[Federal Register Volume 67, Number 89 (Wednesday, May 8, 2002)]
[Notices]
[Pages 30929-30930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11386]


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FEDERAL TRADE COMMISSION

[File No. 021 0067]


Solvay S.A.; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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

DATES: Comments must be received on or before June 3, 2002.

ADDRESSES: Comments filed in paper form should be directed to: FTC/
Office of the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. Comments filed in electronic form should be 
directed to: [email protected], as prescribed below.

FOR FURTHER INFORMATION CONTACT: Richard Liebeskind, Bureau of 
Competition, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 
326-2441.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Section 2.34 
of the Commission's Rules of Practice, 16 CFR 2.34, notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for May 2, 2002), on the World Wide Web, at ``http://www.ftc.gov/os/
2002/05/index.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, 
DC 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. Comments filed in paper form should 
be directed to: FTC/Office of the Secretary, Room 159-H, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. If a comment contains 
nonpublic information, it must be filed in paper form, and the first 
page of the document must be clearly labeled ``confidential.'' Comments 
that do not contain any nonpublic information may instead be filed in 
electronic form (in ASCII format, WordPerfect, or Microsoft Word) as 
part of or as an attachment to email messages directed to the following 
email box: [email protected]. Such comments will be considered 
by the Commission and will be available for inspection and copying at 
its principal office in accordance with Section 4.9(b)(6)(ii) of the 
Commission's Rules of Practice, 16 CFR 4.9(b)(6)(ii)).

Analysis To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from Solvay S.A. (``Solvay'' or the ``Respondent''). The 
Consent Agreement is intended to resolve anticompetitive effects 
stemming from Solvay's proposed acquisition of Ausimont S.p.A. 
(``Ausimont'') from Italenergia S.p.A. The Consent Agreement includes a 
proposed Decision and Order (the ``Order'') which would require 
Respondent to divest Solvay's U.S. polyvinylidene fluoride (``PVDF'') 
operations (the ``Solvay Fluoropolymers Business''), including its 
Decatur, Alabama plant and its interest in the Alventia LLC joint 
venture, which manufacturers the main raw material for PVDF. The 
Consent Agreement also includes an Order to Hold Separate and Maintain 
Assets which requires Respondents to preserve the Solvay Fluoropolymers 
Business as a viable, competitive, and ongoing operation until the 
divestiture is achieved.

[[Page 30930]]

