[Federal Register Volume 70, Number 113 (Tuesday, June 14, 2005)]
[Notices]
[Pages 34481-34483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-11746]


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FEDERAL TRADE COMMISSION

[File No. 051 0009]


Occidental Chemical Company and Vulcan Materials Company; 
Analysis of Agreement Containing Consent Order To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of Federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint 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 2, 2005.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Occidental Chemical Company, et al., File 
No. 051 0009,'' to facilitate the organization of comments. A comment 
filed in paper form should include this reference both in the text and 
on the envelope, and should be mailed or delivered to the

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following address: Federal Trade Commission/Office of the Secretary, 
Room 159-H, 600 Pennsylvania Avenue, NW., Washington, DC 20580. 
Comments containing confidential material must be filed in paper form, 
must be clearly labeled ``Confidential,'' and must comply with 
Commission Rule 4.9(c). 16 CFR 4.9(c) (2005).\1\ The FTC is requesting 
that any comment filed in paper form be sent by courier or overnight 
service, if possible, because U.S. postal mail in the Washington area 
and at the Commission is subject to delay due to heightened security 
precautions. Comments that do not contain any nonpublic information may 
instead be filed in electronic form as part of or as an attachment to 
e-mail messages directed to the following e-mail box: 
[email protected].
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    \1\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See Commission Rule 4.9(c), 
16 CFR 4.9(c).
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    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at http://www.ftc.gov. As a matter of discretion, the FTC 
makes every effort to remove home contact information for individuals 
from the public comments it receives before placing those comments on 
the FTC Web site. More information, including routine uses permitted by 
the Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: John Warden, Room NJ-6129, (202) 326-
2147, or Susan Huber, Room NJ-6115, (202) 326-3331, 600 Pennsylvania 
Avenue, NW., Washington, DC 20580.

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 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 June 3, 2005), on the World Wide Web, at http://www.ftc.gov/os/2005/06/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. All comments should be filed as 
prescribed in the ADDRESSES section above, and must be received on or 
before the date specified in the DATES section.

Analysis of Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission (``FTC'' or ``Commission'') has 
accepted, subject to final approval, an Agreement Containing Consent 
Orders (``Consent Agreement'') from Occidental Chemical Company 
(``OxyChem'') and Vulcan Materials Company (``Vulcan'') (collectively 
``Respondents''). The Consent Agreement is intended to resolve 
anticompetitive effects stemming from OxyChem's proposed acquisition of 
the chemical assets of Vulcan. The Consent Agreement includes a 
proposed Decision and Order (``Order'') which requires Respondents to 
divest Vulcan's facility in Port Edwards, Wisconsin and assets relating 
to the research, development, marketing, sales, and production of 
chemicals produced at the facility including chlorine, caustic soda 
(sodium hydroxide), KOH (potassium hydroxide), APC (anhydrous potassium 
carbonate), and hydrochloric acid (``Port Edwards business''). The 
Order calls for divestiture of the Port Edwards business to ERCO 
Worldwide (``ERCO'') or, in the event the Commission requires recision 
of such acquisition, another approved buyer. The Consent Agreement also 
includes an Order to Maintain Assets, which requires Respondents to 
preserve the Port Edwards business as a viable, competitive, and 
ongoing operation until the divestiture is achieved.
    The Consent Agreement, if finally accepted by the Commission, would 
settle charges that OxyChem's proposed acquisition of Vulcan's chemical 
assets may have substantially lessened competition in the markets for 
KOH, potassium carbonate, and APC. The Commission has reason to believe 
that OxyChem's proposed acquisition of Vulcan's Port Edwards business 
would have violated Section 7 of the Clayton Act and Section 5 of the 
Federal Trade Commission Act.

II. The Proposed Complaint

    According to the Commission's proposed complaint, the relevant 
product markets in which to analyze the effects of OxyChem's proposed 
acquisition of Vulcan's chemical assets are the production and sale of 
KOH, potassium carbonate, and APC. KOH is the raw material for the 
production of many potassium chemicals, such as potassium permanganate, 
citrate, acetate, cyanide, benzoate, iodide, and sorbate. The largest 
end use of KOH is the production of potassium carbonate, commonly known 
as potash. End uses for potassium carbonate include nutrition 
supplements for dairy cattle, video glass for television and computer 
monitors, other specialty glass, potassium silicates, fertilizers, gas 
processing, industrial intermediaries, photographic development 
processes, detergents; and food products. Potassium carbonate can be 
produced in liquid or flake (solid) form. Over 90% of total potcarb 
production in the United States is of the flake form, known as APC. For 
most APC customers, liquid potassium carbonate is not an economically 
viable substitute.
    The proposed complaint alleges that the markets for KOH, potcarb, 
and APC are highly concentrated and that OxyChem and Vulcan have been 
the primary competitors in these markets for many years and are the 
only producers of APC in the U.S. As the proposed Complaint describes, 
customers have relied on the competition between these companies to 
maintain competitive pricing levels. The proposed complaint alleges 
that OxyChem's proposed acquisition of Vulcan's chemical assets would 
reduce competition by eliminating direct competition between these two 
companies. The proposed complaint further alleges that entry into the 
relevant markets would not be timely, likely, or sufficient to deter or 
offset the acquisition's adverse competitive effects.

