[Federal Register Volume 64, Number 97 (Thursday, May 20, 1999)]
[Notices]
[Pages 27547-27548]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12661]


-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 9810327]


Quexco Incorporated; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

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 July 19, 1999.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: Philip Eisenstat, FTC/S-3627, 601 
Pennsylvania Avenue, N.W., Washington, D.C. 20580, (202) 326-2769.

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 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 May 14th, 1999), 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, 600 Pennsylvania Avenue, N.W., Washington, 
D.C. 20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Avenue, N.W., 
Washington, D.C. 20580. Two paper copies of each comment should be 
filed, and should be accompanied, if possible, by a 3\1/2\ inch 
diskette containing an electronic copy of the comment. 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).

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 Quexco Incorporated (``Quexco'') relating to a 
proposed acquisition by Quexco of Pacific Dunlop GNB Corporation 
(``GNB'').
    The proposed Consent 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.
    Both Quexco, a Delaware corporation, and GNB, also a Delaware 
corporation, operate secondary lead smelters. Secondary lead smelters 
are facilities that recyle products containing lead, such as old lead-
acid batteries and other lead bearing products, into pure lead or lead 
alloys that can be used again by batter manufacturers and other 
industries. The output of secondary smelters is called secondary lead. 
Primary lead smelters use lead bearing ore to produce pure lead or lead 
alloys. The output of primary smelters is called primary lead. For most 
uses for lead, either primary or secondary lead can be used.

The Proposed Complaint

    The proposed complaint alleges that the relevant geographic market 
for evaluating the acquisition's effect in the relevant product markets 
is California, and that the proposed acquisition may substantially 
lessen competition in the smelting and refining of lead in California 
and in providing lead recycling services in California.
    The proposed complaint alleges that Quexco and GNB are the only two 
operators of lead smelters in California and the only two firms that 
perform lead recycling in California. The complaint further alleges 
that the proposed transaction would create a monopoly and give Quexco 
the ability to unilaterally exercise market power.
    The proposed complaint alleges that entry into the alleged markets 
would not be timely, likely, or sufficient to deter or offset the 
adverse effects of the acquisition on competition in these markets. 
Lead is a toxic substance. Construction of a new secondary lead smelter 
requires extensive permits before construction on a smelter could 
begin. Obtaining permits for a new smelter in California would take 
more than two years. Because lead is a toxic substance, community 
opposition is likely to any new smelters in California, and such 
community opposition may prevent the opening of any new smelters in 
California.
    The proposed Order would remedy the alleged violation by preserving 
the competition that would otherwise be lost as a result of Quexco's 
acquisition of GNB. The proposed Order requires Quexco to divest the 
GNB secondary smelter in California to Gopher Resources, Inc. 
(``Gopher''), under the terms of a contract for the sale of that plant 
between Quexco and Gopher. The proposed Order allows Quexco to complete 
its acquisition of GNB during the sixty (60) day comment period, but 
requires that the GNB California smelter be held separate until the 
Order becomes final and then requires the sale of the smelter to Gopher 
within 10 days of the Order being made final by the Commission.
    The sale of the GNB smelter to Gopher is subject to the approval by 
the Commission. If the sale to Gopher is not approved by the 
Commission, then Quexco must rescind the transaction with Gopher and 
divest the GNB

[[Page 27548]]

smelter, within six (6) months after the date on which the Order 
becomes final, to an acquirer and in a manner that receives the prior 
approval of the Commission.
    The purpose of this analysis is to facilitate public comment on the 
proposed Order. 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.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 99-12661 Filed 5-19-99; 8:45 am]
BILLING CODE 6750-01-M