[Federal Register Volume 73, Number 53 (Tuesday, March 18, 2008)]
[Notices]
[Pages 14489-14499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-5129]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Cookson Group PLC, et. al.; Proposed Final 
Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment and 
Competitive Impact Statement have been filed with the United States 
District Court for the District of Columbia in United States v. Cookson 
Group plc, et. al., Civil Action No. 1:08-cv-00389. On March 4, 2008, 
the United States filed a Complaint to obtain equitable and other 
relief against defendants Cookson Group plc and Cookson America Inc. 
(``Cookson''), and Foseco plc and Foseco Metallurgical Inc. 
(``Foseco'') to prevent Cookson's proposed acquisition of Foseco. The 
Complaint alleges that Cookson's acquisition of Foseco's United States 
carbon-bonded ceramic refractory (``CBC'') business would substantially 
lessen competition in the United States in the development, 
manufacture, and sale of certain CBCs, in violation of section 7 of the 
Clayton Act, as amended, 15 U.S.C. 18. The proposed Final Judgment, 
filed on March 4, 2008, requires defendants to divest Foseco's entire 
United States CBC business, including its plant in Saybrook, Ohio and 
related assets.
    Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 325 7th Street, 
NW., Room 215, Washington, DC 20530 (telephone: 202-514-2481), on the 
Department of Justice's Web site at http://www.usdoj.gov/atr, and at 
the Office of the Clerk of the United States District Court for the 
District of Columbia, Washington, DC. Copies of these materials may be 
obtained from the Antitrust Division upon request and payment of a 
copying fee set by Department of Justice regulations.
    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

[[Page 14490]]

and filed with the Court. Comments should be directed to Maribeth 
Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. 
Department of Justice, 1401 H Street, NW., Suite 3000, Washington, DC 
20530 (telephone: 202-307-0924).

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

United States District Court for the District of Columbia

United States of America, Department of Justice, Antitrust Division, 
1401 H Street, NW., Suite 3000, Washington, DC 20530, Plaintiff, v. 
Cookson Group, PLC, 165 Fleet Street, London EC4A 2AE, England; Cookson 
America, Inc., I Cookson Place, Providence, RI 02903-3248; FOSECO PLC, 
Coleshill Road, Fazeley, Tamworth, Staffordshire B78 3TL, England; and 
FOSECO Metallurgical Inc., 20200 Sheldon Road, Cleveland, OH 44142, 
Defendants; Civil Action No. 1:08-cv-00389; Judge: Urbina, Ricardo M.; 
Deck Type: Antitrust; Date Stamp: March 4, 2008

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil antitrust 
action to enjoin the proposed acquisition by Cookson Group plc of 
Foseco plc and to obtain equitable and other relief. The United States 
complains and alleges as follows:

I. Nature of the Action

    1. On October 11, 2007, Cookson and Foseco announced that they had 
reached agreement on the terms of a recommended cash offer by Cookson 
for the entire issued and to-be-issued share capital of Foseco in a 
transaction valued at approximately $1 billion.
    2. Cookson and Foseco both manufacture and sell isostatically 
pressed carbon bonded ceramics products (``CBCs''), which are used to 
control the flow and enhance the quality of steel produced in the 
continuous casting steelmaking process. Cookson's proposed acquisition 
of Foseco would combine two of only three North American manufacturers 
of certain CBCs.
    3. The United States brings this action to enjoin Cookson's 
proposed acquisition of Foseco because it would substantially lessen 
competition in the markets for certain CBCs in violation of section 7 
of the Clayton Act, 15 U.S.C. 18.

II. Parties to the Proposed Acquisition

    4. Cookson Group plc (``Cookson''), a United Kingdom corporation 
with its headquarters in London, England, is a manufacturer and 
processor of ceramics, electronics, and precious metals. Cookson's 
total 2006 worldwide revenues were approximately $3.3 billion, and its 
total 2006 U.S. revenues were about $356 million. Cookson America Inc., 
a wholly-owned subsidiary of Cookson Group plc, is a Delaware 
corporation with its headquarters in Providence, Rhode Island. Cookson, 
through its subsidiaries, manufactures CBCs in the United States and 
Mexico and distributes them throughout the United States. In 2006, 
Cookson's U.S. CBC revenues were about $75 million.
    5. Foseco plc, a United Kingdom corporation with its headquarters 
in Staffordshire, England, manufactures refractories and related 
products for sale, and offers services worldwide to the steel and 
foundry industries. Its total 2006 worldwide revenues were 
approximately $817 million, and its total 2006 U.S. revenues were about 
$110 million. Foseco Metallurgical Inc., a wholly-owned subsidiary of 
Foseco plc, is a Delaware corporation with its headquarters in 
Cleveland, Ohio (together with Foseco plc, ``Foseco''). Foseco 
manufactures CBCs in the United States and distributes them throughout 
the United States. In 2006, Foseco's U.S. CBC revenues were about $4 
million.

III. Jurisdiction and Venue

    6. The United States brings this action under section 15 of the 
Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain the 
Defendants from violating section 7 of the Clayton Act, 15 U.S.C. 18.
    7. Defendants manufacture and sell CBCs in the flow of interstate 
commerce. Defendants' activities in manufacturing and selling these 
products substantially affect interstate commerce. This Court has 
subject matter jurisdiction over this action pursuant to section 12 of 
the Clayton Act, 15 U.S.C. 22, and 28 U.S.C. 1331, 1337(a), and 1345.
    8. Defendants have consented to venue and personal jurisdiction in 
this judicial district and venue is proper under 28 U.S.C. 1391(d).

