[Federal Register Volume 64, Number 112 (Friday, June 11, 1999)]
[Notices]
[Pages 31624-31638]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14470]


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

DEPARTMENT OF JUSTICE

Antitrust Division


United States of America v. Imetal, DBK Minerals, Inc., English 
China Clays, plc, and English China Clays, Inc.; Proposed Final 
Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sections 16(b) through (h), that a Complaint, 
Hold Separate Stipulation and Order, and a proposed Final Judgment were 
filed with the United States District Court for the District of 
Columbia in United States v. Imetal, DBK Minerals, Inc., English China 
Clays, plc, and English China Clays, Inc., Civil No. 99-1018 on April 
26, 1999. A Competitive Impact Statement was filed on May 24, 1999. The 
Complaint alleged that the proposed acquisition of English China Clays 
(``ECC'') by Imetal would violate Section 7 of the Clayton Act, 15 
U.S.C. Section 18, in the markets for water-washed and calcined kaolin 
and fused silica in the United States and in the

[[Page 31625]]

market for paper-grade ground calcium carbonate (``GCC'') in the 
Southeastern United States. The Southeastern U.S. was defined as the 
thirteen states of North Carolina, South Carolina, Georgia, Florida, 
Alabama, Tennessee, Kentucky, Mississippi, Louisiana, Arkansas, 
Missouri, Texas, and Virginia. The proposed Final Judgment, filed at 
the same time as the Complaint, requires Imetal, among other things, 
to: (1) divest production facilities and associated reserves for water-
washed and calcined kaolin; (2) sell its interest in Alabama 
Carbonates, L.P., a joint venture that makes paper-grade GCC, as well 
as substantial GCC reserves; and (3) sell the fused silica operations 
of ECC.
    A Competitive Impact Statement filed by the United States describes 
the Complaint, the proposed Final Judgment, the industry, and the 
remedies to be implemented by Imetal. Copies of the Complaint, Hold 
Separate Stipulation and Order, proposed Final Judgment, and 
Competitive Impact Statement are available for inspection in Room 215 
of the U.S. Department of Justice, Antitrust Division, 325 7th Street, 
NW, Washington, DC, and at the office of the Clerk of the United States 
District Court for the District of Columbia, Washington, DC. Copies of 
any of these materials may be obtained upon request and payment of a 
copying fee.
    Public comment is invited within the statutory 60-day comment 
period. Such comments and response thereto will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to J. Robert Kramer II, Chief, Litigation II Section, Antitrust 
Division, United States Department of Justice, 1401 H Street, NW, Suite 
3000, Washington, DC 20530 (telephone: 202-307-0924).
Constance K. Robinson,
Director of Operations.

United States District Court, District of Columbia

[Civil No: 99-1018]
    United States of America, Plaintiff, v. Imetal, DBK Minerals, 
Inc., English China Clays, PLC and English China Clays, Inc., 
Defendants.

Hold Separate Stipulation and Order

    It is hereby stipulated and agreed by and between the undersigned 
parties, subject to approval and entry by the Court, that:

I. Definitions

    As used in this Hold Separate Stipulation and Order:
    A. ``Imetal'' means defendant Imetal, a French corporation with its 
headquarters in Paris, France, and includes its successors and assigns, 
and its subsidiaries, divisions, groups, affiliates, partnerships, 
joint ventures, directors, officers, managers, agents, and employees.
    B. ``ECC'' means defendant English China Clays, plc, a United 
Kingdom corporation with its headquarters in Reading, England, and its 
subsidiary, defendant English China Clays, Inc., A Delaware corporation 
with its headquarters in Roswell, Georgia, and their successors and 
assigns, and their subsidiaries, divisions, groups, affiliates, 
partnerships, joint ventures, directors, officers, managers, agents, 
and employees.
    C. ``DBK'' means DBK Minerals, Inc., a Delaware subsidiary of 
Imetal, with its headquarters in Dry Branch, Georgia, and includes its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, joint ventures, directors, officers, 
managers, agents, and employees.
    D. ``DBK Plant'' means the kaolin plant of DBK located in Dry 
Branch, Georgia.
    E. ``Kaolin Assets'' means the Sandersville #1 plant of ECC and 
Kaolin Reserves inclusive of:
    (1) All tangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling kaolin 
from the Sanderville #1 Plant, including research and development 
activities, and real property containing the Sandersville #1 Plant and 
the Kaolin Reserves; all rights, titles, and interests, including all 
fee and leasehold rights, all manufacturing, personal property, 
inventory, office furniture, fixed assets and fixtures, materials, 
supplies, on-site and off-site warehouses or storage facilities, and 
other tangible property or improvements; all licenses, permits and 
authorizations; all contracts, agreements, leases, commitments and 
understandings; all customers lists and credit records; and all other 
records maintained by Imetal or ECC in connection with the operation of 
Sandersville #1 Plant and the Kaolin Reserves;
    (2) All intangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling kaolin 
from the Sandersville #1 Plant, including but not limited to a non-
exclusive, transferable, royalty-free license to use all patents, 
licenses and sublicenses, intellectual property, technical information, 
know-how trade secrets, specifications for materials, and quality 
assurance and control procedures utilized by ECC at the Sandersville #1 
Plant.
    F. ``DBK Plant Assets'' means the DBK Plant inclusive of:
    (1) All tangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling kaolin, 
including calcined kaolin, from the DBK Plant, including research and 
development activities, and real property containing the DBK Plant, 
Kaoline Reserves and Calcined Kaolin Reserves; all rights, titles, and 
interests, including all fee and leasehold rights, all manufacturing, 
personal property, inventory, office furniture, fixed assets and 
fixtures, materials, supplies, on-site warehouses or storage 
facilities, and other tangible property or improvements; all licenses, 
permits and authorizations; all contracts, agreements, leases, 
commitments and understandings; all customers lists and credit records; 
and all other records maintained by Imetal in connection with the 
operation of the DBK Plant;
    (2) All intangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling kaolin 
from the DBK Plant, including but not limited to a non-exclusive, 
transferable, royalty-free license to use all patents, licenses and 
sublicenses, intellectual property, technical information, know-how, 
trade secrets, specifications for materials, and quality assurance and 
control procedures utilized by Imetal or DBK at the DBK Plant.
    G. ``GCC'' means ground calcium carbonate.
    H. ``GCC Assets'' means DBK's interests in Alabama Carbonates, L.P. 
(``Alabama Carbonates''), a limited partnership between Carbonate 
Corporation, a subsidiary of Omya, Inc., and Georgia Marble Stone 
Corporation (``Georgia Marble''), a subsidiary of DBK, located in 
Sylacauga, Alabama, which manufactures GCC products in slurry form for 
use in paper production.
    I. ``GCC Reserves'' means economically recoverable calcium 
carbonate stone reserves located in the Sylacauga, Alabama area of a 
minimum pureness quality suitable for slurry products produced and sold 
to the paper industry.
    J. ``GCC Reserve Assets'' means GCC Reserves in quantities 
sufficient to ensure that Alabama Carbonates will have available to it 
500,000 tons per year of crushed, washed and reduced to size stone 
suitable to use as feedstock for a period of thirty (30) years. 
Determination of the amount of GCC Reserves needed to meet this 
standard shall take into account the amount of any GCC Reserves that 
any principal or affiliate of Alabama Carbonates (other

[[Page 31626]]

than the defendants) owns, leases or has an option on, and are 
available to Alabama Carbonates. In the event that Alabama Carbonates, 
the purchaser of the GCC Assets, or Georgia Marble's joint venturer in 
Alabama Carbonates and the seller cannot agree on the amount of GCC 
Reserves that must be divested to meet the standard set forth above or 
the fair market value of such reserves, such issue may be submitted to 
binding arbitration in accordance with Section IX of the Final Judgment 
in this case.
    K. ``Fused Silica Assets'' means the fused silica plant of Minco, 
Inc. acquired from Minco Acquisition Corp. in 1998, inclusive of:
    (1) All tangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling fused 
silica; including research and development activities; all rights, 
titles, and interest, including all fee and leasehold rights; all 
manufacturing, personal property, inventory, office furniture, fixed 
assets and fixtures, materials, supplies, on-site warehouses or storage 
facilities, and other tangible property or improvements; all licenses, 
permits and authorizations; all contracts, agreement, leases, 
commitments and understandings; all customer lists and credit records; 
and all other records maintained by Imetal in connection with the 
operation of the fused silica plant divested;
    (2) All intangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling fused 
silica, including but not limited to a non-exclusive, transferable, 
royalty-free license to use all patents, licenses and sublicenses, 
intellectual property, technical property, technical information, know-
how, trade secrets, specifications for materials, and quality assurance 
and control procedures utilized by Minco in the production of fused 
silica.
    L. ``Fused Magnesia Assets'' means the fused magnesia plant 
acquired from Minco Acquisition Corp. in 1998, inclusive of:
    (1) All tangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling fused 
magnesia; including research and development activities, all rights, 
titles, and interests, including all fee and leasehold rights; all 
manufacturing, personal property, inventory, office furniture, fixed 
assets and fixtures, materials, supplies, on-site warehouses or storage 
facilities, and other tangible property or improvements; all licenses, 
permits and authorizations; all contracts, agreements, leases, 
commitments and understandings; all customer lists and credit records; 
and all other records maintained by Minco in connection with the 
operation of the fused magnesia plant divested;
    (2) All intangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling fused 
magnesia including but not limited to a non-exclusive, transferable, 
royalty-free license to use all patents, licenses and sublicenses, 
intellectual property, technical information, know-how, trade secrets, 
specifications for materials, and quality assurance and control 
procedures utilized by Minco in the production of fused magnesia.
    M. ``Kaolin Reserves'' means kaolin clay suitable for producing 
kaolin of minimum pureness quality suitable for products produced and 
sold to the paper industry and at a location and in quantities and 
qualities sufficient to ensure the operation and viability of the 
Kaolin Assets or, if divested pursuant to the Final Judgment in this 
case, the DBK Plant Assets, at full capacity for a period of twenty 
(20) years.
    N. ``Calcined Kaolin Reserves'' means kaolin clay suitable for 
producing calcined kaolin of minimum pureness quality suitable for 
products produced and sold to the paper industry and at a location and 
in quantities and qualities sufficient to ensure the operation and 
viability of the Calcined Assets or, if divested pursuant to the Final 
Judgment in this case, the calcining assets of the DBK Plant Assets, at 
full capacity for a period of twenty (20) years.
    O. ``Calcining Assets'' means a plant or plants with two (2) 
calciners suitable for producing calcined kaolin sold to the paper 
industry, other than the calcining facilities in Sandersvillle, 
Georgia, with a combined capacity of approximately 85,000 to 100,000 
tons of calcined kaolin per year, inclusive of:
    (1) All tangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling 
calcined kaolin, including research and development activities; real 
property containing Calcining Assets and Calcined Kaolin Reserves; all 
rights, titles and interests including all fee and leasehold rights, 
all manufacturing, personal property, inventory, office furniture, 
fixed assets and fixtures, materials, supplies, on-site warehouses or 
storage facilities, and other tangible property or improvements; all 
licenses, permits and authorizations; all contracts, agreements, 
leases, commitments and understandings; all customers lists and credit 
records; and all other records maintained by Imetal or ECC in 
connection with the operation of the Calcining Assets and the Calcined 
Kaolin Reserves;
    (2) All intangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling 
calcined kaolin from the Calcining Assets and the Calcined Kaolin 
Reserves, including but not limited to a non-exclusive, transferable, 
royalty-free license to use all patents, licenses and sublicenses, 
intellectual property, technical information, know-how, trade secrets, 
specifications for materials, quality assurance and control procedures 
utilized by Imetal or ECC at the Calcining Assets.
    P. ``Sandersville #1 Plant'' means the water-washed kaolin plant of 
ECC with a capacity of 850,000 tons annually located in Sandersville, 
Georgia.
    Q. ``ECC Kaolin Business'' means the entire United States water-
washed and calcined kaolin business acquired by Imetal from ECC, 
including the operation of ECC's Sandersville #1 Plant, Sandersville #2 
Plant and the Wrens Plant.
    R. ``Hold Separate Assets'' means the ECC Kaolin Business, the 
Fused Silica Assets and the Fused Magnesia Assets collectively.

