[Federal Register Volume 69, Number 186 (Monday, September 27, 2004)]
[Notices]
[Pages 57716-57736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21548]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Syngenta AG, AstraZeneca PLC, Koniklijke 
Cooperatie Cosun U.A. and Advanta B.V. Competitive Impact Statement, 
Proposed Final Judgment and Complaint

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. section 16(b) through (h), that a proposed 
Final Judgment, Hold Separate Stipulation and Order, and Competitive 
Impact Statement have been filed with the United States District Court 
for the District of Columbia in United States of America v.  Syngenta 
AG, et al., Civil Case No. 04 CV-1442. On August 25, 2004, the United 
States filed a Complaint alleging that the proposed acquisition by 
Syngenta AG (``Syngenta'') of Advanta B.V. (``Advanta''), a seed 
company jointly owned by two European companies, would violate section 
7 of the Clayton Act, 15 U.S.C. 18. The proposed Final Judgment, filed 
the same time as the Complaint, requires Syngenta to divest Advanta's 
world-wide sugar beet seed business. Copies of the Complaint, proposed 
Final Judgment, Hold Separate Stipulation and Order, and Competitive 
Impact Statement are available for inspection at the Department of 
Justice in Washington, DC in Suite 215 North, 325 7th Street, NW., 
Washington, DC 20530 (telephone 202/514-2692), and at the Clerk's 
Office of the U.S. Court for the District of Columbia, 333 Constitution 
Avenue, NW., Washington, DC 20001.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to Roger W. Fones, Chief, Transportation, Energy, and Agriculture 
Section, Antitrust Division, U.S. Department of Justice, 325 7th 
Street, NW., Suite 500, Washington, DC 20530 (telephone: 202/307-6351).

J. Robert Kramer, II,
Director of Operations, Antitrust Division.

Competitive Impact Statement

    Plaintiff United States of America (``United States''), pursuant to 
section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or 
``Tunney Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact 
Statement relating to the proposed Final Judgment submitted for entry 
in this civil antitrust proceeding.

[[Page 57717]]

I. Nature and Purpose of the Proceeding

    On May 11, 2004, Syngenta AG (``Syngenta''), Syngenta Crop 
Protection AG, AstraZeneca Holdings B.V., AstraZeneca PLC, Koninklijke 
Vanderhave Groep B.V., and Koninklijke Cooperatie Cosun U.A. entered 
into an agreement under which Syngenta would purchase all the assets of 
Advanta B.V. (``Advanta''), a seed company jointly owned by AstraZeneca 
Holdings B.V. and Koninklijke Vanderhave Groep, B.V. The United States 
filed a civil antitrust Complaint on August 25, 2004, seeking to enjoin 
the proposed acquisition. The Complaint alleges that the acquisition 
likely would substantially lessen competition in the market for sugar 
beet seeds suitable for growing in the United States, in violation of 
section 7 of the Clayton Act. As a result of this loss of competition, 
prices of sugar beet seeds likely would increase and fewer new or 
improved sugar beet seed varieties likely would be developed, to the 
detriment of purchasers of sugar beet seeds, sugar beet processors, and 
consumers of sugar beet-based products.
    At the same time the Complaint was filed, the United States also 
filed a proposed Final Judgment and Hold Separate Stipulation and 
Order, which are designed to eliminate the anticompetitive effects of 
the acquisition. Under the proposed Final Judgment, which is explained 
more fully below, Syngenta is required divest the worldwide sugar beet 
seed business of Advanta. Under the terms of the proposed Final 
Judgment and Hold Separate Stipulation and Order, Syngenta will take 
certain steps to ensure that Advanta's sugar beet seed business is 
operated as a competitively independent, economically viable, and 
ongoing business concern that remains independent and uninfluenced by 
the consummation of the acquisition, and that competition is maintained 
during the pendency of the ordered divestiture.
    The United States 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 this 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 Events Giving Rise to the Alleged Violation

