[Federal Register Volume 67, Number 110 (Friday, June 7, 2002)]
[Notices]
[Pages 39395-39399]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-14336]


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FEDERAL TRADE COMMISSION

[File No. 011 0199]


Bayer AG and Aventis 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 
Air Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before July 1, 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: Joseph Simons or Wallace Easterling, 
Bureau of Competition, 600 Pennsylvania Avenue, NW., Washington, DC 
20580, (202) 326-3300 or 326-2936.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec. 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 30, 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 e-mail messages directed to the 
following e-mail 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 Sec. 4.9(b)(6)(ii) 
of the Commission's rules of practice, 16 CFR 4.9(b)(6)(ii)).

[[Page 39396]]

Analysis of the Complaint and Proposed Consent Order to Aid Public 
Comment

I. Introduction

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from Bayer AG (``Bayer'') and Aventis S.A. (``Aventis'') 
(collectively ``Respondents''). The Consent Agreement is intended to 
resolve anticompetitive effects stemming from Bayer's proposed 
acquisition of Aventis CropScience Holding S.A. (``ACS'') from Aventis. 
The Consent Agreement includes a proposed Decision and Order (the 
``Order''), which would require Respondents to divest ACS's 
acetamiprid, fipronil and tribufos business, including its fipronil 
production facility in Elbeuf, France, and Bayer's flucarbazone 
business, to an acquirer or acquirers approved by the Commission and in 
a manner approved by the Commission. The Consent Agreement also 
includes an Order to Hold Separate and Maintain Assets, which requires 
Respondents to preserve the acetamiprid, fipronil and flucarbazone 
operations as a viable, competitive and ongoing operation until the 
divestitures are completed.
    The Consent Agreement, if finally accepted by the Commission, would 
settle charges that Bayer's proposed acquisition of ACS may have 
substantially lessened competition in the markets for New Generation 
Chemical Insecticide Active Ingredients; New Generation Chemical 
Insecticide Products (including but not limited to (i) crop specific 
end uses, (ii) veterinary channel companion animal flea and tick 
control products and (iii) non-repellent liquid termiticides); Post-
Emergent Grass Herbicides for Spring Wheat; and Cool Weather Cotton 
Defoliants. The Commission has reason to believe that Bayer's proposed 
acquisition of ACS would have violated Section 7 of the Clayton Act and 
Section 5 of the Federal Trade Commission Act, as alleged in the 
Commission's proposed complaint.

II. The Proposed Complaint

    According to the Commission's proposed complaint, there are several 
relevant lines of commerce in which to analyze the effects of Bayer's 
proposed acquisition of ACS. including: (1) New Generation Chemical 
Insecticide Active Ingredients; (2) New Generation Chemical Insecticide 
Products; (3) Post-Emergent Grass Herbicides for Spring Wheat; and (4) 
Cool Weather Cotton Defoliants.
    The proposed complaint alleges that the United States is the 
relevant geographic market and section of the country within which to 
analyze the likely effects the combination of Bayer and ACS.