IV. Trade and Commerce

A. CBCs Generally

    9. Refractories are non-metallic ceramics that serve as a heat 
buffer or lining in industrial devices because they withstand extremely 
high temperatures. In the steelmaking process, refractory products 
serve as barriers between hot molten steel and the non-consumable 
equipment such as the furnaces, ladles, and tundishes. A ladle is a 
large container that receives molten steel from a furnace; a tundish is 
a receptacle that receives steel from the ladle and to controls the 
flow of steel into molds during the continuous casting process.
    10. CBCs are consumable, isostatically pressed refractory products 
that control the flow of molten steel from the ladle to the tundish and 
onto the continuous casting mold during the continuous casting process. 
CBCs are consumed through exposure to molten steel and must be replaced 
frequently.
    11. Isostatic pressing is a process used in the manufacture of CBCs 
to increase the refractory materials' density and homogeneity, 
resulting in a CBC with increased thermal shock resistance and 
resistivity to chemical attack. Carbon-bonded alumina graphite is the 
main refractory material used to make CBCs.
    12. The ``design'' of a CBC refers to both its shape and the 
alumina graphite recipe. Each customer uses different designs tailored 
to the equipment it uses in the casting process. Customers with 
multiple plants require custom-designed CBCs for each plant and may 
require multiple custom-designed CBCs within each plant. Designs depend 
on variables such as the customer's cast strand size and shape, casting 
speed, and the steel grades produced. Customers change CBC recipes and/
or shapes in order to improve steel quality, meet new steel 
specifications, or save on CBC costs.
    13. CBCs undergo rigorous testing by the manufacturer and the 
customer to ensure reliable performance and value under actual casting 
conditions. Because CBCs are critical to the steelmaking process, most 
customers have a policy of splitting sales between at least two 
suppliers to ensure supply.

B. The Relevant Product Markets

1. Ladle Shrouds
    14. Ladle shrouds are CBCs that prevent molten steel from re-
oxidizing and ensure the steel transfers safely from the ladle to the 
tundish.
    15. There are no good substitutes for ladle shrouds. A small but 
significant post-acquisition increase in the price of ladle shrouds 
would not cause customers to substitute another product or otherwise 
reduce their usage of ladle shrouds in sufficient quantities so as to 
make such a price increase unprofitable.
    16. The manufacture and sale of ladle shrouds is a line of commerce 
and a relevant product market within the meaning of section 7 of the 
Clayton Act.
2. Stopper Rods
    17. Stopper rods are CBCs used to control the flow of steel out of 
the

[[Page 14491]]

tundish and are one of two types of devices, the other being slide gate 
systems, that can perform this function. Customers use only one device 
or the other in a given tundish. The choice of device depends on the 
design of the tundish. Once the choice of tundish design has been made, 
a customer cannot switch from a stopper rod to a slide gate system 
without also replacing or substantially reconfiguring the tundish-
significantly disrupting their operations.
    18. Because of high switching costs, a small but significant post-
acquisition increase in the price of stopper rods would not cause 
customers to switch to slide gate systems or otherwise reduce their 
usage of stopper rods in sufficient quantities so as to make such a 
price increase unprofitable.
    19. The manufacture and sale of stopper rods is a line of commerce 
and a relevant product market within the meaning of section 7 of the 
Clayton Act.

C. The Relevant Geographic Markets

    20. Cookson and Foseco manufacture ladle shrouds and stopper rods 
at facilities in North America for sale in the United States.
    21. Virtually all ladle shrouds and stopper rods purchased by 
customers in the United States are produced in plants located in North 
America. Although a few manufacturers outside of North America make 
ladle shrouds and stopper rods, firms with production facilities in 
North America have a significant advantage over these foreign 
manufacturers in delivered cost and/or in competing for customers that 
value shorter lead times in their supply chain.
    22. A small but significant post-acquisition increase in the price 
of ladle shrouds and stopper rods would not cause customers in North 
America to switch to purchases from manufacturers outside of North 
America in sufficient numbers so as to make such a price increase 
unprofitable.
    23. Accordingly, within the meaning of section 7 of the Clayton 
Act, the relevant geographic market for ladle shrouds and stopper rods 
is North America.

D. Anticompetitive Effects: The Proposed Transaction Will Harm 
Competition in the Markets for Ladle Shrouds and Stopper Rods

    24. The production of ladle shrouds and stopper rods involves 
similar materials and manufacturing processes. In general, 
manufacturers that are successful in selling ladle shrouds to U.S. 
customers are also successful in selling stopper rods to U.S. 
customers, and vice versa.
    25. Cookson and Foseco are two of only three firms that manufacture 
and sell the vast majority of ladle shrouds and stopper rods to U.S. 
customers. Cookson and Foseco have competed with one another on price, 
service, and innovation in the markets for stopper rods and ladle 
shrouds. The markets for ladle shrouds and stopper rods would become 
substantially more concentrated if Cookson acquires Foseco. Cookson and 
Foseco would have a combined share of approximately 75 percent. Using a 
measure of market concentration called the Herfindahl-Hirschman Index 
(``HHI'') (defined and explained in Appendix A), the proposed 
transaction would increase the HHI in both markets by approximately 700 
points to a post-transaction level in excess of 6000.
    26. Customers request bids from ladle shroud and stopper rod 
suppliers and consider price, quality, service, and innovation in 
selecting the winning bidder. The proposed acquisition will eliminate 
Foseco as an independent bidder.
    27. This reduction in the number of active bidders from three to 
two will reduce competition and likely will result in higher prices 
and/or reductions in service and innovation for a significant number of 
customers in the markets for ladle shrouds and stopper rods. The likely 
anticompetitive effect is heightened due to customers' preferences to 
maintain supply relationships with two independent suppliers 
simultaneously. In light of such preferences, the proposed acquisition 
will eliminate competition to be a customer's second supplier.
    28. Foreign manufacturers likely will not have the incentive or 
ability to defeat an anticompetitive increase in price or reduction in 
service or innovation because of their high delivered costs, customers' 
preferences for North American suppliers, and/or the poor quality and 
reputation of their products.
    29. The proposed acquisition will substantially lessen competition 
in the manufacture and sale of ladle shrouds and stopper rods in the 
United States in violation of section 7 of the Clayton Act.