A. Defendants and the Proposed Transaction
    Syngenta is a corporation organized and existing under the laws of 
Switzerland, with its principal offices in Basel, Switzerland. Syngenta 
is the ultimate parent entity of Syngenta Crop Protection AG. Syngenta 
is engaged in the development, production, and sale of agricultural 
products, including pesticides and seeds. Syngenta's total sales in 
2003 were approximately $6.6 billion. In 2003, Syngenta's sales of 
sugar beet seeds in the United States were approximately $10 million; 
its global sugar beet seed sales were $99 million.
    AstraZeneca PLC is a private limited company with its headquarters 
in London, England. AstraZeneca PLC is the ultimate parent entity of 
AstraZeneca Holdings B.V. Koninklijke Cooperatie Cosun U.A. is a 
cooperative with its headquarters in Cosunpark 1, the Netherlands. 
Koninklijke Cooperatie Cosun U.A. is the ultimate parent entity of 
Koninklijke Vanderhave Groep B.V.
    Advanta is a company incorporated in the Netherlands with its 
headquarters in Kapelle, the Netherlands. AstraZeneca Holdings B.V. and 
Koninklijke Vanderhave Groep B.V. each hold 50% of the shares of 
Advanta. Advanta sells various kinds of agricultural seeds throughout 
the world, with global sales of 444 million euros ($548 million) in 
2003. Advanta sells sugar beet seeds in the United States through its 
business unit Interstate Seeds. Advanta also markets sugar beet seeds 
in the United States through collaborations with Holly Hybrids, Seedex, 
and Croplan. In 2003, Advanta directly and through these collaborations 
had sugar beet seed sales of about $7 million in the United States.
    Syngenta's acquisition of Advanta, as initially agreed to by 
Defendants on May 11, 2004, would lessen competition substantially in 
the market for sugar beet seeds suitable for growing in the United 
States. This acquisition is the subject of the Complaint and proposed 
Final Judgment filed by the United States on August 25, 2004.
B. The Effects of the Transaction on Competition for Sugar Beet Seeds 
Suitable for Growing in the United States
    Sugar beet seeds are used by growers to produce sugar beets, which 
in turn are sold to sugar beet processors, who convert them into sugar 
for human consumption. Sugar beet growers in the United States 
purchased $50 million worth of sugar beet seeds in 2003.
    Sugar beets are grown under many different climatic and 
environmental conditions throughout the United States. These different 
growing regions require sugar beet varieties with different 
characteristics. A sugar beet seed company identifies desirable traits 
for each region and breeds those traits into new varieties.
    Advanta and Syngenta each have invested extensively in sugar beet 
seed research and development programs over a number of decades. 
Syngenta has breeding facilities in Longmont, Colorado and in Western 
Europe. Advanta also has several breeding facilities, all in Europe. 
Both develop sugar beet varieties specifically for the unique growing 
conditions found in various regions of the United States. For example, 
a sugar beet seed variety that is suitable for cultivation in France is 
not likely, without further development, to be suitable or attractive 
to growers in Minnesota or Idaho. The seed companies have not been 
equally successful in developing seeds for the various growing regions 
of the United States, and they compete to improve their sales in each 
region by developing seeds with better disease resistance, yield per 
acre, and sugar content.
    Developing marketable sugar beet seeds can take five to ten years. 
During this development period, the seed developer will conduct coded 
registration trials in the region where the beet is intended to be 
grown. The results of these field trials are used to determine which 
new varieties will be submitted to sugar beet processors for coded 
registration trials. Each sugar beet processor in the United States 
annually conducts coded registration trials to select varieties of 
sugar beet seeds to recommend to the growers in the processor's growing 
region. These trials take two to three years to complete. Sugar beet 
growers typically will select for purchase only seed varieties that 
have been tested and recommended by the sugar processors to which they 
intend to market their crops.
    Sugar beet seed companies that have processor-approved varieties 
compete for sales to growers based upon price and characteristics 
desired by growers, for example, traits that lower production costs, 
offer higher yield per acre, or provide resistance to diseases and 
pests prevalent in the growers' geographic region.
    Syngenta develops and sells sugar beet seeds in the United States 
under the brand name Hilleshog. Syngenta accounts for nearly 20% of all 
the sugar beets seed developed and sold in the United States. Advanta 
sells sugar beet seeds through its business unit,

[[Page 57718]]

Interstate Seeds, under the brand name Vanderhave. Sugar beet seeds 
bred from genetic material developed by Advanta are also sold in the 
United States by Holly Hybrids and other companies. Advanta-bred sugar 
beet seed account for more than 16% of the seeds sold in the United 
States.
    The market in the United States for sugar beet seeds suitable for 
growing in the United States is highly concentrated. Syngenta and 
Advanta are two of only three significant firms that develop sugar beet 
seeds for cultivation in the United States. The market for sugar beet 
seeds suitable for growing in the United States will become 
substantially more concentrated if Syngenta acquires Advanta. 
Syngenta's acquisition of Advanta will lessen competition substantially 
and make more likely increased prices and a slower pace of innovation.
    New entry is not likely to thwart these anticompetitive effects. 
Successful entry into the sugar beet seed business is difficult, time 
consuming, and costly. Developing a new sugar beet seed variety can 
take five to ten years. Completing the trial tests required by a sugar 
beet processing company for acceptance on the processor's approved list 
of varieties can take an additional two to three years.

III. Explanation of the Proposed Final Judgment

    The divestiture requirement of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in sugar beet 
seeds by establishing a new, independent, and economically viable 
competitor. The proposed Final Judgment requires Syngenta, within 90 
days after the filing of the Complaint, or 5 days after notice of the 
entry of the Final Judgment by the Court, whichever is later, to 
divest, as a viable ongoing business, Advanta's worldwide sugar beet 
seed business. These assets include all tangible and intangible assets 
necessary to run Advanta's worldwide sugar beet seed operations, 
including research and development facilities, customer lists and 
contracts, all registered plant breeders rights, and licenses. The 
United States may extend the period of time available to Syngenta to 
complete the divestiture up to an additional 120 days.
    The proposed Final Judgment requires divestment of Advanta's 
worldwide sugar beet seed business, including two major research 
facilities located in Europe that focus on sugar beet seeds: a facility 
in Rilland-Bath, the Netherlands; and a facility in Tienen, Belgium. At 
these facilities, Advanta also develops sugar beet seeds with 
characteristics desirable for production in the United States, such as 
beets that are resistant to diseases found in the U.S., but not in 
Europe. Advanta then contracts with a U.S.-based company to grow the 
varieties of seeds it intends for the U.S. market. Requiring the 
divestiture of Advanta's worldwide sugar beet seed business, including 
these European operations, will insure that the acquire will have the 
assets necessary to continue to develop sugar beet seeds suitable for 
growing in the United States, as well as to produce and sell those 
seeds.
    The assets must be divested in such a way as to satisfy the United 
States in its sole discretion that the operations can and will be 
operated by the purchaser as a viable, ongoing business that can 
compete effectively in the relevant market. Defendants must take all 
reasonable steps necessary to accomplish the divestiture quickly and 
shall cooperate with prospective purchasers.
    In the event that Syngenta does not accomplish the divestiture 
within the periods prescribed in the proposed Final Judgment, the Final 
Judgment provides that the Court will appoint a trustee selected by the 
United States to effect the divestiture. If a trustee is appointed, the 
proposed Final Judgment provides that Syngenta will pay all costs and 
expenses of the trustee. The trustee's commission will be structured so 
as to provide an incentive for the trustee based on the price obtained 
and the speed with which the divestiture is accomplished. After his or 
her appointment becomes effective, the trustee will file monthly 
reports with the Court and the United States setting forth his or her 
efforts to accomplish the divestiture. At the end of six months, if the 
divestiture has not been accomplished, the trustee and the United 
States will make recommendations to the Court, which shall enter such 
orders as appropriate to carry out the purpose of the trust, including 
extending the trust or the term of the trustee's appointment.
    The divestiture provisions of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition on the market 
for sugar beet seeds suitable for growing in the United States.