A. New Generation Chemical Insecticide Active Ingredients

    The proposed complaint alleges that relevant lines of commerce in 
which to analyze the effects of the proposed merger are new generation 
chemical insecticide active ingredients and related technologies (``New 
Generation Chemical Insecticide Active Ingredients'') for specific end 
use applications, including the development, manufacture and sale off 
insect6icides for use as non-repellent termiticides, flea control for 
companion animals, and for use on an array of crop applications such as 
corn, cotton, citrus, cole crops, grapes, vegetables, for turf and 
ornamental uses, and as protection for seeds and seedlings (``seed 
treatments''). New Generation Chemical Insecticide Active Ingredients 
are chemicals that are designed to kill undesirable insects but that, 
unlike older insecticide active ingredients, are less harmful to human 
health and the environment. These New Generation Chemical Insecticide 
Active Ingredients include imidacloprid, acetamiprid, thiamethoxam, and 
other chloronicotinyls; and fipronil and other phenylpyrazoles.
    According to the Commission's proposed complaint, New Generation 
Chemical Insecticide Active Ingredients are used in applications where 
their characteristics provide superior performance and where they offer 
advantages as compared to older chemical insecticides. These advantages 
include reductions in the amount of chemical insecticides used 
(resulting in reduced negative impacts on the environment and human 
health), reduced risk to humans and beneficial insects due to the use 
of safer chemicals in comparison to older chemical insecticides, and 
superior control of certain undesirable pests. The proposed complaint 
alleges that many of these advantages are a result of competition in 
research and development. The proposed complaint also alleges that New 
Generation Chemical Insecticide Active Ingredients are of increasing 
importance as the EPA removes older insecticides from the market 
because of harmful effects on human health and the environment.
    The proposed complaint alleges that Bayer and Aventis are the firms 
that have been significant competitors in developing and 
commercializing New Generation Chemical Insecticide Active Ingredients; 
Syngenta Corporation is the only other firm with significant 
development and production of New Chemical Insecticide Active 
Ingredients.
    According to the Commission's proposed complaint, Bayer and Aventis 
are distinguished by their unique product development and 
commercialization skills relating to New Generation Chemical 
Insecticide Active Ingredients. The proposed complaint alleges that 
these unique skills have prompted competitors, through licensing, to 
allow Bayer and Aventis to develop products based on molecules other 
firms have discovered.
    The proposed complaint alleges that the acquisition would reduce 
actual, direct, and substantial competition, eliminate potential 
competition, increase barriers to entry, reduce innovation competition, 
increase Respondents' ability to exercise unilateral market power and 
substantially increase the level of concentration and enhance the 
probability of coordination in the relevant markets.

B. New Generation Chemical Insecticide Products

    The proposed complaint alleges that insecticide products based on 
New Generation Chemical Insecticide Active Ingredients (``New 
Generation Chemical Insecticide Products'') constitute relevant lines 
of commerce in which to analyze the effect of the proposed merger. New 
Generation Chemical Insecticide Products include, but are not limited 
to, (i) crop specific end uses, such as corn, cotton, citrus, cole 
crops, grapes, vegetables and seed treatments; (ii) veterinary channel 
companion animal flea control products; and (iii) non-repellent liquid 
termiticides.
    The proposed complaint alleges that New Generation Chemical 
Insecticide Active Ingredients provide New Generation Chemical 
Insecticide Products with advantages over older chemical insecticide 
products. The proposed complaint alleges that New Generation Chemical 
Insecticide Products are displacing older insecticide products as the 
EPA removes or limits the use of a significant number of these older 
harmful products.
    The proposed complaint alleges that New Generation Chemical 
Insecticide Products include separate relevant markets based on the 
specific applications in which the relevant products are used because 
the EPA requires a separate registration for each application in which 
the products will be used and suppliers price their products at 
different levels depending

[[Page 39397]]

on the specific end use application. The proposed complaint further 
alleges that New Generation Chemical Insecticide Products may 
constitute application specific relevant product markets such as: 
Termiticides, flea control for companion animals, specific crops or any 
application in which New Generation Insecticide Products are used.
    According to the proposed complaint, Bayer and Aventis are the 
leading firms in the development and commercialization of New 
Generation Chemical Insecticide Products and own significant 
intellectual property estates relating to these products. The proposed 
complaint alleges that Syngenta is the only other firm with significant 
sales of New Generation Chemical Insecticide Products.
    According to the Commission's proposed complaint, the proposed 
transaction would reduce the number of firms--from two to one in two 
relevant markets, and from three to two in other relevant markets. The 
proposed complaint alleges that Bayer and Aventis are the only firms 
currently selling New Generation Chemical Insecticide Products for non-
repellent liquid termiticides. The proposed complaint also alleges that 
Bayer and Aventis are the only firms that have developed and sold 
successful New Generation Chemical Insecticide products for use in the 
veterinary channel companion animal flea control application. The 
proposed complaint further alleges that Bayer, Aventis and Syngenta are 
the only firms producing and selling a range of New Generation Chemical 
Insecticide Products for a range of crop specific end uses.
    According to the proposed complaint, the acquisition would 
eliminate competition (including potential competition), increase 
barriers to entry, reduce innovation competition among developers of 
relevant products, increase Respondents' ability to exercise unilateral 
market power and substantially increase the level of concentration and 
enhance the probability of coordination in the relevant markets.