E. Entry: New Entrants Will Not Defeat an Exercise of Market Power

    30. Successful entry into the ladle shroud and stopper rod markets 
would not be timely, likely, or sufficient to deter the anticompetitive 
effects resulting from this transaction. Timely entry sufficient to 
replace the market impact of Foseco would be difficult for several 
reasons. A new entrant would need to acquire manufacturing facilities 
in North America and capital equipment; assemble or develop 
manufacturing, technical expertise, and personnel; conduct extensive 
customer trials; and establish a reputation for quality and reliability 
among U.S. customers. An entrant undertaking these steps would be 
unable to enter in less than two years.
    31. There are foreign firms with a share of the U.S. market for 
more complex CBCs, known as subentry nozzles and subentry shrouds. 
Because of the expertise and reputation they have developed in these 
markets, theoretically they would be capable of entering the domestic 
market for ladle shrouds and stopper rods. None of these firms, 
however, are likely to open U.S. manufacturing facilities within the 
next several years.

V. Violation Alleged

    32. The proposed acquisition of Foseco by Cookson would 
substantially lessen competition in interstate trade and commerce in 
violation of section 7 of the Clayton Act, 15 U.S.C. 18.
    33. Unless restrained, the acquisition will have the following 
anticompetitive effects, among others:
    a. Competition in the markets for the manufacture and sale of ladle 
shroud and stopper rods in the United States will be lessened 
substantially;
    b. Actual and potential competition between Cookson and Foseco in 
the manufacture and sale of ladle shrouds and stopper rods in the 
United States will be eliminated; and
    c. Prices for ladle shrouds and stopper rods in the United States 
likely will increase, and/or service and innovation likely will 
decline.

VI. Request for Relief

    34. Plaintiff requests that:
    a. Cookson's proposed acquisition of Foseco be adjudged and decreed 
to be unlawful and in violation of section 7 of the Clayton Act, 15 
U.S.C. 18;
    b. Defendants and all persons acting on their behalf be permanently 
enjoined and restrained from consummating the proposed acquisition or 
from entering into or carrying out any contract, agreement, plan, or 
understanding, the effect of which would be to combine Cookson with the 
operations of Foseco;
    c. Plaintiff be awarded its costs for this action; and
    d. Plaintiff receive such other and further relief as the Court 
deems just and proper.

    Respectfully submitted,

    For Plaintiff United States of America:

/s/
Thomas O. Barnett,


[[Page 14492]]


Assistant Attorney General
DC Bar 426840.

/s/
Maribeth Petrizzi,

Chief, Litigation II Section
D.C. Bar 435204.

/s/
David L. Meyer,

Deputy Assistant Attorney General
DC Bar 414420.

/s/
J. Robert Kramer II,

Director of Operations and
Civil Enforcement

/s/
Dorothy B. Fountain,

Assistant Chief, Litigation II Section
DC Bar 439469

/s/
Leslie Peritz,
Helena Gardner,

Attorneys, United States Department of Justice, Antitrust Division, 
Litigation II Section 1401 H Street, NW., Suite 3000, Washington, DC 
20530 (202) 307-0924.

Dated: March 4, 2008.

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 of 
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 points 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.

United States District Court for the District of Columbia

United States of America, Plaintiff, v. Cookson Group PLC, Cookson 
America Inc., FOSECO PLC, and FOSECO Metallurgical Inc., Defendants; 
Case No.: 1:08-cv-00389, Judge: Urbina, Ricardo M. Deck Type: 
Antitrust; Date Stamp: March 4, 2008