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. All comments received during this 
period will be considered by the Department of Justice, which remains 
free to withdraw its consent to the proposed Final Judgment at any time 
prior to the Court's entry of judgment. 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: Roger W. Fones, Chief, 
Transportation, Energy & Agriculture Section, Antitrust Division, 
United States Department of Justice, 325 Seventh Street, NW., Suite 
500, 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, as an alternative to the proposed 
Final Judgment, a full trial on the merits against Defendants. The 
United States could have continued the litigation and sought 
preliminary and permanent injunctions against Syngenta's acquisition of 
Advanta. The United

[[Page 57719]]

States is satisfied, however, that the divestiture of assets described 
in the proposed Final Judgment will preserve competition for the 
development, production, and sale of sugar beet seeds suitable for 
growing in the United States.

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.'' 15 U.S.C. 
16(e)(1). In making that determination, the Court shall consider:
    (A) The competitive impact of such judgment, including termination 
of alleged violations, provisions for enforcement and modification, 
duration of relief sought, anticipated effects of alternative remedies 
actually considered, whether its terms are ambiguous, and any other 
competitive considerations bearing upon the adequacy of such judgment 
that the court deems necessary to a determination of whether the 
consent judgment is in the public interest; and
    (B) The impact of entry of such judgment upon competition in the 
relevant market or markets, 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. 16(e)(1)(A) & 
(B). As the United States Court of Appeals for the District of Columbia 
Circuit has 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 Corp., 56 F.3d 1448, 1448-62 (D.C. Cir. 1995).
    ``Nothing in this section shall be construed to require the court 
to conduct an evidentiary hearing or to require the court to permit 
anyone to intervene.'' 15 U.S.C. 16(e)(2). Thus, in conducting this 
inquiry, ``[t]he 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.'' 119 Cong. Rec. 24,598 (1973) (statement of Senator 
Tunney).\1\ Rather:
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    \1\ See United States v. Gillette Co., 406 F. Supp. 713, 716 (D. 
Mass. 1975) (recognizing it was not the court's duty to settle; 
rather, the court must only answer ``whether the settlement achieved 
[was] within the reaches of the public interest''). A ``public 
interest'' determination can be made properly on the basis of the 
Competitive Impact Statement and Response to Comments filed by the 
Department of Justice pursuant to the APPA. Although the APPA 
authorizes the use of additional procedures, 15 U.S.C. 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. Rep. No. 93-1463, 93rd Cong., 2d Sess. 8-9 (1974), 
reprinted in 1974 U.S.C.C.A.N. 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 
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circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. (CCH) ] 
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) (citing United States v. Bechtel 
Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see also Microsoft, 56 F.3d 
at 1460-62. Courts have held that:

[t]he 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.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\2\
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    \2\ Cf. BNS, 858 F.2d at 463 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); Gillette, 406 F. Supp. at 716 
(noting that, in this way, the court is constrained to ``look at the 
overall picture not hypercritically, nor with a microscope, but with 
an artist's reducing glass''). See generally Microsoft, 56 F.3d at 
1461 (discussing whether ``the remedies [obtained I the decree are] 
so inconsonant with the allegations charged as to fall outside of 
the `reaches of the public interest' '').
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    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 
certainly of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than 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.' '' United 
States v. AT&T, 552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) 
(quoting Gillette, 406 F. Supp. at 716), aff'd sub nom. Maryland v. 
United States, 460 U.S. 1001 (1983); see also United States v. Alcan 
Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) (approving the 
consent decree even though the court would have imposed a greater 
remedy).
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the Court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459. Because the ``court's 
authority to review the decree depends entirely on the government's 
exercising its prosecutorial discretion by bringing a case in the first 
place,'' it follows that ``the court is only authorized to review the 
decree itself,'' and not to ``effectively redraft the complaint'' to 
inquire into other matters that the United States did not pursue. Id. 
at 1459-60.

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment. Dated: September 14, 2004.

Respectfully submitted,

 ``/s/''---------------------------------------------------------------

Angela L. Hughes, D.C. Bar # 303420.

Final Judgment

    Whereas, plaintiff, United States of America, filed its Complaint 
on August 25, 2004, plaintiff and defendants, by their respective 
attorneys, have consented to the entry of this Final Judgment without 
trial or adjudication of any issue of fact or law, and without this 
Final Judgment constituting any evidence against or admission by any 
party regarding any issue of fact or law;
    And whereas, the defendants agree to be bound by the provisions of 
this Final Judgment pending its approval by the Court;

[[Page 57720]]

    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of defendant Advanta's worldwide sugar beet seed 
business to assure that competition is not substantially lessened;
    And whereas, plaintiff requires defendant Syngenta to make a 
certain divestiture for the purpose of remedying the loss of 
competition alleged in the Complaint;
    And whereas, the defendants have represented to the United States 
that the divestiture required below can and will be made and that the 
defendants will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the divestiture 
provisions contained below;
    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is Ordered, Adjudged and Decreed:

