicable Hart-Scott-Rodino Antitrust Improvements Act waiting
period or the fact that the Commission has not sought to enjoin the
Acquisition. Royal Ahold and Ahold USA also waive all rights to
contest the validity of this Agreement.
7. For the purpose of determining or securing compliance with
this Agreement, subject to any legally recognized privilege, and
upon written request with reasonable notice to Royal Ahold or Ahold
USA and to their principal offices, Royal Ahold and Ahold USA shall
permit any duly authorized representative or representatives of the
Commission:
a. Upon three (3) days' notice to Royal Ahold or Ahold USA,
access during the office hours of Royal Ahold or Ahold USA, in the
presence of counsel, to inspect and copy all books, ledgers,
accounts, correspondence, memoranda and other records and documents
in the possession or under the control of Royal Ahold or Ahold USA
relating to compliance with this Agreement; and
b. Upon five (5) days' notice to Royal Ahold or Ahold USA and
without restraint or interference from them, to interview officers
or employees of Royal Ahold or Ahold USA, who may have counsel
present, regarding any such matters.
8. This Agreement shall not be binding until approved by the
Commission.
Analysis To Aid Public Comment on the Provisionally Accepted Consent
Order
The Federal Trade Commission (``the Commission'') has accepted
for public comment, from Koninklijke Ahold nv and Ahold USA, Inc.,
Inc. (collectively referred to as ``Ahold''), an agreement
containing a consent order. The agreement is designed to remedy any
anticompetitive effect stemming from Ahold's proposed acquisition of
The Stop & Shop Companies, Inc. (``Stop & Shop'').
This agreement has been placed on the public record for sixty
days for reception of comments from interested persons. The
Commission is requesting public comment on the entire consent
agreement, including the proposed divestitures as well as the
proposed purchasers of these assets.
Comments received during this period will become part of the
public record. After sixty days, the Commission will again review
the agreement and the comments received and will decide whether it
should withdraw from the agreement or make final the agreement's
order.
Complaint's Allegations
The Commission's proposed complaint alleges that Ahold and Stop
& Shop are direct competitors for the retail sale of food and
grocery items in supermarkets in the market areas of (1) New
Milford, Connecticut; (2) Windham and Mansfield, Connecticut; (3)
Wallingford and Meriden, Connecticut; (4) Waterbury, Watertown and
Naugatuck, Connecticut; (5) the greater Hartford, Connecticut area,
which includes Hartford, New Britain, Newington, Wethersfield,
Farmington, West Hartford, Bloomfield, Windsor, South Windsor, East
Hartford, Manchester, Glastonbury, and Vernon, Connecticut; (6) Avon
and Simbsury, Connecticut; (7) Enfield, Somers, East Windsor,
Suffield, and Windsor Locks, Connecticut; (8) Southington and
Plainville, Connecticut; (9) Milford, Orange, West Haven, and New
Haven, Connecticut; (10) East Haven, Branford, Guilford, Madison,
Clinton, and Old Saybrook, Connecticut; (11) Fairfield, Stratford,
Bridgeport, Trumbull, and Shelton, Connecticut; (12) South Kingstown
and Narrangansett, Rhode Island; (13) the greater Providence, Rhode
Island area, which includes East Providence, Providence, Pawtucket,
Warwick, Cranston, Central Falls, Lincoln, Smithfield, Barrington,
Bristol, Cumberland, North Providence, Johnston, West Warwick, East
Greenwich, and Coventry, Rhode Island and Attleboro and Seekonk,
Massachusetts; and (14) Chicopee, Massachusetts. In these areas, the
proposed acquisition would leave a single firm with a market share
substantially greater than 35 percent and would facilitate
unilateral anticompetitive behavior or coordinated interaction.
According to the draft complaint, these markets are highly
concentrated and entry is difficult or unlikely. The Commission has
reason to believe that the acquisition agreement violates Section 5
of the Federal Trade Commission Act and the acquisition, if
consummated, would have anticompetitive effects and would violate
Section 7 of the Clayton Act and Section 5 of the Federal Trade
Commission Act, unless an effective remedy eliminates such
anticompetitive effects.
Settlement Agreement
The agreement containing consent order would, if finally
accepted by the Commission, settle charges that the acquisition may
substantially lessen competition in the fourteen markets.
Proposed Divestiture and Proposed Purchases of Divested Assets
The agreement containing consent order seeks to remedy the
Commission's competitive concerns about the acquisition by requiring
divestiture of specified stores in each market. As with the recent
consent agreements accepted by the Commission in The Scotts Company
(Docket No. C-3613), Illinois Tool Works, Inc. (Docket No. C-3651),
and most recently Fresenius AG (File No. 961-0053), the proposed
order identifies both the assets to be divested and specific
companies to be recommended to the Commission as purchasers for
these assets. The identification of specific buyers for the assets
to be divested will allow the public to comment on the effectiveness
of the proposed relief in the context of specific proposed
purchasers. It also minimizes the delay in restoring competition
lost by the transaction and lessens the risk of unsuccessful
divestiture.