II. Objectives

    The Final Judgment filed in this case is meant to ensure Imetal's 
prompt divestiture of the Kaolin Assets, Calcining Assets, GCC Assets, 
GCC Reserve Assets, and Fused Silica Assets for the purposes of 
creating viable competitors in the development, production and sale of 
each of these products and to remedy the effects that the United States 
alleges would otherwise result from Imetal's proposed acquisition of 
ECC. This Hold Separate Stipulation and Order ensures the timely and 
complete transfer of these assets and maintains the separation of the 
ECC and Imetal water-washed kaolin, calcined kaolin, GCC for 
papermaking, fused silica and fused magnesia businesses as independent, 
viable competitors until the required divestitures are complete.

III. Jurisdiction and Venue

    The Court has jurisdiction over the subject matter of this action 
and over each of the parties hereto, and venue of this action is proper 
in the United States District Court for the District of Columbia.

[[Page 31627]]

IV. Compliance With and Entry of Final Judgment

    A. The parties stipulate that a Final Judgment in the form attached 
hereto may be filed with and entered by the Court, upon the motion of 
any party or upon the Court's own motion, at any time after compliance 
with the requirements of the Antitrust Procedures and Penalties Act (15 
U.S.C. Sec. 16), and without further notice to any party or other 
proceedings, provided that the United States has not withdrawn its 
consent, which it may do at any time before the entry of the proposed 
Final Judgment by serving notice thereof on defendants and by filing 
that notice with the Court.
    B. Defendants shall abide by and comply with the provisions of the 
proposed Final Judgment, pending the Judgment's entry by the Court, or 
until expiration of time for all appeals of any Court ruling declining 
entry of the proposed Final Judgment, and shall, from the date of the 
signing of this Stipulation by the parties, comply with all the terms 
and provisions of the proposed Final Judgment as though the same were 
in full force and effect as an order of the Court.
    C. This Stipulation shall apply with equal force and effect to any 
amended proposed Final Judgment agreed upon in writing by the parties 
and submitted to the Court.
    D. In the event (1) the United States has withdrawn its consent, as 
provided in Section IV(A) above, or (2) the proposed Final Judgment is 
not entered pursuant to this Stipulation, the time has expired for all 
appeals of any Court ruling declining entry of the proposed Final 
Judgment, and the Court has not otherwise ordered continued compliance 
with the terms and provisions of the proposed Final Judgment, then the 
parties are released from all further obligations under this 
Stipulation, and the making of this Stipulation shall be without 
prejudice to any party in this or any other proceeding.
    E. Defendants represent that the divestitures ordered in the 
proposed Final Judgment can and will be made, and that defendants will 
later raise no claim of hardship or difficulty as grounds for asking 
the Court to modify any of the divestiture provisions contained 
therein.

V. Hold Separate Provisions

    A. Imetal shall preserve, maintain, and operate the Hold Separate 
Assets as independent competitive businesses, with management, 
research, development, production, sales and operations of such assets 
held entirely separate, distinct and apart from those of Imetal. Imetal 
shall not coordinate its production, marketing or sale of any products 
with that of any of Judgment. Imetal may, subject to the use of 
firewalls acceptable to the United States, plan the post-divestiture 
integration of its DBK and ECC kaolin busineses.
    D. Imetal shall provide and maintain sufficient working capital to 
maintain the Hold Separate Assets as viable, ongoing businesses, 
consistent with current business plans.
    E. Imetal shall provide and maintain sufficient lines and sources 
of credit to maintain the Hold Separate Assets as viable, ongoing 
businesses.
    F. Imetal shall maintain, on behalf of the Hold Separate Assets, in 
accordance with sound accounting practices, separate, true and complete 
financial ledgers, books and records reporting the profit and loss and 
liabilities of each of the businesses on a monthly and quarterly basis.
    G. Imetal shall use all reasonable efforts to maintain and increase 
the sales of each of the Hold Separate Assets to be divested, such as 
maintaining at 1998 or previously approved levels for 1999, whichever 
are higher, internal research and development funding, sales, 
marketing, and support for the Hold Separate Assets.
    H. Imetal shall not sell, lease, assign, transfer or otherwise 
dispose of, or pledge as collateral for loans, assets that may be 
required to be divested pursuant to the Final Judgment.
    I. Imetal shall preserve the assets that may be required to be 
divested pursuant to the Final Judgment in a state of repair equal to 
their state of repair as of the date of this Order, ordinary wear and 
tear excepted.
    J. Except in the ordinary course of business or as is otherwise 
consistent with this Order, defendants shall not transfer or terminate, 
or alter, to the detriment of any employee, any current employment or 
salary agreements for any employee who, on the date of entry of this 
Order, works for any of the Hold Separate Assets. Defendants shall not 
solicit to hire any individual who, on the date of entry of this Order, 
was an employee of any of the assets to be divested under the Final 
Judgment.
    K. Within ten (10) days of the filing of this Hold Separate 
Stipulation and Order, defendants shall appoint one or more persons who 
shall have complete managerial responsibility for the Hold Separate 
Assets, subject to the provisions of this Order and the Final Judgment, 
until such time as this Order is terminated. In the event that such 
manager(s) is unable to perform his or her duties, Imetal shall appoint 
from the current management of the Hold Separate Assets, subject to the 
plaintiff's approval, a replacement within ten (10) working days. 
Should Imetal fail to initially appoint a manager acceptable to the 
United States, or fail to appoint any replacement required within ten 
(10) working days, the United States shall appoint the manager.
    L. Imetal shall take no action that would interfere with the 
ability of any trustee appointed pursuant to the Final Judgment to 
complete the divesture pursuant to the Final Judgment to a suitable 
purchaser.
    M. This Order shall remain in effect as to the ECC Kaolin Business 
until the divesture of the Kaolin or DBK Plant Assets required by the 
Final Judgment is complete, or until further Order of the Court. This 
Order shall remain in effect as to the Fused Silica Assets and Fused 
Magnesia Assets until the divestiture of the Fused Silica Assets 
required by the Final Judgment is complete, or until further Order of 
the Court.

    Dated: April 26, 1999.

For Plaintiff United States of America

Patricia G. Chick,
Esquire, D.C. Bar #266403, U.S. Department of Justice, Antitrust 
Division, Litigation II Section, 1401 H Street, N.W., Suite 3000, 
Washington, D.C. 20005, (202) 307-0946.

For Defendants Imetal and DBK Minerals, Inc.:

George M. Chester, Jr.,
Esquire, D.C. Bar #238196, James R. Atwood, Esquire, Covington & 
Burling, 1201 Pennsylvania Avenue, N.W., Washington, D.C. 20044-7566, 
(202) 662-6000.

For Defendant English China Clays, Plc and English China Clays, Inc.

William R. Norfolk,
Esquire, Sullivan & Cromwell, 125 Broad Street, New York, NY 10004-
2498, (212) 558-4000.

    It is ordered by the Court, this ______ day of April, 1999.

----------------------------------------------------------------------
United States District Judge.

[Civil No.: 99-1018]
    United States of America, Plaintiff, v. Imetal, DBK Minerals, 
Inc., English China Clays, Plc, and English China Clays, Inc., 
Defendants.

Final Judgment

    Whereas, plaintiff, the United States of America, and defendants 
Imetal (``Imetal''), DBK Minerals, Inc. (``DBK''), English China Clays, 
plc and English China Clays, Inc. (together ``ECC''), by their 
respective attorneys, having consented to the entry of this Final 
Judgment without trial or adjudication

[[Page 31628]]

of any issue of fact or law herein, and without this Final Judgment 
constituting any evidence against or an admission by any party with 
respect to any issue of law or fact herein; and having consented that 
this Final Judgment shall settle all claims made by plaintiff in its 
Complaint filed April 26, 1999;
    And whereas, defendants have agreed to bound by the provisions of 
this Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is, in the event of 
the acquisition of ECC by Imetal, the prompt and certain divestiture of 
the identified assets to assure that competition is not substantially 
lessened;
    And whereas, plaintiff requires defendants to make certain 
divestitures for the purpose of establishing a viable competitor in the 
water-washed kaolin, calcined kaolin, ground calcium carbonate 
(``GCC''), and fused silica businesses specified in the Complaint;
    And whereas, defendants have represented to the plaintiff that the 
divestitures ordered herein can and will be made and that defendants 
will later raise no claims of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture provisions contained 
below;
    Now, therefore, before the taking of any testimony, and without 
trial or adjudication of any issue of fact or law herein, and upon 
consent of the parties hereto, it is hereby ordered, adjudged, and 
decreed as follows:

I. Jurisdiction

    This Court has jurisdiction over each of the parties hereto and 
over the subject matter of this action. The Complaint states a claim 
upon which relief may be granted against defendants, as hereinafter 
defined, under Section 7 of the Clayton Act, as amended, 15 U.S.C. 
Sec. 18.