I. Jurisdiction

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

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer'' or ``Acquirers'' means Fox Paine & Company, LLC or 
any alternative entity or entities to whom the defendant Syngenta 
divests Advanta's Sugar Beet Seed Business.
    B. ``Advanta'' means Advanta B.V., a company incorporated in The 
Netherlands with its headquarters in Kapelle, The Netherlands, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, joint ventures, and their directors, 
officers, managers, agents, and employees.
    C. ``Advanta's Sugar Beet Seed Business'' means Advanta's business 
engaged in the research, development, licensing (as licensor or as 
licensee), production or sale of agricultural sugar beet seeds anywhere 
in the world, including the business currently conducted through 
Interstate Seeds, a business unit of Advanta USA, Inc., and also 
includes:
    1. The assets set forth in Schedule A;
    2. All tangible assets other than those listed in Schedule A that 
are used in connection with Advanta's worldwide sugar beet seed 
operations, including but not limited to all research and development 
activities; all manufacturing and agricultural equipment, tooling and 
fixed assets, personal property, sugar beet seed inventory, germplasm, 
materials, supplies, and other tangible property; all licenses, 
permits, and authorizations issued by any governmental organization 
relating to Advanta's world-wide sugar beet seed operations; all 
contracts, agreements, leases, commitments, certifications, and 
understandings relating to Advanta's worldwide sugar beet seed 
operations, including supply and distribution agreements; all customer 
lists, contracts, accounts, and credit records; all performance records 
and all other records relating to Advanta's research, development, 
licensing, production or sale of sugar beet seed worldwide, provided, 
however, that the Advanta sugar beet seed assets to be divested shall 
not include Advanta facilities or assets that are predominantly used: 
(1) In connection with operations related to Advanta's worldwide non-
sugar beet seed activities; or (2) in connection with the carrying out 
of Advanta's company-wide administrative functions; and
    3. All intangible assets that are utilized in connection with 
Advanta's worldwide sugar beet seed operations, including but not 
limited to all patents, registered plant breeders' rights and 
trademarks; licenses and sublicenses; trade names; goodwill; service 
marks; service names; technical information; know-how; trade secrets; 
drawings; blueprints; designs; design protocols; specifications for 
materials; specifications for parts and devices; safety procedures for 
the handling of materials and substances; all research data concerning 
historic and current research and development; quality assurance and 
control procedures; design tools and simulation capability; all manuals 
and technical information Advanta provides to its employees, customers, 
suppliers, agents or licensees; and all research data concerning 
historic and current research and development efforts, including but 
not limited to designs of experiments and the results of successful and 
unsuccessful designs and experiments.
    D. ``AstraZeneca'' means AstraZeneca PLC, a private limited company 
with its headquarters in London, England, its successors and assigns, 
and its subsidiaries, divisions, groups, affiliates, partnerships and 
joint ventures (including AstraZeneca Holdings, a joint owner of 
Advanta) and their directors, officers, managers, agents, and 
employees.
    E. ``The defendants'' means (1) Advanta; (2) AstraZenece; (3) 
Koninklijke; and (4) Syngenta.
    F. ``Fox Paine'' means Fox Paine & Company, LLC a corporation with 
headquarters in Foster City, California, its successors and assigns, 
and its subsidiaries, divisions, groups, affiliates, partnerships, 
joint ventures, and their directors, officers, managers, agents, and 
employees.
    G. ``Koninklijke'' means Koninklijke Cooperatie Cosun U.A., a co-
operative with its headquarters in Cosunpark 1, The Netherlands, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, joint ventures (including Koninklijke 
Vanderhave Groep B.V., a joint owner of Advanta), and their directors, 
officers, managers, agents, and employees.
    H. ``Syngenta'' means Syngenta AG, a company incorporated in 
Switzerland, with headquarters in Basel, Switzerland, its successors 
and assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships, joint ventures, and their directors, officers, managers, 
agents, and employees.

III. Applicability

    A. This Final Judgment applies to the defendants, as defined above, 
and all other persons in active concert or participation with any of 
them who receive actual notice of this Final Judgment by personal 
service or otherwise.
    B. The defendants shall require, as a condition of the sale or 
other disposition of all or substantially all of their assets or of 
lesser business units or assets that include Advanta's Sugar Beet Seed 
Business, that the purchaser agree to be bound by the provisions of 
this Final Judgment, provided, however, that Syngenta need not obtain 
agreement from the Acquirer(s).

IV. Divestiture

    A. Defendant Syngenta is ordered and directed, within ninety (90) 
calendar days after the date of filing of the Complaint in this matter, 
or five (5) calendar days after notice of the entry of this Final 
Judgment by the Court, whichever is later, to divest Advanta's Sugar 
Beet Seed Business in a manner consistent with this Final Judgment to 
an Acquirer acceptable to the United States in its sole discretion, 
except that as to the patents listed in Schedule A 2(b), defendant 
Syngenta will grant to the Acquirer an exclusive, royalty-free license 
for use in connection with sugar beets for the life of the patient plus 
any extensions. The United States, in its sole discretion, may agree to 
one or more extensions of this time period, not to exceed one hundred 
and twenty (120) calendar days in total, and shall notify the Court in 
each such circumstance. Defendant Syngenta agrees to use its best 
efforts to divest the Advanta Sugar

[[Page 57721]]