C. Post-Emergent Grass Herbicides for Spring Wheat

    According to the proposed complaint, herbicides are chemicals 
designed to kill or control grasses that interfere with crop 
production. The proposed complaint alleges that separate markets for 
herbicides may be distinguished by the type of weed controlled (grassy 
weed versus broadleaf weed) and the growth stage at which the herbicide 
is applied (pre-emergent versus post-emergent). The proposed complaint 
further alleges that post-emergent grass herbicides for spring wheat 
(``Spring Wheat Herbicides'') is a relevant product market in which to 
analyze the effects of Bayer's proposed acquisition of ACS.
    According to the Commission's proposed complaint, Aventis is the 
largest supplier of Spring Wheat Herbicides, accounting for almost 70 
percent of sales in 2001. The proposed complaint alleges that Aventis' 
leading product for post-emergent grass control for spring wheat is 
Puma, which contains the active ingredient fenoxaprop.The proposed 
complaint also alleges that in 2001, Bayer introduced Everest, which 
contains the active ingredient flucarbazone, and that Everest accounted 
for approximately 7 percent of sales in the market in that year.
    The Complaint alleges that the acquisition would eliminate price 
competition, increase the Respondents' ability to unilaterally raise 
price and increase the likelihood and degree of coordinated interaction 
among competitors in the market for Spring Wheat Herbicides.

D. Cool Weather Cotton Defoliants

    According to the Commission's proposed complaint, cotton defoliants 
are chemical harvest aids designed to remove leaves from cotton plants 
without drying them. The proposed complaint alleges that separate 
markets for cotton defoliants may be distinguished by method of action 
(defoliation versus desiccation) and by product efficacy in varying 
environmental conditions (cool weather versus warm weather). The 
Commission's proposed complaint further alleges that Cool Weather 
Cotton Defoliants are necessary for economical harvesting of premium 
grade cotton and constitutes a relevant product market in which to 
analyze the effects of the proposed acquisition.
    The proposed complaint alleges that Bayer and Aventis are the only 
two suppliers of Cool Weather Cotton Defoliants. The proposed complaint 
also alleges that both Bayer and Ventis offer products containing the 
active ingredient tribufos for cool weather cotton defoliation; Bayer 
offers the DEF product and Aventis offers the Folex product.
    The Commission's proposed complaint alleges that Bayer's proposed 
acquisition of ACS would eliminate competition between Bayer and 
Aventis in the market for Cool Weather Cotton Defoliants in the U.S., 
substantially increase the level of concentration, increase the 
likelihood that Respondents will unilaterally exercise market power and 
increase barriers to entry. The proposed complaint also alleges that 
the proposed acquisition would increase the likelihood that customers 
of Cool Weather Cotton Defoliants in the U.S. would be forced to pay 
higher prices.

E. Barriers to Entry Into the Relevant Product Markets

    The proposed complaint alleges that entry into the relevant markets 
for New Generation Chemical Insecticide Active Ingredients would 
require years of research, development, testing, registration and 
commercial scale production synthesis. The proposed complaint alleges 
that entry into the New Generation Chemical Insecticide Products market 
is an expensive and lengthy process that requires access to a New 
Generation Chemical Insecticide Active Ingredient, product development 
and EPA review, among other things. The proposed complaint further 
alleges that entry into the Spring Wheat Herbicides market can take 
seven to ten years, in part because a potential entrant would spend 
substantial time researching active molecules, developing promising 
molecules, and implementing the studies required by the EPA. The 
proposed complaint alleges that barriers to entry into the Cool Weather 
Cotton Defoliant market include distribution barriers, existing 
purchase and supply contracts and EPA regulations.

