[Federal Register Volume 63, Number 129 (Tuesday, July 7, 1998)]
[Notices]
[Pages 36693-36694]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17933]


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FEDERAL TRADE COMMISSION

[File No. 981-0173]


Global Industrial Technologies, Inc.; Analysis to Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before September 8, 1998.

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: Joseph Krauss, FTC/H-383, Washington, 
D.C. 20580. (202) 326-2713.

SUPPLEMENTARY INFORMATION: Pusuant 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 above-captioned 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. The following Analysis to Aid Public 
Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for June 26, 1998), on the World Wide Web, at ``http://www.ftc.gov/os/
actions97.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, N.W., 
Washington, D.C. 20580, either in person or by calling (202)326-3627. 
Public comment is invited. Such commenters 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)).

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Order 
(``Agreement'') from Global Industrial Technologies, Inc. (``proposed 
respondent'').
    The proposed Order has been placed on the public record for sixty 
(60) days for reception of comments by interested persons. Comments 
received during this period will become part of the public record. 
After sixty (60) 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 proposed Order.
    The Commission's investigation of this matter concerns the proposed 
acquisition by Global of all of the outstanding shares of AP Green 
Industries, Inc. (``AP Green'') through a cash tender offer. Global and 
AP Green are two leading U.S. manufacturers of refractories. 
Refractories are heat-resistant materials used to line furnaces in 
industries that involve the heating or containment of solids, liquids, 
or gases at high temperatures. The Commission's proposed complaint 
alleges that Global and AP Green compete with each other in the United 
States market for glass-furnace silica refractories. Glass-furnace 
silica refractories are used in the glass industry to build the roofs 
and other portions of glass-melting furnaces.
    The Agreement Containing Consent Order would, if finally accepted 
by the Commission, settle charges that the acquisition may 
substantially lessen competition in the production and sale of glass-
furnace silica refractories in the United States and lead to a monopoly 
in that line of commerce. The Commission has reason to believe that the 
acquisition agreement violates Section 5 of the Federal Trade 
Commission Act and the acquisition would have anticompetitive effects 
and would violate Section 7 of the Clayton Act and Section 5 of the 
Federal Trade Commission Act if consummated, unless an effective remedy 
eliminates such anticompetitive effects.
    The Commission's Complaint alleges that glass-furnace silica 
refractories provide unique characteristics, and that as a result, the 
use of these materials would not be diminished by even a large price 
increase. The Complaint further alleges that imports of glass-furnace 
silica refractories are small.

[[Page 36694]]

Global and AP Green are the only two producers of glass-furnace silica 
refractories in the United States, and entry of other producers is 
unlikely and would be time consuming. The Commission's Complaint 
alleges that the proposed acquisition, which would result in a monopoly 
in the United States, would lessen competition by eliminating 
competition between Global and AP Green, and would lead to higher 
prices and less product innovation.
    The proposed Order accepted for public comment contains provisions 
that would require Global to divest AP Green's glass-furnace silica 
refractories business to Robert R. Worthen and Dennis R. Williams 
(jointly or through a corporation called Utah Refractories Corp.) in a 
manner that receives the prior approval of the Commission within 30 
days of the date the proposed Order was accepted for public comment, or 
if such divestiture fails, to another buyer that receives the prior 
approval of the Commission in a manner that receives the prior approval 
of the Commission within 90 days of the date the proposed Order was 
accepted for public comment. The divestiture includes the AP Green 
manufacturing plant located in Lehi, Utah, where AP Green produces 
silica refractories, together with the sources of raw materials used to 
manufacture silica refractories and all other assets relating to the 
research, development, production, sale, or distribution of silica 
refractories, but excluding AP Green's manufacturing facility in 
Sproul, Pennsylvania. Global's divestiture of the AP Green silica 
refractories business, if completed, would satisfy the requirements of 
the Order and remedy the lessening of competition alleged in the 
Complaint.
    If Global fails to divest AP Green's silica refractories business 
within 90 days of the date the proposed Order was accepted for public 
comment, then the Commission may appoint a trustee to divest AP Green's 
silica refractories business, or, at the option of the trustee, 
Global's Northeast, Maryland manufacturing plant, where Global produces 
silica refractories, together with the sources of raw materials used to 
manufacture silica refractories and all other assets relating to the 
research, development, production, sale, or distribution of silica 
refractories, but excluding Global's manufacturing facility in Calhoun, 
Georgia.
    The Order also contains a provision requiring Global to maintain 
the viability and marketability of the Global and AP Green silica 
refractories businesses pending the divestiture.
    The consent is crafted to preserve the current competitive state of 
the U.S. market for glass-furnace silica refractories. The consent will 
maintain the AP Green silica plant as an independent supplier of glass-
furnace silica refractories for U.S. customers. Thus, there will 
continue to be two domestic sources of the product, as there were prior 
to the proposed merger.
    The purpose of this analysis is to facilitate public comment on the 
proposed Order. Comments should also be directed to whether the pre-
approved buyers, Robert R. Worthen and Dennis R. Williams and their 
corporation, Utah Refractories Corp., will be financially viable and 
able to replace the competition lost by this acquisition. This analysis 
is not intended to constitute an official interpretation of the 
Agreement or the proposed Order or in any way to modify the terms of 
the Agreement or the proposed Order.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 98-17933 Filed 7-6-98; 8:45 am]
BILLING CODE 6750-01-M