Beet Seed Business as expeditiously as possible.
    B. In the event that the United States objects to Fox Paine as the 
Acquirer of Advanta's Sugar Beet Seed Business, or if for any other 
reason defendant Syngenta does not divest Advanta's Sugar Beet Seed 
Business to Fox Paine, defendant Syngenta promptly shall make known, by 
usual and customary means, the availability of Advanta's Sugar Beet 
Seed Business. Defendant Syngenta shall inform any person making 
inquiry regarding a possible purchase of Advanta's Sugar Beet Seed 
Business that it is being divested pursuant to this Final Judgment and 
provide that person with a copy of this Final Judgment. Syngenta shall 
offer to furnish to each prospective Acquirer, subject to customary 
confidentiality assurances, all information and documents relating to 
Advanta's Sugar Beet Seed Business customarily provided in a due 
diligence process except such information or documents subject to the 
attorney-client or work-product privileges. Syngenta shall make 
available such information to the United States at the same time that 
such information is made available to any other person.
    C. Syngenta shall provide the Acquirer of Advanta's Sugar Beet Seed 
Business and the United States information relating to the personnel 
involved in the research, development, licensing, production, or sale 
of Advanta's sugar beet seeds anywhere in the world to enable the 
Acquirer to make offers of employment to these individuals. Syngenta 
will not interfere with any negotiations by the Acquirer to employ any 
of the defendants' employees whose responsibilities wholly or 
predominantly include the research, development, licensing, production, 
or sale of the products of Advanta's Sugar Beet Seed Business.
    D. Syngenta shall permit prospective Acquirers of Advanta's Sugar 
Beet Seed Business to have reasonable access to personnel and to make 
inspections of the physical facilities of Advanta's Sugar Beet Seed 
Business; access to any and all environmental, zoning, and other permit 
documents and information; and access to any and all financial, 
operational, or other documents and information customarily provided as 
part of a due diligence process.
    E. Syngenta shall warrant to the Acquirer of Advanta's Sugar Beet 
Seed Business that each asset will be operational on the date of 
divestiture.
    F. The defendants shall not take any action that will impede in any 
way the operation or divestiture of Advanta's Sugar Beet Seed Business.
    G. Syngenta shall warrant to the Acquirer of Advanta's Sugar Beet 
Seed Business that there are no material defects in the environmental, 
zoning, or other permits pertaining to the operation of Advanta's Sugar 
Beet Seed Business, and that following the sale of Advanta's Sugar Beet 
Seed Business, the defendants will not undertake, directly or 
indirectly, any challenges to the environmental, zoning, or other 
permits relating to the operation of Advanta's Sugar Beet Seed 
Business.
    H. Unless the United States otherwise consents in writing, the 
divestiture pursuant to section IV, or by trustee appointed pursuant to 
section V, of this Final Judgment, shall include all of Advanta's Sugar 
Beet Seed Business, and shall be accomplished in such a way as to 
satisfy the United States, in its sole discretion, that Advanta's Sugar 
Beet Seed Business can and will be used by the Acquirer as part of a 
viable, ongoing business, engaged in researching, developing, 
licensing, producing and selling sugar beet seeds in the United States. 
Divestiture of Advanta's Sugar Beet Seed Business may be made to one or 
more Acquirers, provided that it is demonstrated to the sole 
satisfaction of the United States that the divested Sugar Beet Seed 
Business will remain viable and that divestiture of that business will 
remedy the competitive harm alleged in the Complaint. The divestiture, 
whether pursuant to section IV or section V of this Final Judgment:
    1. Shall be made to an Acquirer or Acquirers that, in the United 
State's sole judgment, has the managerial intent and capability 
(including the necessary operational, technical and financial 
capability) to compete effectively in the research, development, 
licensing, production, and sale of sugar beet seeds in the United 
States; and
    2. Shall be accomplished so as to satisfy the United States, in its 
sole discretion, that none of the terms of any agreement between an 
Acquirer or Acquirers and the defendants give the defendants the 
ability unreasonably to raise the Acquirer's costs, to lower the 
Acquirer's efficiency, or otherwise to interfere in the ability of the 
Acquirer to compete effectively.

V. Appointment of Trustee

    A. If defendant Syngenta has not divested Advanta's Sugar Beet Seed 
Business within the time period specified in section IV(A), Syngenta 
shall notify the United States of that fact in writing. Upon 
application of the United States, which shall first have consulted with 
the European Commission, the Court shall appoint a trustee selected by 
the United States, and approved by the Court to effect the divestiture 
of Advanta's Sugar Beet Seed Business.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell Advanta's Sugar Beet Seed 
Business. The trustee shall have the power and authority to accomplish 
the divestiture to an Acquirer acceptable to the United States in its 
sole discretion at such price and on such terms as are then obtainable 
upon reasonable effort by the trustee, subject to the provisions of 
section IV, V, and VI of this Final Judgment, and shall have such other 
powers as this Court deems appropriate. Subject to section V(D) of this 
Final Judgment, the trustee may hire at the cost and expense of 
defendant Syngenta any investment bankers, attorneys, or other agents, 
who shall be solely accountable to the trustee, reasonably necessary in 
the trustee's judgment to assist in the divestiture.
    C. The defendants shall not object to a sale of Advanta's Sugar 
Beet Seed Business by the trustee on any ground other than the 
trustee's malfeasance. Any such objections by the 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 VI.
    D. The trustee shall serve at the cost and expense of Syngenta, on 
such terms and conditions as the United States approves, and shall 
account for all monies derived from the sale of Advanta's Sugar Beet 
Seed Business and for 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 Syngenta and the trust shall 
then be terminated. The compensation of the trustee and any 
professionals and agents retained by the trustee shall be reasonable in 
light of the value of Advanta's Sugar Beet Seed Business 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, but timeliness is paramount.
    E. Defendants shall use their best efforts to assist the trustee in 
accomplishing the required divestiture. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to the

[[Page 57722]]

personnel, books, records, and facilities of Advanta's Sugar Beet Seed 
Business, and the defendants shall develop financial and other 
information relevant to such business as the trustee may reasonably 
request, subject to reasonable protection for trade secret or other 
confidential research, development, or commercial information. The 
defendants shall take no action to interfere with or to impede the 
trustee's accomplishment of the divestiture.
    F. After its appointment, the trustee shall file monthly reports 
with the United States and the Court setting forth the trustee's 
efforts to accomplish the divestiture ordered under this Final 
Judgment. 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 Advanta's Sugar Beet Seed 
Business and shall describe in detail each contact with any such 
person. The trustee shall maintain full records of all efforts made to 
divest Advanta's Sugar Beet Seed Business.
    G. If the trustee has not accomplished such divestiture within six 
months after its appointment, the trustee shall promptly file with the 
Court a report setting forth (1) The trustee's efforts to accomplish 
the required divestiture; (2) the reasons, in the trustee's judgment, 
why the required divestiture has not been accomplished; and (3) the 
trustee's recommendations. 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 United States who shall have the 
right to make additional recommendations consistent with the purpose of 
the trust. The Court thereafter shall enter such orders as it shall 
deem appropriate to carry out the purpose of the Final Judgment, which 
may, if necessary, include, without limitation, extending the trust and 
the term of the trustee's appointment by a period requested by the 
United States.