Final Judgment

    Whereas, Plaintiff, United States of America, filed its Complaint 
on March 4, 2008, the United States and defendants, Cookson Group plc 
and Cookson America Inc. and Foseco plc and Foseco Metallurgical Inc., 
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, defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by the defendants to 
assure that competition is not substantially lessened;
    And whereas, the United States requires defendants to make a 
certain divestiture for the purpose of remedying the loss of 
competition alleged in the Complaint;
    And whereas, defendants have represented to the United States that 
the divestiture required below can and will be made and that defendants 
will later raise no claim of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture provisions contained 
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 defendants under section 7 of the Clayton 
Act, as amended (15 U.S.C. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``Cookson'' means defendant Cookson Group plc, a United Kingdom 
corporation with its headquarters in London, England, and Cookson 
America Inc., a Delaware Corporation with its headquarters in 
Providence, Rhode Island and includes its successors and assigns, and 
its subsidiaries, divisions, groups, affiliates, partnerships and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    B. ``Foseco'' means defendant Foseco plc, a United Kingdom 
corporation with its headquarters in Tamworth, Staffordshire, England, 
and Foseco Metallurgical Inc., a Delaware corporation with its 
headquarters in Cleveland, Ohio and includes its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.
    C. ``CBCs'' means consumable, isostatically pressed refractory 
products made of carbon-bonded alumina graphite that control the flow 
of molten steel from the steel ladle to the continuous casting mold 
during the continuous casting of steel.
    D. ``Divestiture Business'' means Foseco's entire business engaged 
in the development, design, production, servicing, distribution, and 
sale of CBCs in the United States, including:
    1. Foseco's Saybrook, Ohio facility, and the related leasehold;
    2. all tangible assets used in the development, design, production, 
servicing, distribution, and sale of CBCs in the United States, 
including but not limited to all research data and activities and 
development activities; all manufacturing equipment, including but not 
limited to batch mix equipment, presses, drying and oven/kilning, 
finishing, packaging, and tooling; all fixed assets, real property 
(leased or owned), personal property, inventory, office furniture, 
materials, supplies, on-or off-site warehouses or storage facilities 
relating to the factory and property, and all other tangible property; 
all licenses, permits and authorizations issued by any governmental 
organization; all contracts, teaming arrangements, agreements, leases 
(including renewal rights), commitments, certifications, and 
understandings, including supply agreements; all customer lists, 
contracts, accounts, and credit records or similar records of all sales 
and potential sales; all sales support and promotional materials, 
advertising materials, and production, sales and marketing files; all 
repair and performance records; all other records; and, at the option 
of the Acquirer, Foseco's U.S. water-modeling assets;
    3. all intangible assets used in the development, design, 
production, servicing, distribution, and sale of CBCs in the United 
States, including, but not limited to, all patents, all pending patent 
applications, licenses and sublicenses, intellectual property, 
copyrights, trademarks (registered and unregistered), trade names, 
service marks, and service names relating to the Divestiture Business, 
but excluding the corporate-level name and device and trademark of 
Foseco; all technical information, computer software and related 
documentation, know-how, trade secrets, drawings, blueprints, designs, 
design protocols, specifications for materials, specifications for 
parts

[[Page 14493]]

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 
provided to employees, customers, suppliers, agents or licensees, and 
all research data concerning historic and current research and 
development efforts relating to the Divestiture Business, including, 
but not limited to, designs of CBCs, and the results of successful and 
unsuccessful designs and trials; and
    4. notwithstanding anything to the contrary in this Final Judgment, 
if requested by an Acquirer, and subject to the approval of the United 
States in its sole discretion, defendants shall offer to enter into a 
transition services agreement for a limited period with respect to 
certain support services (e.g., HR, IT, and/or health and safety).
    E. ``Bonnybridge Business'' means Foseco's European CBC business 
and its facilities in Bonnybridge, Stirlingshire, Scotland, which the 
European Commission has required to be divested along with the 
Divestiture Business.
    F. ``Acquirer'' means the entity to which defendants divest the 
Divestiture Business.

III. Applicability

    A. This Final Judgment applies to Cookson and Foseco, 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. If, prior to complying with section IV and V of this Final 
Judgment, defendants sell or otherwise dispose of all or substantially 
all of their assets or of lesser business units that include the 
Divestiture Business, they shall require the purchaser to be bound by 
the provisions of this Final Judgment. Defendants need not obtain such 
an agreement from the Acquirer of the assets divested pursuant to this 
Final Judgment.

IV. Divestiture

    A. Defendants are ordered and directed, within ninety (90) calendar 
days after the 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 the Divestiture Business in a 
manner consistent with this Final Judgment to an Acquirer acceptable to 
the United States, in its sole discretion after consultation with the 
European Commission. The United States, in its sole discretion, may 
agree to one or more extensions of this time period not to exceed 60 
calendar days in total, and shall notify the Court in such 
circumstances. Defendants agree to use their best efforts to divest the 
Divestiture Business as expeditiously as possible.
    B. In accomplishing the divestiture ordered by this Final Judgment, 
defendants promptly shall make known, by usual and customary means, the 
availability of the Divestiture Business. Defendants shall inform any 
person making inquiry regarding a possible purchase of the Divestiture 
Business that it is being divested pursuant to this Final Judgment and 
provide that person with a copy of this Final Judgment. Defendants 
shall offer to furnish to all prospective Acquirers, subject to 
customary confidentiality assurances, all information and documents 
relating to the Divestiture Business customarily provided in a due 
diligence process except such information or documents subject to the 
attorney-client privileges or work-product doctrine. Defendants shall 
make available such information to the United States at the same time 
that such information is made available to any other person.
    C. Defendants shall provide the Acquirer and the United States 
information relating to the personnel involved in the production, 
operation, research and development, design, and sale of CBCs to enable 
the Acquirer to make offers of employment. Defendants shall not 
interfere with any negotiations by the Acquirer to employ or contract 
with any defendant employee responsible for any such activity related 
to the Divestiture Business.
    D. Defendants shall permit prospective Acquirers of the Divestiture 
Business to have reasonable access to personnel responsible for the 
Divestiture Business; to make inspections of the physical facilities of 
the Divestiture Business; to have access to any and all environmental, 
zoning, and other permit documents and information; and to have access 
to any and all financial, operational, or other documents and 
information customarily provided as part of a due diligence process.
    E. Defendants shall warrant to the Acquirer that the Divestiture 
Business will be operational on the date of sale.
    F. Defendants shall not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Business.
    G. Defendants shall warrant to the Acquirer that there are no 
material defects in the environmental, zoning or other permits 
pertaining to the operation of the Divestiture Business, and that 
following the sale of the Divestiture Business, defendants will not 
undertake, directly or indirectly, any challenges to the environmental, 
zoning, or other permits relating to the operation of the Divestiture 
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 the entire Divestiture 
Business, and shall be accomplished in such a way as to satisfy the 
United States, in its sole discretion, that the Divestiture Business 
can and will be used by the Acquirer as part of a viable, ongoing 
business for the manufacture and sale of CBCs in the United States. The 
divestiture, whether pursuant to section IV or section V of this Final 
Judgment,
    1. shall be made to the acquirer of the Bonnybridge Business;
    2. shall be made to an Acquirer that, in the United States's sole 
judgment, has the intent and capability (including the necessary 
managerial, operational, technical and financial capability) of 
competing effectively in the manufacture and sale of CBCs in the United 
States; and
    3. 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 and defendants give 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 in the manufacture and sale of CBCs in the United States.