Under the terms of the proposed order, Ahold must divest to Star
Markets Company (1) its supermarket located at 295 Armistice
Boulevard, Pawtucket, Rhode Island; (2) its supermarket located at
200 Niantic Avenue, Providence, Rhode Island; (3) its supermarket
located at 1810 Plainfield Pike, Cranston, Rhode Island; (4) its
supermarket located at 418 Kingstown Road, Wakefield, Rhode Island;
(5) its supermarket located at 1401 Bald Hill Road, Warwick, Rhode
Island; (6) its supermarket located at 1000 Division Street, East
Greenwich, Rhode Island; and (7) the Stop & Shop supermarket located
at Route 6 and 1 Commercial Way, Seekonk, Massachusetts. Star
Markets Company, Inc., is a corporation with headquarters at 625 Mt.
Auburn Street, Cambridge, Massachusetts.
Under the terms of the proposed order, Ahold must also divest to
Bozzuto's Inc. (1) its supermarket located at 207 Hartford Turnpike,
Vernon, Connecticut; (2) its supermarket located at Newbrite Plaza,
60 East Main Street, New Britain, Connecticut; (3) its supermarket
located at 333 North Main Street, West Hartford, Connecticut; and
(4) its supermarket located at 750 Queen Street, Southington,
Connecticut. Bozzuto's Inc. is a corporation with headquarters at
275 Schoolhouse Road, Cheshire, Connecticut.
Under the terms of the proposed order, Ahold must also divest to
Shaw's Supermarkets, Inc. (1) its supermarket located at 40 Hazard
Avenue, Enfield, Connecticut; (2) its supermarket located at 953
Wolcott Road, Waterbury, Connecticut; (3) its supermarket located at
538 Boston Post Road, Orange, Connecticut; (4) its supermarket
located at 875 Bridgeport Avenue, Shelton, Connecticut; (5) Stop &
Shop supermarket number 665 located at 55 Welles Street,
Glastonbury, Connecticut; (6) its lease agreement for the premises
located in the former Rich's Department Store located at the
Wakefield Mall, Tower Hill Road, South Kingstown, Rhode Island; (7)
its supermarket located at 1100 Barnum Avenue, Stratford,
Connecticut; (8) its lease agreement for the Grand Union Store site
located at 800 Barnum Avenue, Stratford, Connecticut; (9) its
supermarket located at 1975 Black Rock Turnpike, Fairfield,
Connecticut; (10) its supermarket located at 1167 Main Street,
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Watertown, Connecticut; (11) its supermarket located at 266 East
Main Street, Clinton, Connecticut; (12) its supermarket located 60
Cantor Drive, Willimantic, Connecticut; (13) its supermarket located
at 245 Kane Street, West Hartford, Connecticut; and (14) its
supermarket located at 976 North Colony Road, Wallingford,
Connecticut. Shaw's Supermarkets, Inc., is a corporation with
headquarters at 140 Laurel Street, East Bridgewater, Massachusetts.
Under the terms of the proposed order, Ahold must also divest to
Big Y Foods, Inc. (1) its supermarket located at 830 Boston Post
Road, Guilford, Connecticut; (2) its supermarket located at 650
Memorial Drive, Chicopee, Massachusetts; (3) its supermarket located
at West Main Route 44, Avon, Connecticut; (4) its supermarket
located at 3 Kent Road, New Milford, Connecticut; and (5) its
supermarket located at 265 Ellington Road, East Hartford,
Connecticut. Big Y Foods, Inc., is a corporation with headquarters
at 280 Chestnut Street, Springfield, Massachusetts.
The purpose of the divestitures to these purchasers is to ensure
the continuation of the Assets to be Divested as ongoing viable
enterprises engaged in the supermarket business and to remedy any
lessening of competition resulting from the acquisition as alleged
in the Commission's complaint.
Star, Bozzuto's, Shaw's, and Big Y already own and operate
supermarkets. The management of each company has substantial
experience in the supermarket business. Star and Bozzuto's do not
operate supermarkets in the areas where the stores they are buying
are located. Big Y and Shaw's operate, or will shortly, in a few of
the markets where they are buying divested supermarkets. In these
markets, however, Big Y and Shaw's are not now significant
competitors, and the additional stores will make them more
competitive against the combined Ahold/Stop & Shop.
Under the terms of the proposed order, Ahold must divest the
assets to be divested within thirty (30) days after the proposed
Order is made final by the Commission. Because the proposed order
contemplates divestiture within 30 days to purchasers that have
already been identified to the Commission, and because the proposed
order includes a strong trustee provision and an Asset Maintenance
Agreement, the Commission has not required a hold separate agreement
in this case. Under the proposed order, if any of the divestitures
are not accomplished within 30 days after the order is made final,
then the Commission may appoint a trustee to divest the remaining
assets. The trustee may, on his or her own initiative or at the
direction of the Commission (and subject to Commission approval
after a 30-day public comment period), add or substitute
supermarkets in the overlap areas listed in the order so as to
accomplish the required divestitures. This provision is important to
insure that the divestitures will be made. Ahold is unlikely to
permit the deterioration of any of the supermarkets to be divested,
because to do so could ultimately invite a divestiture trustee to
make a substitution, leaving Ahold with a store that had been
allowed to deteriorate. The fact that the trustee provision can be
invoked quickly, i.e., within 30 days, also gives Ahold an incentive
to complete the divestitures in a timely manner.
The purpose of this analysis is to invite public comment
concerning the proposed order. This analysis is not intended to
constitute an official interpretation of the agreement and order or
to modify their terms in any way.
Donald S. Clark,
Secretary.
[FR Doc. 96-18857 Filed 7-24-96; 8:45 am]
BILLING CODE 6750-01-P