II. Definitions

    As used in this Final Judgment:
    A. ``Imetal'' means defendant Imetal, a French corporation with its 
headquarters in Paris, France, and includes its successors and assigns, 
and its subsidiaries, divisions, groups, affiliates, partnerships, 
joint ventures, directors, officers, managers, agents, and employees.
    B. ``ECC'' means defendant English China Clays, plc, a United 
Kingdom corporation with its headquarters in Reading, England, and its 
subsidiary, defendant English China Clays, Inc., a Delaware corporation 
with its headquarters in Roswell, Georgia, and their successors and 
assigns, and their subsidiaries, divisions, groups, affiliates 
partnerships, joint ventures, directors, officers, managers, agents, 
and employees.
    C. ``DBK'' means DBK Minerals, Inc., a Delaware subsidiary of 
Imetal, with its headquarters in Dry Branch, Georgia, and includes its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, joint ventures, directors, officers, 
managers, agents, and employees.
    D. ``DBK Plant'' means the kaolin plant of DBK located in Dry 
Branch, Georgia.
    E. ``Kaolin Assets'' means the Sandersville #1 plant of ECC and the 
Kaolin Reserves inclusive of:
    (1) All tangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling kaolin 
from the Sandersville #1 Plant, including research and development 
activities, and real property containing the Sandersville #1 Plant and 
the Kaolin Reserves; all rights, titles, and interests, including all 
fee and leasehold rights, all manufacturing, personal property, 
inventory, office furniture, fixed assets and fixtures, materials, 
supplies, on-site and off-site warehouses or storage facilities, and 
other tangible property or improvements; all licenses, permits and 
authorizations; all contracts agreements, leases, commitments and 
understandings; all customer lists and credit records; and all other 
records maintained by Imetal or ECC in connection with the operation of 
the Sandersville #1 Plant and the Kaolin Reserves;
    (2) All intangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling kaolin 
from the Sandersville #1 Plant, including but not limited to a non-
exclusive, transferable, royalty-free license to use all patents, 
licenses and sublicenses, intellectual property, technical information, 
know-how, trade secrets, specifications for materials, and quality 
assurance and control procedures utilized by ECC at the Sandersville #1 
Plant.
    F. ``DBK Plant Assets'' means the DBK Plant inclusive of:
    (1) All tangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling kaolin, 
including calcined kaolin, from the DBK Plant, including research and 
development activities, and real property containing the DBK Plant, 
Kaolin Reserves and Calcined Kaolin Reserves; all rights titles, and 
interests, including all fee and leasehold rights, all manufacturing, 
personal property, inventory, office furniture, fixed assets and 
fixtures, materials, supplies, on-site warehouses or storage 
facilities, and other tangible property or improvements; all licenses, 
permits and authorizations; all contracts, agreements, leases, 
commitments and understandings; all customers lists and credit records; 
and all other records maintained by Imetal in connection with the 
operation of the DBK Plant;
    (2) All intangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling kaolin 
from the DBK Plant, including but not limited to a non-exclusive, 
transferable, royalty-free license to use all patents, licenses and 
sublicenses, intellectual property, technical information, know-how, 
trade secrets, specifications for materials, and quality assurance and 
control procedures utilized by Imetal or DBK at the DBK Plant.
    G. ``GCC'' means ground calcium carbonate.
    H. ``GCC Assets'' means DBK's interests in Alabama Carbonates, L.P. 
(``Alabama Carbonates''), a limited partnership between Carbonate 
Corporation, a subsidiary of Omya, Inc., and Georgia Marble Stone 
Corporation (``Georgia Marble''), a subsidiary of DBK, located in 
Sylacauga, Alabama, which manufactures GCC products in slurry form for 
use in paper production.
    I. `` GCC Reserve'' means economically recoverable calcium 
carbonate stone reserves located in the Sylacauga, Alabama area of a 
minimum pureness quality suitable for slurry products produced and sold 
to the paper industry.
    J. ``GCC Reserve Assets'' means GCC Reserves in quantities 
sufficient to ensure that Alabama Carbonates will have available to it 
500,000 tons per year of crushed, washed and reduced to size stone 
suitable to use as feedstock for a period of thirty (30) years. 
Determination of the amount of GCC Reserves needed to meet this 
standard shall take into account the amount of any GCC Reserves that 
any principal or affiliate of Alabama Carbonates (other than the 
defendants) owns, leases or has an option on, and are available to 
Alabama Carbonates. In the event that Alabama Carbonates, the purchaser 
of the GCC Assets, or Georgia Marble's joint venturer in Alabama 
Carbonates and the seller cannot agree on the amount of GCC Reserves 
that must be divested to meet the standard set forth above or the fair 
market value of such reserves, such issue may be submitted to binding 
arbitration in accordance with Section IX of this Final Judgment.

[[Page 31629]]

    K. ``Fused Silica Assets'' means the fused silica plant of Minco, 
Inc. acquired from Minco Acquisition Corp. In 1998, inclusive of:
    (1) All tangible assets in connection with the business of making, 
having made, using, packaging, distributing, or selling fused silica, 
including research and development activities; all rights, titles, and 
interest, including all fee and leasehold rights; all manufacturing, 
personal property, inventory, office furniture, fixed assets and 
fixtures, materials, supplies, on-site warehouses or storage 
facilities, and other tangible property or improvements; all licenses, 
permits and authorizations; all contracts, agreements, leases, 
commitments and understandings; all customer lists and credit records; 
and all other records maintained by Minco in connection with the 
operation of the fused silica plant divested;
    (2) All intangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling fused 
silica, including but not limited to a non-exclusive, transferable, 
royalty-free license to use all patents, licenses and sublicenses, 
intellectual property, technical information, know-how, trade secrets, 
specifications for materials, and quality assurance and control 
procedures utilized by Minco in the production of fused silica.
    L. ``Fused Magnesia Assets'' means the fused magnesia plant 
acquired from Minco Acquisition Corp. in 1998, inclusive of:
    (1) All tangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling fused 
magnesia, including research and development activities; all rights, 
titles, and interests, including all fee and leasehold rights; all 
manufacturing, personal property, inventory, office furniture, fixed 
assets and fixtures, materials, supplies, on-site warehouses or storage 
facilities, and other tangible property or improvements; all licenses, 
permits and authorizations; all contracts, agreements, leases, 
commitments and understandings; all customer lists and credit records; 
and all other records maintained by Minco in connection with the 
operation of the fused magnesia plant divested;
    (2) All intangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling fused 
magnesia, including but not limited to a non-exclusive, transferable, 
royalty-free license to use all patents, licenses and sublicenses, 
intellectual property, technical information, know-how, trade secrets, 
specifications for materials, and quality assurance and control 
procedures utilized by Minco in the production of fused magnesia.
    M. ``Kaolin Reserves'' means kaolin clay suitable for producing 
kaolin of minimum pureness quality suitable for products produced and 
sold to the paper industry and at a location and in quantities and 
qualities sufficient to ensure the operation and viability of the 
Kaolin Assets or, if divested pursuant to this Final Judgment, the DBK 
Plant Assets, at full capacity for a period of twenty (20) years.
    N. ``Calcined Kaolin Reserves'' means kaolin clay suitable for 
producing calcined kaolin of minimum pureness quality suitable for 
products produced and sold to the paper industry and at a location and 
in quantities and qualities sufficient to ensure the operation and 
viability of the Calcined Assets or, if divested pursuant to this Final 
Judgment, the calcining assets of the DBK Plant Assets, at full 
capacity for a period of twenty (20) years.
    O. ``Calcining Assets'' means a plant or plants with two (2) 
calciners suitable for producing calcined kaolin sold to the paper 
industry, other than the calcining facilities in Sandersville, Georgia, 
with a combined capacity of approximately 85,000 to 100,000 tons of 
calcined kaolin per year, inclusive of:
    (1) All tangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling 
calcined kaolin, including research and development activities; real 
property containing Calcining Assets and Calcined Kaolin Reserves; all 
rights, titles and interests including all fee and leasehold rights, 
all manufacturing, person property, inventory, office furniture, fixed 
assets and fixtures, materials, supplies, on-site warehouses or storage 
facilities, and other tangible property or improvements; all licenses, 
permits and authorizations; all contracts, agreements, leases, 
commitments and understandings; all customers lists and credit records; 
and all other records maintained by Imetal or ECC in connection with 
the operation of the Calcining Assets and the Calcined Kaolin Reserves;
    (2) All intangible assets used in connection with the business of 
making, having made, using, packaging, distributing, or selling 
calcined kaolin from the Calcining Assets and the Calcined Kaolin 
Reserves, including but not limited to a non-exclusive, transferable, 
royalty-free license to use all patents, licenses and sublicenses, 
intellectual property, technical information, know-how, trade secrets, 
specifications for materials, and quality assurance and control 
procedures utilized by Imetal or ECC at the Calcining Assets.
    P. ``Sandersville #1 Plant'' means the water-washed kaolin plant of 
ECC with a capacity of 850,000 tons annually located in Sandersville, 
Georgia.

III. Applicability

    A. The provisions of this Final Judgment apply to the defendants, 
their successors and assigns, subsidiaries, directors, officers, 
managers, agents, and employees, and all other persons in active 
concert or participation with any of them who shall have received 
actual notice of this Final Judgment by personal service or otherwise.
    B. Defendants shall require, as a condition of the sale of all or 
substantially all of its assets or of lesser business units that 
include its water-washed kaolin, calcined kaolin, GCC, or fused silica 
businesses or assets, that the purchaser or purchasers agree to be 
bound by the provisions of this Final Judgment.