V. Appointment of Trustee

    A. If defendants have not divested the Divestiture Business within 
the time period specified in section IV(A), defendants shall notify the 
United States of that fact in writing. Upon application of the United 
States, the Court shall appoint a trustee selected by the United 
States, in consultation with the European Commission to ensure 
selection of a trustee acceptable to both the United States and the 
European Commission, and approved by the Court to effect the 
divestiture of the Divestiture Business.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Divestiture Business. The 
trustee shall have the power and authority to accomplish the 
divestiture to an Acquirer acceptable to the United States at such 
price and on such terms as are then obtainable upon reasonable effort 
by the trustee, subject to the provisions of sections IV, V, and

[[Page 14494]]

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 defendants 
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. Defendants shall not object to a sale by the trustee on any 
ground other than the trustee's malfeasance or that the Acquirer has 
not been approved by the European Commission. Any objection by 
defendants on the ground of trustee malfeasance 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; any objection by defendants based on lack of approval from the 
European Commission must be conveyed in writing to the United States 
and the trustee within the later of (i) five (5) days after the United 
States provides defendants with written notice, pursuant to section 
VI(C), stating that it does not object to the proposed divestiture of 
the Divestiture Business or (ii) two (2) business days after the 
European Commission notifies defendants that it does not approve of the 
proposed Acquirer. D. The trustee shall serve at the cost and expense 
of defendants, on such terms and conditions as the United States 
approves, and shall account for all monies derived from the sale of the 
assets sold by the trustee and all costs and expenses so incurred. 
After approval by the Court of the trustee's accounting, including fees 
for its services and those of any professionals and agents retained by 
the trustee, all remaining money shall be paid to defendants and the 
trust shall then be terminated. The compensation of the trustee and any 
professionals and agents retained by the trustee shall be reasonable in 
light of the value of the Divestiture 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 personnel, books, 
records, and facilities of the business to be divested, and 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. 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 the Divestiture Business, and 
shall describe in detail each contact with any such person. The trustee 
shall maintain full records of all efforts made to divest the 
Divestiture Business.
    G. If the trustee has not accomplished the divestiture ordered 
under this Final Judgment 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 which 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 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, defendants 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 defendants. 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 
the Divestiture 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 defendants, 
the proposed Acquirer(s), any other third party, or the trustee, if 
applicable, additional information concerning the proposed divestiture, 
the proposed Acquirer(s), and any other potential Acquirer. 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 defendants, the 
proposed Acquirer(s), any third party, and the trustee, whichever is 
later, the United States shall provide written notice to defendants and 
the trustee, if there is one, stating whether or not it objects to the 
proposed divestiture. If 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 defendants under section V(C), a 
divestiture proposed under section V shall not be consummated unless 
approved by the Court.

VII. Financing

    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, defendants shall take all steps necessary to comply with 
the Hold Separate Stipulation and Order entered by this Court. 
Defendants shall take no action that would jeopardize the divestiture 
ordered 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

[[Page 14495]]

been completed under section IV or V, defendants shall deliver to the 
United States an affidavit as to 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 (30) calendar 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 the Divestiture 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 defendants have taken 
to solicit buyers for the Divestiture Business, and to provide required 
information to prospective Acquirers, including the limitations, if 
any, on such information. Assuming the information set forth in the 
affidavit is true and complete, any objection by the United States to 
information provided by defendants, including limitations on 
information, shall be made within fourteen (14) calendar days of 
receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, defendants shall deliver to the United States an 
affidavit that describes in reasonable detail all actions defendants 
have taken and all steps defendants have implemented on an ongoing 
basis to comply with section VIII of this Final Judgment. Defendants 
shall deliver to the United States an affidavit describing any changes 
to the efforts and actions outlined in defendants' earlier affidavits 
filed pursuant to this section within fifteen (15) calendar days after 
the change is implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Business until one year after such 
divestiture has been completed.

X. Compliance Inspection

    A. For the 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 authorized representatives of the United States 
Department of Justice, including consultants and other persons retained 
by the United States, shall, upon written request of an authorized 
representative of the Assistant Attorney General in charge of the 
Antitrust Division, and on reasonable notice to defendants, be 
permitted:
    1. Access during defendants' office hours to inspect and copy, or 
at the option of the United States, to require defendants to provide 
hard copy or electronic copies of, all books, ledgers, accounts, 
records, data, and documents in the possession, custody, or control of 
defendants, relating to any matters contained in this Final Judgment; 
and
    2. to interview, either informally or on the record, 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 defendants.
    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit written reports or responses to written 
interrogatories, 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 
defendants to the United States, 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 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 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 may not reacquire any part of the Divestiture 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. The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16, including making copies available to the 
public of this Final Judgment, the Competitive Impact Statement, and 
any comments thereon and the United States's responses to comments. 
Based upon the record before the Court, which includes the Competitive 
Impact Statement and any comments and response to comments filed with 
the Court, entry of this Final Judgment is in the public interest.

Date:

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

United States District Judge.

The United States District Court for the District of Columbia

United States of America, Plaintiff, v. Cookson Group PLC, Cookson 
America Inc., FOSECO PLC, and FOSECO Metallurgical Inc., Defendants; 
Case No.: 1:08-cv-00389; Judge: Urbina, Ricardo M.; Deck Type: 
Antitrust; Date Stamp: March 4, 2008.