III. Terms of the Proposed Order

    The proposed Order is designed to remedy the alleged anti-
competitive effects of the proposed acquisition by requiring the 
divestiture of assets relating to four businesses: (1) Acetamiprid; (2) 
fipronil; (3) flucarbazone; and (4) Folex (tribufos). The proposed 
Order requires Respondents to divest the acetamiprid, fipronil, and 
flucarbazone businesses to acquirer(s) approved by the Commission, at 
no minimum price, not late than 180 days from the date that the 
Commission accepts the proposed Order for public comment. If this 
divestiture does not occur by that date, the proposed Order allows the 
Commission to appoint a trustee to sell the divestiture assets or 
additional assets, to acquirer(s) approved by the Commission.

A. Acetamiprid

    Section II. of the proposed Order requires Respondents to divest 
ACS's worldwide assets relating to the acetamiprid business. However, 
the

[[Page 39398]]

proposed Order does not require Bayer to divest the acetamiprid 
business in Mexico, South America, Central America or Africa in the 
event that Nippon Soda, the acetamiprid licensor, does not consent to 
the assignment of the acetamiprid agreements relating exclusively to 
these regions.
    Paragraph II.E. of the proposed Order permits the Commission-
approved acquirer, at its discretion, to license back to Bayer any 
intellectual property that is not related primarily to the acetamiprid 
business. This provision ensures that the Order will not prevent Bayer 
from obtaining exclusive rights to develop, make, sell or import any 
new insecticide products that are in the same chemical family as 
acetamiprid. Thus, both the acquirer and Bayer will have the right to 
invent, patent, and develop new compounds in the chemical family to 
which acetamiprid belongs.
    The proposed Order also provides that if Bayer fails to divest its 
assets relating to the acetamiprid business within the time and manner 
described above, the Commission may appoint a divestiture trustee to 
divest those assets in a manner acceptable to the Commission, or may 
require divestiture of Bayer's assets relating to the thiacloprid 
business at no minimum price. The proposed Order provides that while 
Bayer may obtain a cross-license to any intellectual property included 
in the thacloprid business (provided that Bayer's license does not 
impair the viability of the thiacloprid business), this provision 
creates an additional thiacloprid supplier to compete directly with 
Bayer. The proposed Order provides that if Bayer obtains this cross-
license, Bayer can obtain a supply agreement of thiacloprid from the 
acquirer. Bayer may also obtain a supply of clothianidin from the 
acquirer because this chemical is produced in the same plant that 
produces thiacloprid. The Commission must approve all such supply 
agreements, licenses, and divestitures.

B. Fipronil

    Section III. of the proposed Order requires Respondents to divest 
all assets relating to ACS's fipronil business, including intellectual 
property, ACS's production facility in Elbeuf, France, and other 
assets.
    Paragraph III.D.2. of the proposed Order allows Bayer to license 
back any intellectual property included in the fipronil assets for non-
agricultural use, as described in Definition RR. This license back 
increases competition in the non-repellant liquid termiticide market as 
it enables both Bayer and the fipronil acquirer to bring products 
containing fipronil to the market.
    Paragraph III.E. of the proposed Order permits Bayer to enter into 
a supply agreement with the Commission-approved acquirer. The supply 
agreement allows the acquirer to supply fipronil to Bayer for non-
agricultural use for a term of two years, which may be extended subject 
to Commission approval. This supply arrangement may be necessary 
because of current supply contracts that obligate ACS to supply 
fipronil to third parties. The supply agreement may also allow the 
acquirer to supply intermediates to Bayer until the expiration of 
patents covering such intermiates. This may be necessary because Bayer 
may require the use of those intermediates in the production of its own 
chemicals.