IV. Divestitures

    A. Defendants are hereby ordered and directed, in accordance with 
the terms of this Final Judgment, within one hundred and eighty (180) 
calendar days after the filing of the Hold Separate Stipulation and 
Order in this case, or within five (5) days after notice of entry of 
the Final Judgment, whichever is later, to sell the Kaolin Assets or at 
their option the DBK Plant Assets, the Calcining Assets, the GCC Assets 
and the Fused Silica Assets as viable, ongoing businesses to a 
purchaser or purchasers acceptable to the United States in its sole 
discretion and to sell the GCC Reserve Assets to the purchaser of the 
GCC Assets, to Georgia Marble's joint venturer in Alabama Carbonates, 
or to Alabama Carbonates.
    B. Defendants are also ordered to enter into, at the option of 
Alabama Carbonates, a short-term contract to supply Alabama Carbonates 
with crushed, washed and reduced to size calcium carbonate stone 
suitable to use as feedstock for slurry products produced and sold to 
the paper industry in quantities and quality and at terms and 
conditions substantially similar to those of the existing supply and 
services agreements between Georgia Marble and Alabama Carbonates and 
which is acceptable to the United States in its sole discretion. Such 
contract shall have a term of either three (3) years from the 
divestiture of the GCC Assets and GCC Reserve Assets or two (2) years 
from the conclusion of any arbitration permitted by Section IX of this 
Final Judgment,

[[Page 31630]]

whichever is longer, and shall be terminable by Alabama Carbonates on 
six months' notice. The United States, in its sole discretion, may 
extend the term of the short-term contract for periods of time not to 
exceed one year in total.
    C. Defendants shall use their best efforts to accomplish said 
divestitures as expeditiously as possible. The United States, in its 
sole discretion, may extend the time period for any divestitures for an 
additional period of time not to exceed sixty (60) calendar days.
    D. In accomplishing the divestitures ordered by this Final 
Judgment, defendants shall make known promptly, by usual and customary 
means, the availability of the Kaolin Assets or at their option the DBK 
Plant Assets, the Calcining Assets, the GCC Assets, and the Fused 
Silica Assets. Defendants shall inform any person making an inquiry 
regarding a possible purchase that the sale is being made pursuant to 
this Final Judgment and provide such person with a copy of this Final 
Judgment. Defendants shall also offer to furnish to all prospective 
purchasers, subject to customary confidentiality assurances, all 
information regarding these assets customarily provided in a due 
diligence process, except such information as is subject to attorney-
client privilege or attorney work-product privilege. Defendants shall 
make such information available to the United States at the same time 
that such information is made available to any other person. In the 
event that defendants enter into an agreement to negotiate exclusively 
with a prospective purchaser for the divestiture of any asset to be 
divested, defendants' obligations to furnish information to other 
prospective purchasers may be suspended during such period of exclusive 
negotiations, provided however, that nay such suspension of this 
obligation shall not affect the time period within which defendants 
must sell the asset.
    E. As customarily provided as part of a due diligence process, 
defendants shall permit prospective purchasers of the assets to have 
access to personnel and to make inspection of such assets; access to 
any and all zoning, building, and other permit documents and 
information; and access to any and all financial, operational, or other 
documents and information.
    F. Defendants shall not interfere with any negotiations by any 
purchaser or purchasers to employ any DBK or ECC employee who works at, 
or whose principal responsibility concerns, any aspect of the Kaolin 
Assets (or, if appropriate, the DBK Plant Assets), the Calcining 
Assets, the GCC Assets, the GCC Reserve Assets or the Fused Silica 
Assets.
    G. Defendants shall not take any action, direct or indirect, that 
would impede in any way the operation of any business connected with 
the assets to be divested, or take any action, direct or indirect, that 
would impede the divestiture of any asset.
    H. Defendants shall warrant to any and all purchasers of the Kaolin 
Assets, the DBK Plant Assets, the Calcining Assets, the GCC Assets and 
the Fused Silica Assets that each existing asset will be operational on 
the date of sale.
    I. Unless the United States otherwise consents in writing, the 
divestitures pursuant to Section IV, whether by defendants or by 
trustee appointed pursuant to Section VI of this Final Judgment, shall 
include the entire Kaolin Assets (or, of appropriate, the DBK Plant 
Assets), Calcining Assets, GCC Assets, GCC Reserve Assets and Fused 
Silica Assets, or such other assets as may be substituted or 
additionally included by the Trustee under Section VI of the Final 
Judgment. Such divestitures shall be accomplished by selling or 
otherwise conveying the assets to a purchaser or purchasers in such a 
way as to satisfy the United States, in its sole discretion, that the 
assets can and will be used by the purchaser as viable ongoing 
businesses, engaged in the water-washed kaolin, calcined kaolin for 
papermaking, GCC for papermaking or fused silica businesses. The 
divestitures, whether pursuant to Section IV or Section VI of this 
Final Judgment, shall be made to a purchaser or purchasers who, as 
demonstrated to the United States' sole satisfaction: (1) has the 
capability and intent of competing effectively in the water-washed 
kaolin, calcined kaolin for papermaking, GCC for papermaking or fused 
silica businesses; (2) has or soon will have the managerial, 
operational, and financial capability to compete effectively in the 
water-washed kaolin, calcined kaolin for papermaking, GCC for 
papermaking or fused silica businesses; and (3) is not hindered by the 
terms of any agreement between the purchaser and defendants which gives 
defendants the ability unreasonably to raise the purchaser's costs, 
lower the purchaser's efficiency, or otherwise interfere with the 
ability of the purchaser to compete.
    J. Defendants shall warrant to the purchaser of the Kaolin Assets, 
the Calcining Assets, the GCC Assets, the GCC Reserve Assets, the Fused 
Silica Assets and the Fused Magnesia Assets that there are no material 
defects in the environmental, zoning or other permits pertaining to the 
operation of each asset, and that with respect to the Kaolin Assets, 
the Calcining Assets, the GCC Assets, the GCC Reserve Assets, the Fused 
Silica Assets and the Fused Magnesia Assets, defendants will not 
undertake, directly or indirectly, following the divestiture of any 
such asset, any challenges to the environmental, zoning, or other 
permits pertaining to the operation of the assets.
    K. In the event that there is a divestiture by either the 
defendants or the trustee of the DBK Plant Assets, including at least 
two calciners with capacity of approximately 85,000 to 100,000 tons of 
calcined kaolin per year, such divestiture shall satisfy the 
requirements of this Final Judgment to divest the Kaolin Assets and the 
Calcining Assets.

V. Notice of Proposed Divestitures

    Within two (2) business days following execution of a definitive 
agreement, contingent upon compliance with the terms of this Final 
Judgment, to effect, in whole or in part, any proposed divestiture 
pursuant to Section IV or VI of this Final Judgment, defendants or the 
trustee, whichever is then responsible for effecting the divestiture, 
shall notify the United States of the proposed divestiture. If the 
trustee is responsible, it shall similarly notify defendants. The 
notice shall set forth the details of the proposed transaction and 
shall list the name, address, and telephone number of each person not 
previously identified who offered to, or expressed an interest in or a 
desire to, acquire any ownership interest in the business to be 
divested that is the subject of the binding contract, together with 
full details of same. Within fifteen (15) calendar days of receipt of 
the United States of a divestiture notice, the United States, in its 
sole discretion, may request from defendants, the proposed purchaser, 
or any other third party additional information concerning the proposed 
divestiture and the proposed purchaser. Defendants and the trustee 
shall furnish any additional information requested from them within 
fifteen (15) calendar days of the receipt of the request, unless the 
parties shall otherwise agree. Within thirty (30) calendar days after 
receipt of the notice or within twenty (20) calendar days after the 
United States has been provided the additional information requested 
from the defendants, the proposed purchaser, and any third party, 
whichever is later, the United States shall provide written notice to 
defendants and the trustee, if there is one, stating whether or not it 
objects to the proposed divestiture. If

[[Page 31631]]

the United States provides written notice to defendants (and the 
trustee, if applicable) that it does not object, then the divestiture 
may be consummated, subject only to defendants' limited right to object 
to the sale under Section VI(B) of this Final Judgment. Upon objection 
by the United States, a divestiture proposed under Section IV or 
Section VI may not be consummated. Upon objection by defendants under 
the provision in Section VI(B), a divestiture proposed under Section VI 
shall not be consummated unless approved by the Court.

VI. Appointment of Trustee

    A. In the event that defendants have not divested any of the Kaolin 
Assets or DBK Plant Assets, Calcining Assets, GCC Assets, the GCC 
Reserve Assets, or Fused Silica Assets within the time period specified 
in Section IV of this Final Judgment, the Court shall appoint, on 
application of the United States, a trustee selected by the United 
States, to effect the divestiture of each such asset. The trustee shall 
have the right, in its sole discretion, to sell either the DBK Plant 
Assets or the Kaolin Assets. The trustee shall have the right, in its 
sole discretion, to additionally include in the sale of the Fused 
Silica Assets the Fused Magnesia Assets. The trustee shall also have 
the right, in its sole discretion, and upon notice to the defendants 
and approval of the United States, to require the divestiture of 
additional related assets reasonably necessary to divest the Kaolin 
Assets, the Calcining Assets, and the Fused Silica Assets as viable 
stand-alone businesses including, but not limited to, sales and 
marketing facilities and organizations, research and development 
facilities and organizations. In any such event, all of the obligations 
of the defendants under the Final Judgment shall apply to the added 
assets as well.
    B. After the appointment of a trustee become effective, only the 
trustee shall have the right to divest any assets. The trustee shall 
have the power and authority to accomplish any and all divestitures of 
assets at the best price then obtainable upon a reasonable effort by 
the trustee, subject to the provisions of Sections IV and VI of this 
Final Judgment, and shall have such other powers as the Court shall 
deem appropriate. Subject to Section VI(C) of this Final Judgment, the 
trustee shall have the power and authority to hire at the cost and 
expense of the defendants any investment bankers, attorneys, or other 
agents reasonably necessary in the judgment of the trustee to assist in 
the divestitures, and such professionals and agents shall be 
accountable solely to the trustee. The trustee shall have the power and 
authority to accomplish the divestitures at the earliest possible time 
to a purchaser or purchasers acceptable to the United States, in its 
sole discretion, and shall have such other powers as this Court shall 
deem appropriate. Defendants shall not object to a divestiture by the 
trustee on any ground other than the trustee's malfeasance. Any such 
objections by defendants must be conveyed in writing to the United 
States and the trustee within ten (10) calendar days after the trustee 
has provided the notice required under Section V of this Final 
Judgment.
    C. The trustee shall serve at the cost and expense of defendants, 
on such terms and conditions as the Court may prescribe, and shall 
account for all monies derived from the sale of each asset sold by the 
trustee, and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services and 
those of any professionals and agents retained by the trustee, all 
remaining money shall be paid to defendants and the trust shall then be 
terminated. The compensation of such trustee and of any professionals 
and agents retained by the trustee shall be reasonable in light of the 
value of the divested assets and based on a fee arrangement providing 
the trustee with an incentive based on the price and terms of the 
divestiture, and the speed with which it is accomplished.
    D. Defendants shall use their best efforts to assist the trustee in 
accomplishing the required divestitures, including their best efforts 
to effect all necessary regulatory approvals. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to the personnel, books, 
records, and facilities of each of the businesses to be divested, and 
defendants shall develop such financial or other information relevant 
to the businesses to be divested customarily provided in a due 
diligence process as the trustee may reasonably request, subject to 
customary confidentiality assurances. Defendants shall permit 
prospective purchasers of each of the Kaolin Assets, the Calcining 
Assets, the GCC Assets, the GCC Reserve Assets, or the Fused Silica 
Assets, or other assets being sold by the trustee, to have reasonable 
access to personnel and to make such inspection of physical facilities 
and any and all financial, operational or other documents and other 
information as may be relevant to the divestitures required by this 
Final Judgment.
    E. After its appointment, the trustee shall file monthly reports 
with the parties and the Court setting forth the trustee's efforts to 
accomplish the divestitures ordered under this Final Judgment; 
provided, however, that to the extent such reports contain information 
that the trustee deems confidential, such reports shall not be filed in 
the public docket of the Court. Such reports shall include the name, 
address and telephone number of each person who, during the preceding 
month, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in any of the assets to be 
divested, and shall describe in detail each contact with any such 
person during that period. The trustee shall maintain full records of 
all efforts made to sell the assets to be divested.
    F. If the trustee has not accomplished such divestitures within 
six(6) months after its appointment, the trustee thereupon shall file 
promptly with the Court a report setting forth (1) the trustee's 
efforts to accomplish the required divestitures, (2) the reasons, in 
the trustee's judgment, why the required divestitures have not been 
accomplished, and (3) the trustee's recommendations; provided, however, 
that to the extent such reports contain information that the trustee 
deems confidential, such reports shall not be filed in the public 
docket of the Court. The trustee shall at the same time furnish such 
report to the parties, who shall each have the right to be heard and to 
make additional recommendations consistent with the purpose of the 
trust. The Court shall enter thereafter such orders as it shall deem 
appropriate in order to carry out the purpose of the trust which may, 
if necessary, include extending the trust and the term of the trustee's 
appointment for a period of time requested by the United States.