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.

I. Nature and Purpose of the Proceeding

    Defendant Cookson Group plc and Defendant Foseco plc have entered 
into an agreement whereby Cookson will acquire Foseco. The United 
States filed a civil antitrust Complaint on March, 2008 seeking to 
enjoin the proposed acquisition. The Complaint alleges that the likely 
effect of this acquisition would be to lessen competition substantially 
in the markets for certain isostatically pressed carbon bonded ceramics 
products (``CBCs''), in violation of section 7 of the Clayton Act, 15 
U.S.C. 18. This loss of competition likely would result in increased 
prices and/or a reduction in service and

[[Page 14496]]

innovation in the manufacture and sale of such CBCs in the United 
States.
    At the same time the Complaint was filed, the United States also 
filed a Hold Separate Stipulation and Order (``Hold Separate'') and 
proposed Final Judgment, which are designed to eliminate the 
anticompetitive effects of the acquisition. Under the proposed Final 
Judgment, which is explained more fully below, defendants are required 
to divest Foseco's business engaged in the development, design, 
production, servicing, distribution, and sale of CBCs in the United 
States, including the CBC plant in Saybrook, Ohio and related assets 
(hereafter the ``Divestiture Business''). Under the terms of the Hold 
Separate, defendants will take certain steps to ensure that the 
Divestiture Business is operated as a competitively independent, 
economically viable, and ongoing business concern; that it will remain 
independent and uninfluenced by the consummation of the acquisition; 
and that competition in the market for CBCs 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. The Defendants and the Proposed Transaction

    Cookson, a United Kingdom corporation with its headquarters in 
London, England, is a manufacturer and processor of ceramics, 
electronics, and precious metals. Cookson, through its subsidiary, 
Cookson America Inc., manufactures CBCs in the United States and Mexico 
and sells them throughout the United States. In 2006, Cookson's U.S. 
CBC revenues were about $75 million.
    Foseco, a United Kingdom corporation with its headquarters in 
Staffordshire, England, manufactures refractories and related products 
for sale and offers services worldwide to the steel and foundry 
industries. Foseco, through its subsidiary, Foseco Metallurgical Inc., 
manufactures CBCs in the United States and sells them throughout the 
United States. In 2006, Foseco's U.S. CBC revenues were about $4 
million.
    On October 11, 2007, Cookson and Foseco announced that they had 
reached an agreement on the terms of a recommended cash offer by 
Cookson for the entire issued and to-be-issued share capital of Foseco 
in a transaction valued at approximately $1 billion.

B. The Competitive Effects of the Transaction

1. CBCs Generally
    Refractories are non-metallic ceramics that serve as a heat buffer 
or lining in industrial devices because they withstand extremely high 
temperatures. In the steelmaking process, refractory products serve as 
barriers between hot molten steel and the non-consumable equipment such 
as the furnaces, ladles (large containers that receive molten steel 
from a furnace), and tundishes (receptacles that receive steel from the 
ladle).
    CBCs are consumable, isostatically pressed refractory products that 
control the flow of molten steel from the ladle to the tundish and onto 
the continuous casting mold during the continuous casting process. 
Isostatic pressing is a process used in the manufacture of CBCs to 
increase the refractory materials' density and homogeneity, resulting 
in a CBC with increased thermal shock resistance and resistivity to 
chemical attack. Carbon-bonded alumina graphite is the main refractory 
material used to make CBCs. CBCs are consumed through exposure to 
molten steel and must be replaced frequently.
    The ``design'' of a CBC refers to both its shape and the alumina 
graphite recipe. Each customer uses different designs tailored to the 
equipment it uses in the casting process. Customers with multiple 
plants require custom-designed CBCs for each plant and may require 
multiple custom-designed CBCs within each plant. Designs depend on 
variables such as the customer's cast strand size and shape, casting 
speed, and the steel grades produced. Customers change CBC recipes and/
or shapes in order to improve steel quality, meet new steel 
specifications, or save on CBC costs.
    CBCs undergo rigorous testing by the manufacturer and the customer 
to ensure reliable performance and value under actual casting 
conditions. Because CBCs are critical to the steelmaking process, most 
customers have a policy of splitting sales between at least two 
suppliers to ensure supply.
2. Relevant Product Markets
Ladle Shrouds
    The Complaint alleges that the manufacture and sale of ladle 
shrouds is a line of commerce and a relevant product market within the 
meaning of section 7 of the Clayton Act. Ladle shrouds are CBCs that 
prevent molten steel from re-oxidizing and ensure the steel transfers 
safely from the ladle to the tundish.
    There are no good substitutes for ladle shrouds. The Complaint 
alleges that a small but significant post-acquisition increase in the 
price of ladle shrouds would not cause customers to substitute another 
product or otherwise reduce their usage of ladle shrouds in sufficient 
quantities so as to make such a price increase unprofitable. 
Accordingly, the manufacture and sale of ladle shrouds is a relevant 
product market.