C. Flucarbazone

    The proposed Order provides that Respondents will divest the 
flucarbazone assets, including tangible and intangible assets relating 
too the business of developing, manufacturing and selling all products 
containing the active ingredient flucarbazone worldwide. The divested 
assets exclude the manufacturing facility in Kansas City where 
flucarbazone is manufactured. This facility is also used to manufacture 
other Bayer herbicides that are not sold in the Spring Wheat Herbicide 
market.
    So long as Bayer divests the Everest assets to a Commission-
approved acquirer by the deadline described above, the proposed Order 
permits Bayer to exclusively retain its intellectual property rights 
that relate primarily to its Olympus (proxycarbazone) business. Under 
the license grant in Paragraph IV.C. of the proposed Order, both the 
Commission-approved acquirer and Bayer will have the right to invent, 
patent, and develop new compounds in the chemical family to which 
Everest (flucarbazone) and Olympus (propoxycarbazone) belong.
    In order to guarantee that Bayer will not block the Commission-
approved acquirer from operating the Everest (flucarbazone) business, 
Paragraph IV.C.2. of the proposed Order prohibits Bayer from suing the 
acquirer for patent infringement relating to the acquirer's actions in 
developing, making, selling or importing any product containing 
flucarbazone, except for those products containing propoxycarbazone 
(i.e. Bayer's Olympus business).
    Paragraph IV.E. of the proposed Order permits Bayer to supply the 
Commission-approved acquirer with flucarbazone products for an interim 
period of 30 months from the date Bayer divests the Everest 
(flucarbazone) business. This supply arrangement may be necessary 
because the acquirer is unlikely to have sufficient time to set-up an 
independent capability for manufacturing flucarbazone and formulating 
flucarbazone-based products in time for the 2003 spring wheat crop. The 
proposed Order sets up parameters for the supply relationship between 
Bayer and the acquirer, including requiring Bayer to supply the 
acquirer with sufficient quantities of flucarbazone in a timely manner 
and requiring Bayer to charge a reasonable price that is based on its 
direct costs of providing the acquirer with flucarbzaone and other 
related services.
    Finally, in the event Bayer does not divest its Everest 
(flucarbzaone) business by the deadline described above, Sections X. 
and XII. of the proposed Order require Bayer to additionally divest its 
Olympus (propoxycarbazone) business, and the plant in Kansas City where 
it manufactures flucarbazone and propoxycarbazone, to a Commission-
approved acquirer that may not license the business back to Bayer. 
Additionally, Paragraph XII.A.2. of the proposed order prohibits Bayer 
from suing the acquirer for patent infringement relating to the 
acquirer's actions in developing, making, selling or importing any 
product containing propoxycarbazone.

D. Folex

    The provisions in Section V. of the proposed Order requires 
Respondent to divest assets relating to Folex, which contains the 
active ingredient tribufos, and to assign ACS's rights under the 
tribufos supply agreement to Amvac Corporation (``Amvac'') no later 
than twenty days from the date the Commission accepts the Consent for 
public comment. Amvac is a manufacturer that purchases proprietary 
molecules from discovery firms and commercializes these molecules. 
Under the supply agreement, Amvac may purchase tribufos from Bayer. 
Amvac also has the capability to manufacture its own tribufos.
    If the Commission, at the time that it makes the Order final, 
notifies Bayer that it does not approve of the proposed divestiture to 
Amvac, or of the manner of the divestiture, the proposed Order provides 
that Bayer would terminate or rescind the sale to Amvac and divest the 
Folex business within 180 days, at no minimum price, to a Commission-
approved acquirer.

[[Page 39399]]