VII. Affidavits

    A. Within twenty (20) calendar days of the filing of the Hold 
Separate Stipulation and Order in this matter and every thirty (30) 
calendar days thereafter until the divestitures have been completed 
pursuant to Section IV or VI of this Final Judgment, defendants shall 
deliver to the United States an affidavit as to the fact and manner of 
compliance with Section IV or VI of this Final Judgment. Each such 
affidavit shall include, inter alia, the name, address, and telephone 
number of each person who, at any time after the period covered by the 
last such report, made an offer to acquire, expressed an interest in 
acquiring, entered into negotiations to

[[Page 31632]]

acquire, or was contacted or made an inquiry about acquiring, any 
interest in any of the assets to be divested, and shall describe in 
detail each contact with any such person during that period. Each such 
affidavit shall also include a description of the efforts that 
defendants have taken to solicit a buyer for any and all of the Kaolin 
Assets or DBK Plant Assets, the Calcining Assets, the GCC Assets, the 
GCC Reserve Assets, or the Fused Silica Assets and to provide required 
information to prospective purchasers, including the limitations, if 
any, on such information. Assuming the information set forth in the 
affidavit is true and complete, any objection by the United States to 
information provided by defendants, including limitations on 
information, shall be made within fourteen (14) days of receipt of such 
affidavit.
    B. Within twenty (20) calendar days of the filing of the Hold 
Separate Stipulation and Order in this matter, defendants shall deliver 
to plaintiff an affidavit which describes in detail all actions 
defendants have taken and all steps defendants have implemented on an 
on-going basis to preserve the Kaolin Assets, the DBK Plant Assets, the 
Calcining Assets, the GCC Assets, and the Fused Silica Assets pursuant 
to Section VIII of this Final Judgment and the Hold Separate 
Stipulation and Order entered by the Court. The affidavit also shall 
describe, but not be limited to, defendants' efforts to maintain and 
operate each of the Kaolin Assets, the DBK Plant Assets, the Calcining 
Assets, the GCC Assets, and the Fused Silica Assets as an active 
competitor, maintain the management, staffing, sales, marketing and 
pricing of each asset, and maintain each asset in operable condition at 
current capacity configurations. Defendants shall deliver to plaintiff 
an affidavit describing any changes to the efforts and actions outlined 
in defendants' earlier affidavit(s) filed pursuant to this Section 
within fifteen (15) calendar days after the change is implemented.
    C. Until one year after such divestiture has been completed, 
defendants shall preserve all records of all efforts made to preserve 
the Kaolin Assets, the DBK Plant Assets, the Calcining Assets, the GCC 
Assets, and the Fused Silica Assets and to effect the ordered 
divestitures.

VIII. Firewall

    A. During the period of any supply contract for dry processed 
calcium carbonate between Imetal and Alabama Carbonates, Imetal shall 
construct and maintain in place a firewall that prevents any 
information about the purchaser's requirements, purchases, or future 
requirements for dry processed calcium carbonate from flowing to any 
other Imetal employee involved in the production, sale or marketing of 
GCC for paper by Imetal or the former ECC. To implement this provision, 
Imetal is required to identify those employees of Imetal or of the 
former ECC who are involved in the production, sale or marketing of GCC 
for paper, and all such identified employees shall be prohibited from 
receiving any information about Alabama Carbonates' requirements, 
purchases, or future requirements for dry processed calcium carbonate. 
All other employees of Imetal or the former ECC who receive any such 
information shall be prohibited for passing on such information to the 
identified employees.
    B. Imetal shall, within ten (10) business days of the entry of the 
Hold Separate Stipulation and Order, submit to the Department of 
Justice a document setting forth in detail its procedure to effect 
compliance with this provision. The Department of Justice shall have 
the sole discretion to approve Imetal's compliance plan and shall 
notify Imetal within three (3) business days whether it approves or 
rejects Imetal's compliance plan. In the event that Imetal's compliance 
plan is rejected, the reasons for the rejection shall be provided to 
Imetal and Imetal shall be given the opportunity to submit, within two 
(2) business days of receiving the notice of rejection; a revised 
compliance plan. If the parties cannot agree on a compliance plan 
within an additional three (3) business days, a plan will be devised by 
the Department of Justice and implemented by Imetal.

IX. Arbitration

    A. In the event that Alabama Carbonates, the purchaser of the GCC 
Assets, or Georgia Marble's joint venturer in Alabama Carbonates and 
the seller of the GCC Reserve Assets cannot agree on the amount of GCC 
Reserves that need to be divested or the fair market value of such 
reserves, any of those persons may elect to settle the issue through 
binding arbitration. The seller shall enter into a reasonable 
arbitration agreement, acceptable to the United States in its sole 
discretion, to govern such arbitration. The agreement shall provide 
that:
    (1) Any controversy to be settled by arbitration shall be submitted 
to the American Arbitration Association;
    (2) The arbitrator appointed shall be one acceptable to the United 
States in its sole discretion;
    (3) The United States shall provide its assistance to the 
arbitrator and may submit evidence;
    (4) Rules and procedures shall be adopted to ensure that the 
controversy shall be completed within four months from the appointment 
of the arbitrator and any ward made pursuant to any arbitration shall 
be final and binding on the parties to the arbitration.
    B. When any such controversy is submitted to arbitration, 
defendants shall promptly notify the United States in writing and shall 
promptly serve a copy of the final award on the United States.
    C. If any such controversy is submitted to arbitration, the period 
of time provided by Section IV(A) of this Final Judgment for the 
defendants to accomplish the divestiture required shall be tolled 
during the period of the arbitration. Following the conclusion of such 
arbitration, the United States shall, if necessary, extend the period 
of time provided in Section IV(A), to provide the defendants up to 
sixty (60) days in which to complete the divestiture.

X. Hold Separate Order

    Until the divestitures required by the Final Judgment have been 
accomplished, defendants shall take all steps necessary to comply with 
the Hold Separate Stipulation and Order entered by this Court. 
Defendants shall take no action that would jeopardize the sale of the 
Kaoline Assets, the DBK Plant Assets, the Calcining Assets, the GCC 
Assets, the Fused Silica Assets, or the Fused Magnesia Assets.

XI. Financing

    Defendants are ordered and directed not to finance all or any part 
of any acquisition made pursuant to Sections IV or VI of this Final 
Judgment.

XII. Compliance inspection

    For purposes of determining or securing compliance with the Final 
Judgment and subject to any legally recognized privilege, from time to 
time:
    A. Duly authorized representatives of the United States Department 
of Justice, upon written request of the Assistant Attorney General in 
charge of the Antitrust Division, and on reasonable notice to 
defendants made to their principal offices, shall be permitted:
    (1) Access during office hours of defendants to inspect and copy 
all books, ledgers, accounts, correspondence, memoranda, and other 
records and documents in the possession or under the control of 
defendants, who may
    (2) Subject to the reasonable convenience of defendants and without

[[Page 31633]]

restraint or interference from them, to interview, either informally or 
on the record, their officers, employees, and agents, who may have 
counsel present, regarding any such matters.
    B. Upon the written request of the Attorney General or the 
Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit such written reports, under oath if requested, 
with respect to any matter contained in the Final Judgment and the Hold 
Separate Stipulation and Order.
    C. No information or documents obtained by the means provided in 
Sections VI or VII of this Final Judgment shall be divulged by a 
representative of the United States to any person other than a duly 
authorized representative of the Executive Branch of the United States, 
except in the course of legal proceedings to which the United States is 
a party (including grand jury proceedings), or for the purpose of 
securing compliance with this Final Judgment, or as otherwise required 
by law.
    D. If at the time information or documents are furnished by 
defendants to the United States, defendants represent and identify in 
writing the material in any such information or documents as to which a 
claim of protection may be asserted under Rule 26(c)(7) of the Federal 
Rules of Civil Procedure, and defendants mark each pertinent page of 
such material, ``Subject to claim of protection under Rule 26(c)(7) of 
the Federal Rules of Civil Procedure,'' then ten (10) calendar days' 
notice shall be given by the United States to defendants prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding) to which defendants are not a party.

XIII. Retention of Jurisdiction

    Jurisdiction is retained by this Court for the purpose of enabling 
any of the parties to this Final Judgment to apply to this Court at any 
time for such further orders and directions as may be necessary or 
appropriate for the construction or carrying out of this Final 
Judgment, for the modification of any of the provisions hereof, for the 
enforcement of compliance herewith, and for the punishment of any 
violations hereof.

XIV. Termination

    Unless this Court grants an extension, this Final Judgment will 
expire upon the tenth anniversary of the date of its entry.

XV. Public Interest

    Entry of this Final Judgment is in the public interest.

    Dated ______, 1999.