Stopper Rods

    The Complaint alleges that the manufacture and sale of stopper rods 
is a line of commerce and a relevant product market within the meaning 
of section 7 of the Clayton Act. Stopper rods are CBCs used to control 
the flow of steel out of the tundish and are one of two types of 
devices, the other being slide gate systems, that can perform this 
function. The choice of device depends on the design of the tundish. 
Once the choice of tundish design has been made, a customer cannot 
switch from a stopper rod to a slide gate system without also replacing 
or substantially reconfiguring the tundish-significantly disrupting 
their operations.
    The Complaint alleges that, because of high switching costs, a 
small but significant post-acquisition increase in the price of stopper 
rods would not cause customers to switch to slide gate systems or 
otherwise reduce their usage of stopper rods in sufficient quantities 
so as to make such a price increase unprofitable. Accordingly, the 
manufacture and sales of stopper rods is a relevant product market.
3. Relevant Geographic Market
    Cookson and Foseco manufacture ladle shrouds and stopper rods at 
facilities in North America for sale in the United States. The 
Complaint alleges that virtually all ladle shrouds and stopper rods 
purchased by customers in the United States are produced in plants 
located in North America. Although a few manufacturers outside of North 
America make ladle shrouds and stopper rods, firms with production 
facilities in North America have a significant advantage over these 
foreign manufacturers in delivered cost and/or in competing for 
customers that value shorter lead times in their supply chain.
    The Complaint alleges that a small but significant post-acquisition 
increase in the price of ladle shrouds and stopper

[[Page 14497]]

rods would not cause customers in North America to switch to purchases 
from manufacturers outside of North America in sufficient numbers so as 
to make such a price increase unprofitable. Accordingly, the relevant 
geographic market for ladle shrouds and stopper rods is North America.
4. Anticompetitive Effects
    Cookson and Foseco are two of only three firms that manufacture and 
sell the vast majority of ladle shrouds and stopper rods to U.S. 
customers. Cookson and Foseco have competed with one another on price, 
service, and innovation in the markets for stopper rods and ladle 
shrouds. The markets for ladle shrouds and stopper rods would become 
substantially more concentrated if Cookson acquires Foseco. For 
example, Cookson and Foseco would have a combined share of 
approximately 75 percent. 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 both 
markets by approximately 700 points to a post-transaction level in 
excess of 6000.
    Customers request bids from ladle shroud and stopper rod suppliers 
and consider price, quality, service, and innovation when selecting the 
winning bidder. The proposed acquisition will eliminate Foseco as an 
independent bidder. This reduction in the number of active bidders from 
three to two will reduce competition and likely will result in higher 
prices and/or reductions in service and innovation for a significant 
number of customers in the markets for ladle shrouds and stopper rods. 
The likely anticompetitive effects are heightened due to customers' 
preferences to maintain supply relationships with two independent 
suppliers simultaneously. In light of such preferences, the proposed 
acquisition will eliminate competition to be a customer's second 
supplier.
    Moreover, manufacturers outside of North America likely will not 
have the incentive or ability to defeat an anticompetitive increase in 
price or reduction in service or innovation because of their high 
delivered costs, customers' preferences for North American suppliers, 
and/or the poor quality and reputation of their products.
    Further, successful entry into the ladle shroud and stopper rod 
markets would not be timely, likely, or sufficient to deter the 
anticompetitive effects resulting from this transaction. Timely entry 
sufficient to replace the market impact of Foseco would be difficult 
for several reasons. A new entrant would need to acquire capital 
equipment and manufacturing facilities in North America; assemble or 
develop manufacturing, technical, and personnel expertise; conduct 
extensive customer trials; and establish a reputation for quality and 
reliability among U.S. customers. An entrant undertaking these steps 
would need to undertake these steps would be unable to enter in less 
than two years.
    There are foreign firms with a share of the U.S. market for more 
complex CBCs. Because of the expertise and reputation they have 
developed in these markets, theoretically they are capable of entering 
the domestic market for ladle shrouds and stopper rods. None of these 
firms, however, is likely to open North American manufacturing 
facilities within the next several years.
    As a result of these barriers to entry into the North American 
market for ladle shrouds and stopper rods, entry by any other firm into 
the manufacture and sale of ladle shrouds and stopper rods will not be 
timely, likely, or sufficient to deter the anticompetitive effects 
resulting from this transaction.

III. Explanation of the Proposed Final Judgment

    The divestiture requirement of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in the markets 
for ladle shrouds and stopper rods by establishing a new, independent, 
and economically viable competitor. The proposed Final Judgment 
requires defendants, within 90 days after the filing of the Complaint, 
or five days after notice of the entry of the Final Judgment by the 
Court, whichever is later, to divest, as a viable ongoing business, the 
Divestiture Business, which includes Foseco's CBC plant in Saybrook, 
Ohio and related tangible and intangible assets.\1\ The assets must be 
divested in such a way as to satisfy the United States, in its sole 
discretion, that the Divestiture Business can and will be operated by 
the purchaser as a viable, ongoing business capable of competing 
effectively in the relevant markets. Defendants must take all 
reasonable steps necessary to accomplish the divestiture quickly and 
shall cooperate with prospective purchasers.
---------------------------------------------------------------------------

    \1\ The parties agreed to remedy the adverse effects in the 
markets for ladle shrouds and stopper rods by divesting the entire 
U.S. CBC business, including the Saybrook facility where Foseco 
manufactures all of the CBCs it sells in the United States. The 
proposed remedy would enable the purchaser to offer the ``full 
line'' of CBCs currently being sold by Foseco--including, for 
instance, subentry nozzles and subentry shrouds--which would ensure 
that the purchaser would have the incentive and all the assets 
necessary to be an effective, long-term competitor in these 
products.
---------------------------------------------------------------------------

    In the event that defendants do not accomplish the divestiture 
within the period 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 defendants 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, in order to carry out the purpose of the trust, 
including extending the trust or the term of the trustee's appointment.