VI. Notice of Proposed Divestiture

    A. Within two (2) business days following execution of a definitive 
divestiture agreement, defendant Syngenta or the trustee, whichever is 
then responsible for effecting the divestiture required herein, shall 
notify the United States of any proposed divestiture required by 
section IV or V of this Final Judgment. If the trustee is responsible, 
it shall similarly notify Syngenta. The notice shall set forth the 
details of the proposed divestiture and list the name, address, and 
telephone number of each person not previously identified who offered 
or expressed an interest in or desire to acquire any ownership interest 
in Advanta's Sugar Beet Seed Business, together with full details of 
the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such notice, the United States may request from the 
defendants, the proposed Acquirer, any other third party, or the 
trustee if applicable, additional information concerning the proposed 
divestiture, the proposed Acquirer and any other potential Acquirer. 
The defendants and the trustee shall furnish any additional information 
requested within fifteen (15) calendar days of the receipt of the 
request, unless the parties shall otherwise agree.
    C. 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 Acquirer, any third party, and the trustee, whichever is 
later, the United States shall provide written notice to defendant 
Syngenta and the trustee, if there is one, stating whether or not it 
objects to the proposed divestiture. If the United States provides 
written notice that it does not object, the divestiture may be 
consummated, subject only to defendants' limited right to object to the 
sale under section V(C) of this Final Judgment. Absent written notice 
that the United States does not object to the proposed Acquirer or upon 
objection by the United States, a divestiture proposed under section IV 
or section V shall not be consummated. Upon objection by the defendants 
under section V(C), a divestiture proposed under section V shall not be 
consummated unless approved by the Court.

VII. Financing

    The defendants shall not finance all or any part of any purchase 
made pursuant to section IV or V of this Final Judgment.

VIII. Hold Separate

    Until the divestiture required by this Final Judgment has been 
accomplished, the defendants shall take all steps necessary to comply 
with the Hold Separate Stipulation and Order entered by this Court. The 
defendants shall take no action that would jeopardize the divestiture 
order by this Court.

IX. Affidavits

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, and every thirty (30) calendar days thereafter until 
the divestiture has been completed under section IV or V, the 
defendants shall deliver to the United States an affidavit that 
describes the fact and manner of its compliance with section IV or V of 
this Final Judgment. Each such affidavit shall include the name, 
address and telephone number of each person who, during the preceding 
thirty days, 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 Advanta's Sugar Beet 
Seed Business, 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 Syngenta has taken to solicit buyers for 
Advanta's Sugar Beet Seed Business, and to provide required information 
to any prospective Acquirer, 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 the defendants, including limitations on the information, 
shall be made within fourteen (14) calendar days of receipt of such 
affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, the defendants shall deliver to the United States an 
affidavit that describes in reasonable detail all actions the 
defendants have taken and all steps the defendants have implemented on 
an ongoing basis to comply with section VIII of this Final Judgment. 
The defendants shall deliver to the United States an affidavit 
describing any changes to the efforts and actions outlined in the 
defendants' earlier affidavits filed pursuant to this section within 
fifteen (15) calendar days after the change is implemented.
    C. Defendant Syngenta shall keep all records of all efforts made to 
preserve Advanta's Sugar Beet Seed Business and to divest Advanta's 
Sugar Beet Seed Business until one year after such divestiture has been 
completed.

X. Compliance Inspections

    A. For purposes of determining or securing compliance with this 
Final Judgment, or of determining whether the Final Judgment should be 
modified or vacated, and subject to any legally recognized privilege, 
from time to time

[[Page 57723]]

duly authorized representatives of the United States Department of 
Justice, including consultants and other persons retained by the United 
States, shall, upon written request of a duly authorized representative 
of the Assistant Attorney General in charge of the Antitrust Division, 
and on reasonable notice to the defendants, be permitted:
    1. Access during the defendants' office hours to inspect and copy, 
or at the United States' option, to require the defendants to provide 
copies of, all books, ledgers, accounts, records and documents in the 
possession, custody, or control of the defendants, relating to any 
matters contained in this Final Judgment; and
    2. To interview, either informally or on the record, the 
defendants' officers, employees, or agents, who may have their 
individual counsel present, regarding such matters. The interviews 
shall be subject to the reasonable convenience of the interviewee and 
without restraint or interference by the defendants.
    B. Upon the written request of a duly authorized representative of 
the Assistant Attorney General in charge of the Antitrust Division, the 
defendants shall submit written reports, under oath if requested, 
relating to any of the matters contained in this Final Judgment as may 
be requested.
    C. No information or documents obtained by the means provided in 
this section shall be divulged by the United States to any person other 
than an 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 the 
defendants to the United States, the defendants represent and identify 
in writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(7) of the Federal 
Rules of Civil Procedure, and the 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 the United States shall 
give the defendants ten (10) calendar days notice prior to divulging 
such material in any legal proceeding (other than a grand jury 
proceeding).

XI. No Reacquisition

    Defendants Syngenta and Advanta may not reacquire any part of 
Advanta's Sugar Beet Seed Business during the term of this Final 
Judgment.

XII. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XIII. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten years from the date of its entry.

XIV. Public Interest Determination

    Entry of this Final Judgment is in the Public interest.

Date:

Court approval subject to procedures of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16.

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United States District Judge
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[[Page 57735]]

Certificate of Service

    I hereby certify that I have caused a copy of the foregoing 
Complaint, proposed final Judgment, and Hold Separate Stipulation and 
Order to be served on counsel for defendants in this matter in the 
manner set forth below:
    By first class mail, postage prepaid:

Counsel for Defendant Syngenta AG:

    Kenneth S. Prince, Esquire, Shearman & Sterling LLP, 599 
Lexington Avenue, New York, NY 10022-6069.

Counsel for Defendants AstraZeneca plc, Koninklijke Cooperatie Cosun 
U.A., and Advanta B.V.:
    Paul W. Bartel, II, Davis Polk & Wardwell, 450 Lexington Avenue. 
New York, NY 10017.