----------------------------------------------------------------------

United States District Judge.
[Civil No: 99 1018]
Judge Gladys Kessler

Filed: April 26, 1999.
    United States of America Plaintiff, v. Imetal, DBK Minerals, 
Inc., English China Clays, plc, and English China Clays, Inc., 
Defendants.
Competitive Impact Statement
    The United States, pursuant to Section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16(b)-(h), 
files this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    On April 26, 1999, the United States file a civil antitrust 
Complaint alleging that the proposed acquisition of English China 
Clays, plc (``ECC'') by IMETAL (``Imetal'') would violate Section 7 of 
the Clayton Act, 15 U.S.C. Sec. 18, with respect to four relevant 
products. The Complaint alleges that Imetal and ECC are two of five 
U.S. producers of water-washed kaolin; two of four U.S. producers of 
calcined kaolin for use in paper-making; the only two producers in the 
Southeastern United States of ground clacium carbonate (``GCC'') in 
slurry form for the paper industry (``paper-grade GCC''); and the two 
leading U.S. producers of fused silica. The request for relief seeks: 
(1) a judgement that the proposed merger would violate Section 7 of the 
Clayton Act; (2) inductive relief preventing consummation of the 
proposed acquisition; (3) an award of costs to the plaintiff; and (4) 
such other relief as the Court may deem just and proper.
    When the Complaint was filed, the United States also filed a 
proposed Final Judgment and a Hold Separate Stipulation and Order that 
would settle the lawsuit. The proposed settlement permits Imetal to 
acquire ECC, but requires divestitures that will preserve competition 
in the four relevant product markets alleged in the Complaint. The 
proposed Final Judgment orders defendants to divest production 
facilities and associated assets, as defined in the proposed Final 
Judgment, for water-washed kaolin, calcined kaolin, and fused silica, 
to divest Imetal's interest in Alabama Carbonates, L.P., a joint 
venture that make paper-grade GCC, and to divest substantial GCC 
reserves. Defendants must accomplish these divestures within one 
hundred and eighty (180) calendar days after the filing of the proposed 
Final Judgment in this matter, or five (5) days after notice of the 
entry of the proposed Final Judgment by the Court, whichever is later, 
to purchaser acceptable to the Antitrust Division of the United States 
Department of Justice (``DOJ''). If the defendants do not do so within 
the time frame in the proposed Final Judgment, a trustee appointed by 
the Court would be empowered for an additional six months to sell those 
assets. If the trustee is unable to do so in that time, the Court could 
enter such orders as it shall deem appropriate to carry out the purpose 
of the trust which may, if necessary, include extending the trust and 
the trustees' appointment by a period requested by the United States.
    In addition, under the terms of the Hold Separate Stipulation and 
Order, defendants must hold specified assets to be divested separate 
and apart from their other businesses until the required divestitures 
have been accomplished. Defendants must, until the required 
divestitures are accomplished, preserve and maintain the specified 
assets to be divested as saleable and economically viable ongoing 
concerns.
    The plaintiff and defendants have stipulated that the proposed 
Final judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment would terminate the action, except that the 
Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. Description of the Event Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

    Imetal is a French corporation with headquarters in Paris, France. 
It produces building materials, industrial metals, and industrial 
minerals worldwide. In the United States, Imetal produces kaolin 
through its DBK Minerals, Inc. subsidiary (``DBK'') at a plant in Dry 
Branch, Georgia and at a plant in Jeffersonville, Georgia; dry-
processed GCC through The Georgia Marble Company (``Georgia Marble''), 
a subsidiary of DBK, at a number of locations throughout the United 
States, including its plant in Sylacauga, Alabama; paper-grade GCC 
through a joint venture, Alabama Carbonates, L.P., in Sylacauga, 
Alabama, in which Georgia marble has a 50 percent ownership interest; 
and fused silica, through its G-E Minerals, Inc. subsidiary at a plant 
in Greenville, Tennessee. In 1997, Imetal reported

[[Page 31634]]

total sales in excess of 10 billion French francs.
    ECC is a United Kingdom Corporation with headquarters in Reading, 
England. It produces industrial minerals, pigments and chemicals 
worldwide. In the United States, ECC produces kaolin through its 
English China Clays, Inc. subsidiary at two plants in Sandersville, 
Georgia and at a plant in Wrens, Georgia; and paper-grade GCC at a 
plant in Sylacauga, Alabama and at plants in Maryland and Wisconsin. In 
addition, in 1998, ECC purchased Minco Acquisition Corporation, a 
company that produces fused silica and fused magnesia at plants in 
Midway, Tennessee. In 1997, ECC reported total sales of about 850 
million pounds Sterling.
    On January 11, 1999, Imetal announced a cash tender offer for all 
of the shares of ECC. This transaction, which would increase 
concentration in the already highly concentrated markets for water-
washed kaolin clay, calcined kaolin clay and fused silica in the United 
States, and would increase concentration in the already highly 
concentrated market for paper-grade GCC in the Southeastern United 
States, precipitated the government's suit.\1\
---------------------------------------------------------------------------

    \1\ On April 27, 1999, Imetal consummated its cash tender offer, 
subject to the terms of the proposed settlement filed in this case.
---------------------------------------------------------------------------

B. The Markets

Water-Washed Kaolin
    Kaolin is a clay consisting of a crystalline hydrated aluminum 
silicate, ususlly found as the mineral kaolinite. The clay is mined in 
open pit quarries, and processed using crushing and grinding equipment. 
Water-washed kaolin is treated with water and flotation, which removes 
impurities and separates the kaolin by particle size. It is sold in a 
number of different grades, differentiated generally by particle size 
and brightness.
    The vast majority of water-washed kaolin is used in paper-making, 
both as a pigment in coating formulations and as a filler in the body 
of paper. In coating formulations, kaolin is typically used in 
conjunction with other pigments, such as GCC. The kaolin has unique 
properties, however, and the other pigments are typically used as a 
complement, rather than a replacement, for water-washed kaolin. Kaolin 
is used as a filler primarily in paper that is made using an acid 
process, where calcium carbonate fillers cannot generally be used.
    Thus, for many paper companies, no good substitute exists for 
water-washed kaolin. A small but significant increase in the price of 
water-washed kaolin would not cause a significant number of paper 
customers currently purchasing water-washed kaolin to substitute other 
products.
    Much of the world's highest quality kaolin deposits are found in a 
relatively small area in Georgia. All of the U.S. producers of water-
washed kaolin are located in Georgia, and sell products from their 
plants in Georgia throughout the United States.
Calcined Kaolin
    Calcined kaolin is water-washed kaolin that has been further 
processed by calcining or baking at a temperature of about 1000 degrees 
Centigrade under controlled conditions. The high temperature alters the 
structure of the water-washed kaolin, resulting in a whiter and 
brighter kaolin that has a higher refractive index. Because of its 
higher brightness, calcined kaolin is used in paper-making applications 
that require greater opacity than that provided by water-washed kaolin. 
Calcined kaolin costs more than twice as much as regular water-washed 
kaolin.
    For many paper customers, no good substitute exists for calcined 
kaolin. A a small but significant increase in the price of calcined 
kaolin would not cause a significant number of paper customers 
currently purchasing calcined kaolin to substitute other products.
    All of the U.S. producers of calcined kaolin for paper-making are 
located in Georgia, and sell their products from plants in Georgia to 
paper companies throughout the United States.
GCC for Paper Coating Applications
    Natural calcium carbonate is typically found in the ground in 
marble or limestone deposits. The stone is quarried and then processed 
through a series of screening and dry grinding steps into particles of 
various sizes, ranging down to about two (2) microns. The dry-processed 
GCC can also be further ground using a wet-grinding process into 
particle sizes as small as one (1) micron or less. GCC varies in color 
depending on the reserves from which it is quarried. The purest GCC 
comes from calcitic marble deposits. These high bright deposits are 
scarce, and some of the finest high bright deposits are located in the 
Sylacauga, Alabama area.
    Paper-making requires the brightest white GCC. The vast majority of 
GCC sold for paper-making is wet-processed and sold in slurry form. 
Most of the GCC consumed in paper-making, but most PCC used in paper-
making is used as filler. GCC is preferred over PCC in coating 
applications because of its runnability, higher printability and gloss.
    A small but significant increase in the price of GCC would not 
cause a significant number of paper customers currently purchasing GCC 
for coating applications to substitute other products.
    Paper-grade GCC, unlike water-washed and calcined kaolin, is 
produced in a number of locations throughout the United States. Because 
of high transportation costs, sales of GCC tend to be regional rather 
than nationwide.
Fused Silica
    Fused silica is formed by melting pure non-crystalline silicon 
dioxide at high temperatures. This process creates a material with a 
low coefficient of thermal expansion which improves resistance to 
extreme heat, corrosion, abrasion, and electrical non-conductivity. 
Fused silica is used in sophisticated applications such as investment 
castings and epoxy molding compounds used in the electronics industry, 
as well as in refractory applications.
    There are no economical substitutes for fused silica. A small but 
significant increase in the price of fused silica would not cause a 
significant number of current fused silica customers to substitute 
other products. Domestic producers of fused silica generally have a 
single plant, and sell their products throughout the United States.

C. Harm to Competition as a Result of the Proposed Transaction

Water-washed Kaolin
    Imetal and ECC compete with each other in the development, 
production and sale of water-washed kaolin in the United States--a 
market which is now highly concentrated and would become substantially 
more concentrated as a result of the proposed acquisition. There are 
only five U.S. producers of water-washed kaolin. ECC is the largest, 
and Imetal is the third largest. The proposed transaction would reduce 
the number of firms making water-washed kaolin to four and create a 
single firm with well over 50% of domestic production capacity. The 
acquisition would consolidate the industry into two large players--the 
combined Imetal/ECC and Engelhard Corp.--and two relatively small 
players--Thiele Kaolin Company and J.M. Huber. It would eliminate the 
direct competition between Imetal and ECC that has benefited consumers, 
and likely lead to higher prices through increased opportunities for 
coordination

[[Page 31635]]

and from the elimination of a significant competitor in an 
oligopolistic market.
    Moreover, new entry into the development, production and sale of 
water-washed kaolin is unlikely to occur and unlikely to be timely or 
sufficient to defeat a post-acquisition price increase. Building a 
water-washed kaolin plant could cost $100 million or more and take a 
minimum of two years. In addition, entry into the production of water-
washed kaolin would require the location, testing and acquisition of 
substantial kaolin reserves to justify the investment in the plant.
Calcined Kaolin
    The market for calcined kaolin for paper-making is even more 
concentrated than is the market for water-washed kaolin. There are only 
four producers, and ECC and Imetal are the second and third largest, 
respectively. (Engelhard is the industry leader and Thiele is the 
smallest participant.) The proposed transaction would reduce the number 
of firms making calcined kaolin for paper-making to only three, 
eliminating the direct competition between Imetal and ECC that has 
benefited consumers. The acquisition would likely lead to higher prices 
for calcined kaolin for paper-making.
    New entry is unlikely to occur and would not be timely or 
sufficient to defeat a post-acquisition price increase. To be an 
effective competitor, any new entrant would require at least two 
calciners with substantial capacity (estimated at 85,000 to 100,000 
tons annually) in order to be able to supply large paper customers' 
requirements and to be considered a credible source. Construction of a 
single calciner (with the necessary attendant infrastructure) could 
cost a minimum of $30 million and require at least two years, sometimes 
much longer, for permitting and construction. In addition, any entrant 
not already in the water-washed kaolin business would also face the 
barriers to entry into that business.
GCC for Paper Coating
    There are only four firms that make paper-grade GCC in the United 
States: Omya, Inc., ECC, Alabama Carbonates, and Columbia River 
Carbonates (in Washington State). Only two of these firms are located 
in the Southeastern United States. One is ECC and the other is Alabama 
Carbonates, which is a joint venture owned 50% by Omya and 50% by 
Imetal's Georgia Marble. Both are in Sylacauga, Alabama.
    Imetal and ECC compete in the sale of paper-grade GCC in the 
Southeastern United States. ECC has substantial high bright reserves of 
GCC in the Sylacauga area, which it quarries and processes at its 
Sylacauga plant. The plant does both dry processing and wet processing, 
and sells wet-processed GCC in slurry form for use in paper-making. 
Georgia Marble has many hundreds of years of GCC reserves in the 
Sylacauga area, which it quarries and dry processes at its Sylacauga 
plant, across the street from the ECC plant. Georgia Marble does not 
have a wet processing plant, but it has a 50% interest in the Alabama 
Carbonates joint venture, which has a wet processing plant right next 
to the Georgia Marble facility.
    Alabama Carbonates was formed as a joint venture between Georgia 
Marble and Omya in 1990 for the purpose of selling paper-grate GCC in 
thirteen states in the southeastern U.S. Under the terms of the joint 
venture, both Omya and Georgia Marble agreed to sell paper-grade GCC in 
the designated are only through the joint venture.\2\ Georgia Marble 
supplies the raw material which it quarries, crushes, washes, and dry 
processes into feedstock suitable for the wet processing plant at an 
agreed-upon price. Omya operates the wet-processing plant, sells the 
paper-grade GCC and collects a fee for these services.
---------------------------------------------------------------------------