    The Consent Agreement, if finally accepted by the Commission, would 
settle charges that Solvay's proposed acquisition of Ausimont may have 
substantially lessened competition in two markets: PVDF, and melt-
processible PVDF. The Commission has reason to believe that Solvay's 
proposed acquisition of Ausimont would have violated Section 7 of the 
Clayton Act and Section 5 of the Federal Trade Commission Act.
    According to the Commission's proposed complaint, there are two 
relevant lines of commerce in which to analyze the effects of Solvay's 
proposed acquisition of Ausimont: the production and sale of all graded 
of PVDF; and the production and sale of melt-processible grades of 
PVDF. PVDF is a fluoropolymer used in a wide variety of applications, 
including highly durable architectural coatings, wire and cable 
jacketing, fiber optic raceways, chemical processing equipment, 
semiconductor manufacturing equipment, and other miscellaneous 
applications. The melt-processible grades include all PVDF grades 
except those used in coatings.
    The proposed complaint alleges that the markets for PVDF and melt-
processible PVDF are highly concentrated, and that the proposed 
acquisition of Ausimont by Solvay would increase concentration in those 
markets. The proposed complaint also alleges hat entry into the 
relevant markets would not be timely, likely, or sufficient to deter or 
offset the acquisition's adverse competitive effects. Producers employ 
proprietary technology to manufacture PVDF, and new entry would likely 
required entry into the production of VF2, which is a 
necessary raw material to produce PVDF. Entry would likely take as long 
as three years.
    The proposed complaint alleges that Solvay's acquisition of 
Ausimont would lessen competition by making coordinated interaction 
among the remaining producers more likely. The proposed compliant 
alleges that the acquisition would leave only two significant PVDF 
producers, that reliable pricing information is available from 
customers, and that the large number of customers in the industry would 
make cheating on any coordination easy to detect. The proposed 
complaint further alleges that Ausimont has been expanding its sales of 
melt-processible PVDF, and that the acquisition would limit the growing 
competition between Solvay and Ausimont in melt-processing grades of 
PVDF.
    The proposed Order is designed to remedy the anticompetitive 
effects of the acquisition in the market for PVDF and melt-processible 
PVDF by requiring the divestiture of Solvay's fluoropolymers business 
in the U.S. That business includes Solvay's PVDF manufacturing plant in 
Decatur, Alabama, and its interest in Alventia LLC (``Alventia''), a 
VF2 manufacturing joint venture. As part of the divestiture, 
the proposed Order would also require Solvay to provide to the Acquirer 
of the Solvay PVDF business a royalty-free license to Solvay's 
intellectual property, including detailed information about Solvay's 
production of PVDF at both Solvay's two plants, in Alabama and France. 
The scope of the license would allow the acquirer to manufacture or 
sell PVDF anywhere in the world. The proposed Order would further 
require the Respondent to divest other assets related to the Solvay 
PVDF business, including real property, customer lists, contracts, 
patents, inventories, and other intangible assets and goodwill used to 
operate the business.
    The proposed Order requires that Respondents divest the Solvay 
Fluoropolymers Business to an acquirer approved by the Commission 
within one-hundred and eighty (180) days from the date upon which 
Solvay consummates its acquisition of Ausimont. The proposed Order also 
provides that if Solvay does not complete its divestiture within that 
period, the Commission may appoint a Divestiture Trustee to divest the 
Solvay Fluoropolymers Business in a manner acceptable to the 
Commission, or may require divestiture of Ausimont's PVDF business, 
including its VF2 and PVDF manufacturing operations in 
Thorofare, New Jersey. The proposed Order also provides for the 
Commission to appoint a Monitor Trustee to oversee Solvay's compliance 
with the terms of the proposed Order and the divestiture agreements 
that Solvay enters pursuant to the proposed Order.
    The proposed Order to Hold Separate and Maintain Assets that it 
also included in the Consent Agreement requires that Respondent hold 
separate and maintain the viability of Solvay's PVDF business as a 
viable and competitive operation, and to maintain the viability of 
Ausimont's PVDF business, until either business is transferred to the 
Commission-approved acquirer. Furthermore, it contains measures 
designed to ensure that no material confidential information is 
exchanged between Respondent and the Solvay PVDF business (except as 
otherwise provided in the Order to Hold Separate and Maintain Assets) 
and measures designed to prevent interim harm to competition in the 
PVDF market pending divestiture. The Order to Hold Separate and 
Maintain Assets provides for the Commission to appoint a Hold Separate 
Trustee who is charged with the duty of monitoring Respondent's 
compliance with the Order to Hold Separate and Maintain Assets.
    The proposed Order requires Respondent to provide the Commission, 
within thirty (30) days from the date the Order becomes final, a 
verified written report setting forth in detail the manner and form in 
which the Respondent intends to comply, is complying, and has complied 
with the provisions relating to the proposed Order and the Order to 
Hold Separate and Maintain Assets. The proposed Order further requires 
Respondent to provide the Commission with a report of compliance with 
the Order every thirty (30) days after the date when the Order becomes 
final until the divestiture has been completed.
    The proposed Order has been placed on the public record for thirty 
(30) days to receive comments by interested persons. Comments received 
during this period will become part of the public record. After thirty 
(30) days, the Commission will review the Consent Agreement and 
comments received and decide whether to withdraw its agreement or make 
final the Consent Agreement's proposed Order and Order to Hold Separate 
and Maintain Assets.
    The purpose of this analysis is to facilitate public comment on the 
proposed Order. This analysis is not intended to constitute an official 
interpretation of the Consent Agreement, the proposed Order, or the 
Order to Hold Separate and Maintain Assets or in any way to modify the 
terms of the Consent Agreement, the proposed Order, or the Order to 
Hold Separate and Maintain Assets.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 02-11386 Filed 5-7-02; 8:45 am]
BILLING CODE 6750-01-M