-----------------------------------------------------------------------
Angela L. Hughes,
Member of the DC Bar, #303420, Antitrust Division, U.S. Department 
of Justice, 325 Seventh Street, NW., Suite 500 Washington, DC 20530, 
(202) 307-6410, (202) 307-2784 (Fax).

Complaint

    The United States of America, acting under direction of the 
Attorney General of the United States, brings this civil action to 
obtain equitable relief against the defendants and complains and 
alleges as follows:
    1 . On May 11, 2004, Syngenta Crop Protection AG, Syngenta AG 
(``Syngenta''), AstraZeneca Holdings B.V., AstraZeneca PLC Koninklijke 
Vanderhave Groep B.V., and Koninklijke Cooperatie Cosun U.A. entered 
into an agreement under which Syngenta would purchase all the assets of 
Advanta B.V. (``Advanta''), a seed company jointly owned by AstraZeneca 
Holdings B.V. and Koninklijke Vanderhave Groep, V.B. The United States 
seeks to enjoin this transaction because it would significantly 
increase Syngenta's share of the highly concentrated market for sugar 
beet seeds in the United States, substantially lessening competition in 
that market.
    2. Syngenta and Advanta are two of only three companies that 
develop virtually all of the sugar beet seeds sold in the United 
States. With Advanta eliminated as an independent competitor, 
competition for the development of new, improved varieties of sugar 
beets seeds will be reduced and anticompetitive coordination between 
the remaining two significant sugar beet seed companies will become 
more likely.
    3. If Syngenta acquires Advanta, fewer new or improved varieties of 
sugar beet seeds are likely to be developed, or will be developed more 
slowly, and prices of sugar beet seeds are likely to increase. As a 
result, purchasers of sugar beet seeds and ultimate consumers of sugar 
beets will be harmed. The proposed acquisition therefore violates 
section 7 of the Clayton Act, as amended, 15 U.S.C. 18.

I. Jurisdiction and Venue

    4. This Complaint is filed and this action is instituted under 
section 15 of the Clayton Act, 15 U.S.C. 25, in order to prevent and 
restrain the defendants from violating section 7 of the Clayton Act, 15 
U.S.C. 18.
    5. Defendants are engaged in the development, production, and sale 
of agricultural seeds, including sugar beet seeds, in the flow of 
interstate commerce. The defendants' activities in the development, 
production, and sale of agricultural seeds, including sugar beet seeds, 
substantially affect interstate commerce. The Court has subject matter 
jurisdiction over this action. 28 U.S.C. 1331, 1337(a) and 1345.
    6. The defendants have consented to personal jurisdiction and venue 
in this judicial district.

II. The Defendants

    7. Syngenta is a corporation organized and existing under the laws 
of Switzerland, with its principal offices in Basel, Switzerland. 
Through its subsidiary, Syngenta Crop Protection AG, Syngenta is 
engaged in the manufacture and sale of agriculture-related products, 
including crop protection products and seeds. Syngenta is the third 
largest agricultural seed company in the world, with global seed sales 
of $1 billion in 2003. In 2003, Syngenta's sales of sugar beet seeds in 
the United States, which are marketed under the Hilleshog brand, were 
approximately $10 million.
    8. Advanta is a company incorporated in The Netherlands with its 
headquarters in Kapelle, The Netherlands. Advanta is the fifth-largest 
agricultural seed company in the world. Advanta sells its sugar beet 
seeds in the United States through its business unit Interstate Seeds. 
Advanta-bred sugar beet seeds are also marketed in the United States 
through collaborations with Holly Hybrids, Seedex, and Croplan. In 
2003, Advanta, directly and through these collaborations, had sugar 
beet seed sales of about $7 million in the United States.
    9. AstraZeneca PLC is a private limited company with its 
headquarters in London, England. AstraZeneca PLC is the ultimate parent 
entity of AstraZeneca Holdings B.V., which holds 50% of the shares of 
Advanta.
    10. Koninklijke Cooperatie Cosun U.A. is a co-operative with its 
headquarters in Cosunpark 1, the Netherlands. Koninklijke Cooperatie 
Cosun U.A. is the ultimate parent entity of Koninklijke Vanderhave 
Groep B.V., which holds 50% of the shares of Advanta.

III. Trade and Commerce

    11. Sugar beet seeds are used by growers to produce sugar beets, 
which in turn are sold to sugar beet processors, who convert them into 
sugar for human consumption. Sugar beet growers in the United States 
purchased $50 million worth of sugar beet seeds in 2003.
    12. Sugar beets are grown under many different climatic and 
environmental conditions throughout the United States. These different 
growing regions require sugar beet varieties with different 
characteristics. A sugar beet seed company identifies desirable traits 
for each region and breeds those traits into new varieties.
    13. Advanta and Syngenta each have invested extensively in sugar 
beet seed research and breeding programs over a number of decades. 
Syngenta has breeding facilities in Longmont, Colorado and in Western 
Europe. Advanta also has several breeding facilities, all in Europe. 
Both develop sugar beet varieties specifically for the unique growing 
conditions found in various regions of the United States. For example, 
a sugar beet seed variety that is suitable for cultivation in France is 
not likely, without further breeding, to be suitable or attractive to 
growers in Minnesota or Idaho. The seed companies have not been equally 
successful in developing seeds for the various growing regions of the 
United States, and they compete to improve their sales in each region 
by further development.
    14. Developing marketable sugar beet seeds can take five to ten 
years. During this development period, the seed developer will conduct 
field trials in the region where the beet is intended to be grown. The 
results of these field trials are used to determine which new varieties 
will be submitted to sugar beet processors for coded registration 
trials.
    15. Each sugar beet processor in the United States annually 
conducts trials to select varieties of sugar beet seeds to recommend to 
the growers in the processor's growing region. These trials take two to 
four years to complete. Sugar beet growers typically will only select 
for purchase seed varieties that have been tested and approved by the 
sugar processors to which they intend to market their crops.
    16. Sugar beet seed companies that have processor-approved 
varieties compete for sales to growers based upon

[[Page 57736]]

price and characteristics desired by growers--for example, traits that 
lower production costs, offer higher yield per acre or provide 
resistance to diseases and pests prevalent in the growers' geographic 
region.