    \2\ There is a limited exception in the joint venture agreement 
for certain pre-existing customers of the venturers.
---------------------------------------------------------------------------

    Transport costs for GCC are high. As a result, GCC sales, unlike 
sales of water-washed and calcined kaolin, tend to be regional. ECC and 
Alabama Carbonates are the only companies that compete directly with 
each other for sales of paper-grade GCC in the Southeastern United 
States.
    The proposed transaction would likely result in unilateral price 
increases to customers in the Southeastern United States. Entry is 
unlikely to occur, and would not be timely or sufficient to defeat a 
post-acquisition increase in the price of paper-grade GCC. The only 
other producer of paper-grade GCC is Omya, which would have no 
incentive to ship into the Southeast for the purpose of defeating its 
own price increase and, in any event, is barred from doing so by the 
terms of its joint venture agreement.\3\ A de novo entrant would have 
to acquire substantial high bright reserves in the Southeast, establish 
a quarry and build a processing plant. While the quarry and plant would 
require considerable expenditures of money and take substantial time, 
the most significant barrier is obtaining appropriate reserves. Paper-
grade GCC requires high bright reserves, which are a scarce resource 
and are generally believed to be largely unavailable in the Southeast 
because they are owned primarily by Georgia Marble and ECC.
---------------------------------------------------------------------------

    \3\ Columbia River Carbonates, the fourth producer of paper-
grade GCC, is another joint venture in which Omya is a participant.
---------------------------------------------------------------------------

Fused Silica
    Imetal and ECC are the two leading producers of fused silica in the 
United States. They account for more than 80% of domestic fused silica 
production, and more than 95% of the fused silica sold in the United 
States for investment castings. The two companies compete significantly 
with each other, and are each other's only meaningful competition in 
sales of fused silica for investment castings. The only other producer, 
Pemco, accounts for a tiny percentage of sales.
    Imetal and ECC face competition from other domestic producers and 
from imports in sales of fused silica for refractories. Overall, 
however, according to the defendants' documents, the two firms account 
for almost two-thirds of the total fused silica sales.
    The proposed transaction would eliminate the direct competition 
between Imetal and ECC that has benefited consumers, and would create a 
single firm with a virtual monopoly in the sales of fused silica for 
investment castings and an overwhelming share of total domestic sales 
of fused silica. This concentration would likely result in unilateral 
price increases to consumers of fused silica.
    Aluchem, Inc., an industrial minerals company, has announced plans 
to build a new plant in Alabama that will be capable of making fused 
silica. This planned entry by Aluchem, Inc. is not likely to be 
sufficient to deter an anticompetitive price increase, however. New 
entry is very difficult, time consuming and costly, and sufficient new 
entry is unlikely to occur and would not be timely or sufficient to 
defeat a post-acquisition fused silica price increase.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment requires substantial divestitures with 
respect to each of the products that is the subject of the Complaint. 
These divestitures are designed to ensure that the competition that 
would be eliminated by the proposed acquisition will be preserved and 
maintained. Under the terms of the proposed Final Judgment, defendants 
must accomplish these divestitures within one hundred and eighty (180) 
calendar days after the filing of that proposed Final Judgment, or five 
(5) days after notice of the entry of the proposed Final Judgment by 
the Court, whichever is later, to a purchaser

[[Page 31636]]

acceptable to United States. If defendants fail to divest the assets 
within this period, a trustee, selected by the United States, will be 
appointed by the Court to sell the assets. Section VI of the proposed 
Final Judgment, which provides for the appointment of a trustee, 
contains a ``Crown Jewel'' provision that empowers the trustee to sell 
additional assets if necessary to effect certain of the divestitures.
    If a trustee is appointed, the proposed Final Judgment provides 
that defendants will pay all costs and expenses of the trustee. After 
the trustee's appointment becomes effective, the trustee will file 
monthly reports with the parties and the Court, setting forth the 
trustee's efforts to accomplish divestiture. At the end of six months, 
if any divestiture has not been accomplished, the trustee and the 
parties will make recommendations to the Court, which shall enter such 
orders as appropriate in order to carry out the purpose of the trust, 
including extending the trust and the term of the trustee's 
appointment.

Kaolin

    With respect to water-washed and calcined kaolin, Section IV of the 
proposed Final Judgment requires defendants to divest the Sandersville 
No. 1 water-washed kaolin plant of ECC, with an annual capacity of 
850,000 tons, and to divest two calciners, with a minimum annual 
capacity of 85,000-100,000 tons. Alternatively, defendants may at their 
option sell the DBK plant in Dry Branch, Georgia. This plant includes 
both a water-washed kaolin plant with capacity of slightly over one 
million tons, and a calcined kaolin plant.
    In all cases, the plant divestiture requires divestiture of all 
tangible and intangible assets used in connection with those plants, 
and divestiture of sufficient kaolin reserves to operate the plant at 
full capacity for 20 years.
    Currently, DBK has two plants: the DBK plant, and a 300,000 ton 
capacity plant in Jeffersonville, Georgia, which it acquired in 1997 
when it purchased Nord Kaolin Co. The Jeffersonville plant is largely 
idled, except for the calcined at that location. The proposed 
transaction thus would give the combined company about 1 million tons 
more water-washed kaolin capacity than ECC had before the tender offer. 
Divestiture of the DBK plant would eliminate any increase in 
concentration in water-washed kaolin resulting from the acquisition. 
The Sandersville No. 1 plant is only slightly smaller than the DBK 
plant. In plaintiff's view, it is sufficiently close to DBK's stand-
alone capacity that a purchaser of that plant could be an effective 
replacement for DBK in the market.
    With respect to calcined kaolin, ECC currently has 4 calciners, 
with a total capacity of about 200,000 tons, making calcined kaolin for 
paper-making. DBK currently has 3 calciners, with a total capacity of 
about 105,000 tons, devoted to this product. Even after the required 
divestiture, the proposed transaction would result in some increased 
concentration in capacity for calcined kaolin for paper-making. From 
what plaintiff learned during the course of its investigation, however, 
the required divestiture should be sufficient for the purchaser to be a 
viable, effective new entrant into that market. Accordingly, plaintiff 
concluded that this divestiture is likely to substantially mitigate any 
anticompetitive effects of the proposed transaction with respect to 
calcined kaolin for paper-making.

GCC for Paper-Coating

    With respect to paper-grade GCC, Section IV of the proposed Final 
Judgment requires defendants to divest Georgia Marble's interest in the 
Alabama Carbonates limited partnership.\4\ Pending divestiture of 
Georgia Marble's interest in Alabama Carbonates, the Hold Separate 
Stipulation and Order requires Imetal to resign its seats on the 
Alabama Carbonates Management Committee and to assign to its joint 
venturer its right to name committee members.
---------------------------------------------------------------------------

    \4\ Under the provisions of the proposed Final Judgment, 
defendants must divest this interest to a purchaser or purchasers 
acceptable to the United States. Under the terms of the limited 
partnership agreement, however, Georgia Marble's joint venturer, 
Omya, has a contractual right to prior notice of any sale of the 
interest and a right to match any offer for that interest.
---------------------------------------------------------------------------

    Section IV of the proposed Final Judgment also requires defendants 
to divest sufficient GCC reserves for Alabama Carbonates to operate at 
its maximum stated contractual capacity of 500,000 tons for 30 years. 
These reserves must be economically recoverable, located in the 
Sylacauga, Alabama area, and of minimum pureness quality suitable for 
paper-grade GCC. Defendants must divest these reserves to the purchaser 
of Georgia Marble's interest, to Omya, or to Alabama Carbonates.
    The divestiture of reserves is designed to ensure that Alabama 
Carbonates will be able to operate independently of Georgia Marble. 
Currently, Alabama Carbonates relies on Georgia Marble for its raw 
material and for all dry processing of its feedstock. Such dependence 
on the company that, after the proposed transaction, will be its only 
competitor, raises obvious competitive problems. In order to operate 
independently the limited partnership must have its own reserves and 
its own processing facilities. The plaintiff concluded as a result of 
its investigation that 30 years' reserves was the minimum that the 
limited partnership would need to consider making the required 
investments in processing facilities.
    The proposed Final Judgment permits defendants, in calculating the 
quantity of reserves required to be divested, to take into account any 
economically recoverable reserves Omya already owns, uses or has an 
option on in the Sylacauga area that are of suitable quality and are 
available to Alabama Carbonates. The proposed Final Judgment further 
provides that, if Alabama Carbonates, Omya, or the purchaser of Georgia 
Marble's interest in Alabama Carbonates cannot agree with the 
defendants (or with the trustee if the trustee is the seller) on the 
amount of GCC Reserves to be divested to provide 500,000 tons of 
feedstock for 30 years, or cannot agree on the fair market value of 
those reserves, they may submit those issues to binding arbitration. 
Section IX of the proposed Final Judgment sets forth the procedures to 
be followed in the event of such arbitration.
    This provision for arbitration is designed to address two somewhat 
different concerns. First, defendants maintain that Omya already has 
extensive high bright GCC reserve holdings in the Sylacauga area and 
that Alabama Carbonates therefore does not need substantial additional 
reserves in order to be a viable independent competitor. As a result of 
its investigation, the United States disagreed and was unwilling to 
agree to a proposed settlement without a sufficient divestiture of GCC 
reserves to enable the joint venture to be a viable independent 
competitor. The arbitration provision permitted the parties to reach a 
settlement agreement that satisfies the United States' competitive 
concerns, while at the same time providing defendants with a mechanism 
for assuring themselves that they are protected against an unnecessary 
sale of their reserves.
    Second, given the contractual provisions of the Alabama Carbonates 
limited partnership agreement, there is a high likelihood that 
defendants will have no choice but to sell the GCC reserves to Omya. In 
such a situation, where there is a single buyer, the market forces that 
operate in a typical negotiation on price are absent. Defendants sought 
the option of

[[Page 31637]]

arbitration to provide them a modicum of protection in their 
negotiations. There is precedent for this in other Antitrust Division 
consent decrees that have ordered divestiture to a particular buyer.
    In addition to the divestiture provisions outlined above, Section 
IV of the proposed Final Judgment requires defendants, at the option of 
Alabama Carbonates, to supply the joint venture with feedstock for a 
period up to three years. This provision is designed to provide Alabama 
Carbonates with a reasonable transition period to make the investment 
required for it to be self-sufficient in the long term. The proposed 
Final Judgment further requires defendants to erect a firewall (Section 
VIII) during the term of any such supply contract, to ensure that no 
one at the combined Imetal/ECC with responsibility for paper-grade GCC 
receives any competitively sensitive information about Alabama 
Carbonates' requirements or purchases.

