[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,

[[Page 38747]]

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