IV. The Relevant Markets

    17. A small but significant increase in the price of sugar beet 
seeds would not cause growers of sugar beets in the United States to 
shift to other crops and use sufficiently fewer sugar beet seeds so as 
to make such a price increase unprofitable. Accordingly, sugar beet 
seeds suitable for growing in the United States is a line of commerce 
and a relevant product market within the meaning of Section 7 of the 
Clayton Act. The United states is a relevant geographic market within 
the meaning of Section 7 of the Clayton Act.

V. Anticompetitive Effects

    18. The market for sugar beet seeds suitable for growing in the 
United States is highly concentrated. Only three major companies--
Syngenta, Advanta, and one other--breed sugar beet seeds for 
cultivation in the United States.
    19. Syngenta-developed sugar beet seeds account for nearly 20% of 
all the sugar beet seeds sold in the United States.
    20. Advanta-developed sugar beet seeds account for more than 16% of 
the sugar beet seeds sold in the United States.
    21. Purchasers of sugar beet seeds have benefited from competition 
between Syngenta and Advanta through lower prices and improved 
products.
    22. The sugar beet seed market in the United States will become 
substantially more concentrated if Syngenta acquires Advanta. The 
number of significant sugar beet seed developers will be reduced from 
three to two. Using a measure of market concentration called the 
Herfindahl-Hirschman Index (``HHI'') (defined and explained in appendix 
A), the proposed transaction will increase the HHI in sugar beet seeds 
by more than 600 points to a post-acquisition level of over 5000.
    23. The proposed transaction will substantially lessen competition 
for the research and development of sugar beet seeds suitable for 
cultivation in the United States. With only two major companies 
competing to develop new and better seeds, less innovation is likely.
    24. The proposed transaction would make it more likely that the two 
remaining major seed companies will engage in anticompetitive 
coordination to increase prices or reduce production.

VI. Entry

    25. Successful entry would not be timely, likely, or sufficient to 
thwart these anticompetitive effects.
    26. Developing a new sugar beet seed variety takes five to ten 
years. Completing the trial tests required by sugar beet processing 
companies can take two to three additional years.

VII. Violation Alleged

    27. The effect of Syngenta's proposed acquisition of Advanta may be 
to lessen competition substantially and tend to create a monopoly in 
interstate trade and commerce in violation of Section 7 of the Clayton 
Act.
    28. Unless restrainted, the transaction likely will have the 
following effects, among others:
    a. Competition generally in sugar beet seeds suitable for growing 
in the United States will be substantially lessened;
    b. Actual competition between Syngenta and Advanta will be 
eliminated;
    c. Innovation in development of sugar beet seeds will be reduced; 
and
    d. Prices for sugar beet seeds will increase.
    29. Unless prevented, the acquisition of Advanta by Syngenta would 
violate section 7 of the Clayton Act, as amended, 15 U.S.C. 18.

VIII. Requested Relief

    Wherefore, Plaintiff requests:
    1. That the proposed acquisition by Syngenta of Advanta be adjudged 
and decreed to be unlawful and to violate section 7 of the Clayton Act, 
as amended, 15 U.S.C. 18;
    2. That defendants and all persons acting on their behalf be 
permanently enjoined from and restrained from carrying out the 
agreement dated May 11, 2004, or from entering into or carrying out any 
contract, agreement, understanding, or plan, the effect of which would 
be to combine the businesses or assets of Syngenta and Advanta;
    3. That plaintiff be awarded its costs of this action; and
    4. That plaintiff have such other relief as the Court may deem just 
and proper.

    Dated: August 25, 2004.

Respectfully submitted,

R. Hewitt Pate (DC Bar 473598)
Assistant Attorney General.

J. Bruce McDonald
Deputy Assistant Attorney General.

Dorothy B. Fountain
Deputy Director of Operations and Civil Enforcement.

Roger W. Fones (DC Bar 303255)
Chief, Transportation, Energy & Agriculture Section.

Donna N. Kooperstein
Assistant Chief, Transportation, Energy & Agriculture Section.

Angela L. Hughes (DC Bar 303420)

Jill Ptacek

J. David McDowell
Trial Attorneys, United States Department of Justice, Antitrust 
Division, Transportation, Energy & Agriculture Section, 325 7th 
Street, NW., Suite 500, Washington, DC 20530 Telephone: (202) 307-
6410, Facsimile: (202) 307-2784.

Appendix A--Definition of HHI

    The term ``HHI'' means the Herfindahl-Hirschman Index, a commonly 
accepted measure of market concentration. The HHI is calculated by 
squaring the market share of each firm competing in the market and then 
summing the resulting numbers. For example, for a market consisting of 
four firms with shares of 30, 30, 20, and 20 percent, the HHI is 2,600 
(30 \2\ + 30 \2\ + 20 \2\ + 20 \2\ = 2,600). The HHI takes into account 
the relative size and distribution of the firms in a market. It 
approaches zero when a market is occupied by a large number of firms of 
relatively equal size and reaches its maximum 10,000 when a market is 
controlled by a single firm. The HHI increases both as the number of 
firms in the market decreases and as the disparity in size between 
those firms increases.
    Markets in which the HHI is between 1000 and 1800 are considered to 
be moderately concentrated, and markets in which the HHI is in excess 
of 1800 points are considered to be highly concentrated. Transactions 
that increase the HHI by more than 100 points in highly concentrated 
markets presumptively raise significant antitrust concerns under the 
Department of Justice and Federal Trade Commission 1992 Horizontal 
Merger Guidelines.
[FR Doc. 04-21548 Filed 9-24-04; 8:45 am]
BILLING CODE 4410-11-M