Fused Silica

    Section IV of the proposed Final Judgment requires defendants to 
divest the fused silica plant of ECC, together with all tangible and 
intangible assets used in connection with the plant. This divestiture 
would eliminate any anticompetitive effects of the proposed transaction 
with respect to fused silica.
    ECC acquired this fused silica plant within the last year when it 
acquired Minco. Minco also operates a fused magnesia plant, at the same 
location, that defendants wish to retain. The two plants are separate 
businesses and there is no overlap between ECC and Imetal with respect 
to fused magnesia, so retention of the fused magnesia businesses should 
not pose a problem under Section 7 of the Clayton Act. It may be, 
however, that the two plants together are more readily saleable than is 
the fused silica plant alone. For this reason, Section VI of the 
proposed Final Judgment provides that if the fused silica plant goes to 
a trustee for sale, the trustee may also sell the fused magnesia plant 
(together with all tangible and intangible assets used in connection 
with that plant).

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final 
Judgment

    The United States and defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 
sixty days of the date of publication of this Competitive Impact 
Statement in the Federal Register. The United States will evaluate and 
respond to the comments. All comments will be given due consideration 
by the Department of Justice, which remains free to withdraw its 
consent to the proposed Final Judgment at any time prior to entry. The 
comments and the response of the United States will be filed with the 
Court and published in the Federal Register.
    Written comments should be submitted to: J. Robert Kramer, II, 
Chief, Litigation II Section, Antitrust Division, United States 
Department of Justice, 1401 H Street, NW., Suite 3000, Washington, DC 
20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, with respect to kaolin, simply 
requiring divestiture of the DBK plant. Diverstitute of the DBK plant 
has two advantages over divestiture of the Sandersville No. 1 water-
washed kaolin plant: (1) it would essentially put the purchaser in the 
same position as Imetal before the tender offer; and (2) unlike 
Sandersville No. 1, the DBK plant has been operated as a stand-alone 
business and has a clear track record as such.
    The United States ultimately adopted the framework of the proposed 
Final Judgment, however, because it concluded that a divestiture of the 
Sandersville No. 1 plant could, under the proper circumstances, 
effectively redress the likely anticompetitive effects of the proposed 
transaction. During the course of the investigation, defendant ECC 
entered into pre-settlement negotiations and signed a preliminary 
Letter of Intent with Thiele Kaolin Company for the sale of the 
Sandersville No. 1 plant. A purchase by Thiele would cause higher 
concentration than would result if the Sandersville No. 1 plant were 
sold to a firm outside the kaolin industry. However, both defendants 
and Thiele argued that the additional capacity would permit Thiele to 
better compete for large paper customers against the two industry 
leaders. While the United States did not ``pre-approve'' a sale to 
Thiele--the parties did not have a definitive agreement, and their 
Letter of Intent did not address at all some issues that would be 
important to plaintiff's evaluation of any proposed sale--plaintiff 
concluded that a divestiture of the type contemplated in the Letter of 
Intent could satisfy the United States' competitive concerns with 
respect to water-washed kaolin. Plaintiff therefore concluded that 
defendants should be permitted to try to divest the Sandersville No. 1 
plant if they so chose.
    The United States also considered, as an alternative to the 
proposed Final Judgment, a full trial on the merits against Imetal and 
ECC. The United States is satisfied that the divestitures required by 
the proposed Final Judgment will facilitate continued viable 
competition in the four relevant product markets alleged in the 
Complaint and will effectively prevent the anticompetitive effects that 
the Complaint alleges would result from the proposed acquisition.

VII. Standard of Review Under the APPA for the Proposed Final 
Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty-day comment 
period, after which the Court shall determine whether entry of the 
proposed Final Judgment ``is in the public interest.'' In making that 
determination, the Court may consider--

    (1) The competitive impact of such judgment, including 
termination of alleged violations provisions for enforcement and 
modification, duration or relief sought, anticipated effects of 
alternative remedies actually considered, and any other

[[Page 31638]]

considerations bearing upon the adequacy of such judgment;
    (2) The impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including consideration of the 
public benefit, if any, to be derived from a determination of the 
issues at trial.

15 U.S.C. Sec. 16(e). As the Court of Appeals for the District of 
Columbia Circuit held, the APPA permits a court to consider, among 
other things, the relationship between the remedy secured and the 
specific allegations set forth in the government's complaint, whether 
the decree is sufficiently clear, whether enforcement mechanisms are 
sufficient, and whether the decree may positively harm third parties. 
See United States v. Microsoft, 56 F.3d 1448, 1458-62 (D.C. Cir. 1995). 
The courts have recognized that the term ```public interest' take[s] 
meaning from the purposes of the regulatory legislation.'' NAACP v. 
Federal Power Comm'n, 425 U.S. 662, 669 (1976). Since the purpose of 
the antitrust laws is to preserve ``free and unfettered competition as 
the rule of trade,'' Northern Pacific Railway Co. v. United States, 356 
U.S. 1, 4 (1958), the focus of the ``public interest'' inquiry under 
the APPA is whether the proposed Final Judgment would serve the public 
interest in free and unfettered competition. United States v. American 
Cyanamid Co., 719 F.2d 558, 565 (2d Cir. 1983), cert. denied, 465 U.S. 
1101 (1984); United States v. Waste Management, Inc., 1985-2 Trade Cas. 
para.66,651, at 63,046 (D.D.C. 1985). In conducting this inquiry, ``the 
Court is nowhere compelled to go to trial or to engage in extended 
proceedings which might have the effect of vitiating the benefits of 
prompt and less costly settlement through the consent decree process.'' 
\5\ Rather,
---------------------------------------------------------------------------

    \5\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette 
Co., 406 F.Supp. 713, 715 (D.Mass. 1975). A ``public interest'' 
determination can be made properly on the basis of the Competitive 
Impact Statement and Response to Comments filed pursuant to the 
APPA. Although the APPA authorizes the use of additional procedures, 
15 U.S.C. Sec. 16(f), those procedures are discretionary. A court 
need not invoke any of them unless it believes that the comments 
have raised significant issues and that further proceedings would 
aid the court in resolving those issues. See H.R. 93-1463, 93rd 
Cong. 2d Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News 
6535, 6538.

[a]bsent a showing of corrupt failure of the government to discharge 
its duty, the Court, in making its public interest finding, should * 
* * carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
---------------------------------------------------------------------------
circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. 
para.61,508, at 71,980 (W.D. Mo. 1977).
    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F.2d 456, 462 (9th Cir. 1988), quoting United States v. Betchtel 
Corp., 648 F.2d 660, 666 (9th Cir.), cert denied, 454 U.S. 1083 (1981). 
See also Microsoft, 56 F.3d 1448 (D.C. Cir. 1995). Precedent requires 
that:

the balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is `within the reaches of the public 
interest.' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.\6\

    \6\ United States v. Bechtel, 648 F.2d at 666 (citations 
omitted) (emphasis added); see United States v. BNS, Inc., 858 F.2d 
at 463; United States v. National Broadcasting Co., 449 F. Supp. 
1127, 1143 (C.D. Cal. 1979); United States v. Gillette Co., 406 F. 
Supp. at 716. See also United States v. American Cyanamid Co., 719 
F.2d at 565.
---------------------------------------------------------------------------

    A proposed consent decree in an agreement between the parties which 
is reached after exhaustive negotiations and discussions. Parties do 
not hastily and thoughtlessly stipulate to a decree because, in doing 
so, they

waive their right to litigate the issues involved in the case and 
thus save themselves the time, expense, and inevitable risk of 
litigation. Naturally, the agreement reached normally embodies a 
compromise; in exchange for the saving of cost and the elimination 
of risk, the parties each give up something they might have won had 
they proceeded with the litigation.

United States v. Armour & Co., 402 U.S. 673, 681 (1971).
    The proposed Final Judgment therefore, should not be reviewed under 
a standard of whether it is certain to eliminate every anticompetitive 
effect of a particular practice or whether it mandates certainty of 
free competition in the future. Court approval of a proposed final 
judgment requires a standard more flexible and less strict that the 
standard required for a finding of liability. ``[A] proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of public interest.' (citations 
omitted).'' \7\
---------------------------------------------------------------------------

    \7\ United States v. American Tel. and Tel Co., 552 F. Supp. 
131, 150 (D.D.C. 1982), aff'd sub nom. Mayland v. United States, 460 
U.S. 1001 (1983), Quoting United States v. Gillette Co., supra, 406 
F. Supp. at 716; United States v. Alcan Aluminum, Ltd., 605 F. Supp. 
619, 622 (W.D. Ky. 1985).
---------------------------------------------------------------------------

VIII. Determinative Documents

    The only determinative document, within the meaning of the APPA, 
that was considered by the United States in formulating the proposed 
Final Judgment is the preliminary Letter of Intent between defendant 
ECC and Thiele Kaolin Company, a copy of which is attached as Exhibit 
A.

      Respectfully submitted.

    Dated: May 24, 1999.

For Plaintiff United States of America:

Patricia G. Chick,
D.C. Bar #266403, Trial Attorney, U.S. Department of Justice, Antitrust 
Division, 1401 H Street, N.W., Suite 3000, Washington, DC 20530, 
Telephone: (202) 307-0946, Facsimile: (202) 514-9033.

Exhibit A

    Exhibit A cannot be published in the Federal Register. A copy 
can be obtained from the Documents Office of the U.S. Department of 
Justice, Antitrust Division, 325 7th Street, N.W., Room 215, 
Washington, D.C. 20530, (202) 514-2481.

[FR Doc. 99-14470 Filed 6-10-99; 8:45 am]
BILLING CODE 4410-11-M