E. Other Elements of the Order

    According to the proposed Order, Bayer shall provide technical 
assistance to the acquirer(s) of the assets relating to the 
acetamiprid, dipronil, flucarbazone and Folex businesses upon their 
request. Because Respondents' employees have likely developed expertise 
in the manufacture of these chemicals and other operations of the 
businesses, this technical assistance provision ensures that the 
acquirer(s) can obtain the capability to operate the businesses as 
efficiently as Respondents.
    Section VI. of the proposed Order contains various provisions which 
aid the Commission-approved acquirers in hiring Respondents' employees 
with experience in the divested businesses. Respondents must provide 
the acquirers with the names of these employees and access to personnel 
files and other documents relating to the employees' performance. 
Moreover, for a subset of employees considered to have a ``key'' role 
in the divested businesses, Respondents must pay such employees a bonus 
if they accept an employment offer from the acquirers within the first 
thirty days after the relevant divestiture.
    The proposed Order also provides for the Commission to appoint a 
monitor trustee to oversee Bayer's compliance with the terms of the 
proposed Order and the divestiture agreements that Bayer enters 
pursuant to the proposed Order.
    The proposed Order requires Respondents to provide the Commission, 
within sixty days from the date the Order becomes final, a verified 
written report setting forth in detail the manner and form in which the 
Respondents intend 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 sixty days after the date when the Order becomes final 
until the divestitures have been completed.
    According to the proposed Order, Bayer shall provide the Commission 
with advance written notice prior to acquiring any interest of or 
entering into a joint venture with Merial unless such transaction 
requires notification pursuant to section 7A of the Clayton Act, 15 
U.S.C. 18a. Merial is a joint venture between Aventis S.A. and Merck. 
Prior to the proposed transaction, ACS supplied fipronil to Merial for 
use in its Frontline flea and tick control product. ACS also provided a 
crop protection pipeline of new insecticide molecules that may have 
application in animal health. Following the proposed transaction, 
Merial may wish to reform the existing research and development 
agreement, or form a research and development technology venture with 
Bayer. Prior notification will allow the Commission to investigate 
whether such a partnership would have appropriate safeguards to obtain 
the benefits of joint development without negatively impacting 
competition in downstream animal health products.

F. The Order To Hold Separate and Maintain Assets

    The proposed Order to Hold Separate and Maintain Assets that is 
also included in the Consent Agreement requires that Respondent hold 
separate and maintain the viability of the acetamiprid, fipronil, and 
flucarbazone businesses.

IV. Opportunity for Public Comment

    The proposed Order has been placed on the public record for thirty 
days to receive comments from interested persons. Comments received 
during this period will become part of the public record. After thirty 
days, the Commission will review the Consent Agreement and comments 
received and will 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 Asset 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.
Benjamin I. Berman,
Acting Secretary.

Statement of Commissioner Mozelle W. Thompson

In the Matter of Bayer/Aventis AG, File No. 011 0199

    Today, I have joined in the Commission's vote to accept for public 
comment a proposed consent agreement and order resolving competitive 
issues stemming from Bayer AG's proposed acquisition of Aventis 
CropScience Holding S.A. Although I believe that in this matter the 
proposed consent agreement and order adequately address the 
Commission's concerns, I write separately to underscore that consent 
order divestiture provisions for which a buyer has not yet been 
identified will continue to be closely scrutinized in order to ensure 
that the asset package is sufficient and that a qualified buyer will 
likely be found.
    The value of having ``up front'' buyers is explained in the 
Commission's 1999 Divestiture Study,\1\ which reviews Commission 
divestiture orders issued between 1990 and 1994. This value has only 
increased as we review more complex transactions in interconnected 
markets. In cases where there are questions about asset sufficiency or 
buyer qualifications, or where the Commission determines that there are 
other risks to the proposed divestiture, I believe that presentation of 
an up front buyer will be required.\2\

    \1\ A Study of the Commission's Divestiture Process, Staff of 
the Bureau of Competition (1999), available at http://www.ftc.gov/os/1999/9908/divestiture.pdf. ``The ``up front' divestiture not only 
reduces the opportunity for interim competitive harm by expediting 
the divestiture process, but it assures at the outset that there 
will be an acceptable buyer for the to-be-divested assets.'' Id. at 
39.
    \2\ Indeed, it is the Commission's prerogative to require an up 
front buyer in any merger warranting divestiture(s), and it will do 
so when it has less than complete confidence that all risks to the 
efficacy of the proposed relief have been minimized. For more 
information regarding ``up front'' buyers, please see ``Frequently 
Asked Questions About Merger Consent Order Provisions,'' available 
at http://www.ftc.gov/bc/mergerfaq.htm.
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[FR Doc. 02-14336 Filed 6-6-02; 8:45 am]
BILLING CODE 6750-01-M