III. Terms of the Proposed Order

    The proposed Order also requires that, within 10 days of OxyChem's 
acquisition of Vulcan's chemical assets, OxyChem divest the Port 
Edwards business to ERCO Worldwide (USA) Inc., an indirect subsidiary 
of Superior Plus, Inc., a Canadian company. The Port Edwards business 
will become part of ERCO Worldwide, a division of Superior Plus whose 
parent, Superior Plus Income Fund, is a Canadian income fund. Superior 
Plus, Inc. has

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four divisions: Superior Propane; ERCO Worldwide; Winroc; and Superior 
Energy Management. The market value of the fund is Cdn $2.5 billion. 
ERCO's total revenues in 2004 were Cdn $396 million.
    The assets to be divested under the proposed Order include Port 
Edwards's manufacturing facilities, related transportation assets 
(including railcars and terminal contracts), raw material supply 
agreements, and customer contracts. Port Edwards is Vulcan's only 
manufacturing facility that has the capacity to produce KOH and APC. 
The divested assets are sufficient to allow ERCO to effectively 
continue the production and marketing of KOH, APC, HCl, caustic soda, 
and chlorine at Port Edwards in amounts, and under terms, equivalent to 
the historical production and sale of these chemicals from the 
facility.
    The Order further provides that if, at the time the Commission 
makes this Order final, the Commission notifies Respondents that ERCO 
is not an acceptable acquirer of the Port Edwards business or that the 
manner in which the divestiture was accomplished is not acceptable, 
then, the divestiture to ERCO shall be rescinded and within a six-month 
period, OxyChem shall divest the Port Edwards business to an acquirer 
acceptable to the Commission. If, following this six month period, the 
Port Edwards Assets have not been divested, then the Commission may 
appoint a Divestiture Trustee to divest the assets in a manner 
acceptable to the Commission.
    The proposed Order to Maintain Assets that is also included in the 
Consent Agreement requires that Respondents maintain the Port Edwards 
business as a viable and competitive operation until the business is 
transferred to ERCO or another Commission-approved acquirer. 
Furthermore, the order contains measures designed to ensure that no 
material confidential information is exchanged between Respondents and 
the Port Edwards business (except as otherwise provided in the Order to 
Maintain Assets) and measures designed to prevent interim harm to 
competition in the relevant markets pending divestiture.
    The proposed Order also provides for the Commission to appoint a 
Monitor Trustee to oversee OxyChem's compliance with the terms of the 
order, and in the Order to Maintain Assets, the Commission appoints 
Richard M. Klein as Monitor Trustee. Mr. Klein has a Ph.D in Inorganic 
Chemistry and was the President and CEO of Sybron Chemicals from 1979 
to 2001. He serves on the boards of a number of companies and has been 
appointed by the Commission as Monitor Trustee or Hold Separate Trustee 
in other FTC matters.
    Within thirty (30) days after the date this Order becomes final, 
and every sixty (60) days thereafter until Respondents have fully 
divested the Port Edwards business, Respondents are required to submit 
a verified written report describing how they are complying, have 
complied, and intend to comply with the terms of the Order. Further, 
within thirty (30) days after the date this Order is issued, and 
annually for ten (10) years on the anniversary of the date this Order 
is issued, Respondent OxyChem must submit a verified written report to 
the Commission describing how it is complying, has complied, and 
intends to comply with the terms of the Order. Finally, within thirty 
(30) days after the date this Order is issued and annually for two (2) 
years on the anniversary of the date this Order is issued, Respondent 
Vulcan shall submit to the Commission a verified written report 
describing how it has complied, is complying, and will comply with this 
Order; however, if either Paragraph II.B or Paragraph V of the Order 
come into effect, Respondent Vulcan shall submit annual reports for 
five (5) years on the anniversary of the date this Order is issued.

IV. Opportunity for Public Comment

    The proposed Order has been placed on the public record for thirty 
(30) days to receive comments by interested persons. Comments received 
during this period will become part of the public record. After thirty 
(30) days, the Commission will review the Consent Agreement and 
comments received and decide whether to withdraw its agreement or make 
final the Consent Agreement's proposed Order and Order to 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 Maintain Assets, or in any way to modify the terms of the 
Consent Agreement, the proposed Order, or the Order to Maintain Assets.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 05-11746 Filed 6-13-05; 8:45 am]
BILLING CODE 6750-01-P