Selected Provisions of the Proposed Final Judgment

    Section IV(H) of the proposed Final Judgment requires defendants to 
sell the Divestiture Business--Foseco's CBC business in the United 
States--to the acquirer of Foseco's European CBC business, which 
includes assets in Bonnybridge, Stirlingshire, Scotland (the 
``Bonnybridge Business''). This requirement is warranted because the 
European Commission is requiring defendants to divest the Bonnybridge 
Business, and because of the practical difficulties of splitting 
between two acquirers rights to certain intellectual property and know-
how used by both businesses.
    Because the United States and the European Commission both must 
approve the same acquirer, section IV(A) of the proposed Final Judgment 
provides that the United States will consult with the European 
Commission in exercising its review of defendants' sale of the 
Divestiture Business in a manner consistent with the proposed Final 
Judgment, to an acquirer acceptable to the United States in its sole 
discretion. As noted above, if the defendants do not divest the 
Divestiture Business within the required time period, the Court, upon 
application of the United States, is to appoint a trustee to complete 
the divestiture. Because the European Commission also requires 
selection of a trustee if the divestiture is not completed within a 
certain time,

[[Page 14498]]

section V(A) of the proposed Final Judgment provides that the United 
States shall select a trustee after consultation with the European 
Commission to ensure selection of a trustee acceptable to both the 
United States and the European Commission.
    The divestiture provisions of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in the 
manufacture and sale of ladle shrouds and stopper rods 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 (60) 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 (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register, or the last date of 
publication in a newspaper of the summary of this Competitive Impact 
Statement, whichever is later. All comments received during this period 
will be considered by the United States 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: Maribeth Petrizzi, Chief, 
Litigation II Section, Antitrust Division, United States Department of 
Justice, 1401 H St. NW., Suite 3000, Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, 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 Cookson's acquisition of 
Foseco. The United States is satisfied, however, that the divestiture 
of assets described in the proposed Final Judgment will preserve 
competition for the provision of ladle shrouds and stopper rods in the 
United States. Thus, the proposed Final Judgment would achieve all or 
substantially all of the relief the United States would have obtained 
through litigation, but avoids the time, expense, and uncertainty of a 
full trial on the merits of the Complaint.

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

    The Clayton Act, as amended by 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)(l). In making that determination, 
the court, in accordance with the statute as amended in 2004, is 
required to 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). In considering these statutory factors, 
the court's inquiry is necessarily a limited one as the government is 
entitled to ``broad discretion to settle with the defendant within the 
reaches of the public interest.'' United States v. Microsoft Corp., 56 
F.3d 1448, 1461 (D.C. Cir. 1995); see generally United States v. SBC 
Commc'ns, Inc., 489 F. Supp. 2d I (D.D.C. 2007) (assessing public 
interest standard under the Tunney Act).\2\
---------------------------------------------------------------------------

    \2\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for a court to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns, 
489 F. Supp. 2d at 11 (concluding that the 2004 amendments 
``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------

    As the United States Court of Appeals for the District of Columbia 
Circuit has held, under the APPA a court considers, 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 
Microsoft, 56 F.3d at 1458-62. 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; United States v. Alcoa, Inc., 152 
F. Supp. 2d 37, 40 (D.D.C. 2001). 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).\3\ In

[[Page 14499]]

determining whether a proposed settlement is in the public interest, a 
district court ``must accord deference to the government's predictions 
about the efficacy of its remedies, and may not require that the 
remedies perfectly match the alleged violations.'' SBC Commc'ns, 489 F. 
Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461 (noting the need 
for courts to be ``deferential to the government's predictions as to 
the effect of the proposed remedies''); United States v. Archer-
Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that 
the court should grant due respect to the United States' prediction as 
to the effect of proposed remedies, its perception of the market 
structure, and its views of the nature of the case).
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    \3\ Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); United States v. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (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 in the decree are] so 
inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest' '').
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    Courts have greater flexibility in approving proposed consent 
decrees than in crafting their own decrees following a finding of 
liability in a litigated matter. ``[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. Am. Tel. & Tel. Co., 
552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United 
States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), 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). To meet this standard, the United States 
``need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 
489 F. Supp. 2d at 17.
    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. As this Court recently confirmed in SBC Communications, 
courts ``cannot look beyond the complaint in making the public interest 
determination unless the complaint is drafted so narrowly as to make a 
mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
    In its 2004 amendments, Congress made clear its intent to preserve 
the practical benefits of utilizing consent decrees in antitrust 
enforcement, adding the unambiguous instruction that ``[n]othing 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). The language wrote into the statute 
what Congress intended when it enacted the Tunney Act in 1974, as 
Senator Tunney explained: ``[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). Rather, the procedure for the public interest 
determination is left to the discretion of the court, with the 
recognition that the court's ``scope of review remains sharply 
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC 
Commc'ns, 489 F. Supp. 2d at 11.\4\
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    \4\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the 
court to make its public interest determination on the basis of the 
competitive impact statement and response to comments alone''); S. 
Rep. No. 93-298, 93d Cong., 1st Sess., at 6 (1973) (``Where the 
public interest can be meaningfully evaluated simply on the basis of 
briefs and oral arguments, that is the approach that should be 
utilized.''); United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade 
Cas. (CCH) 61,508, at 71,980 (W.D. Mo. 1977) (``Absent a showing of 
corrupt failure of the government to discharge its duty, the Court, 
in making its public interest finding, should * * * carefully 
consider the explanations of the government in the competitive 
impact statement and its responses to comments in order to determine 
whether those explanations are reasonable under the 
circumstances.'').
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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: March 4, 2008.

    Respectfully submitted,

Leslie Peritz, Helena Gardner,

Attorneys United States Department of Justice, Antitrust Division, 
Litigation II, 1401 H Street, NW., Suite 3000, Washington, DC 20530, 
(202) 307-0924.
 [FR Doc. E8-5129 Filed 3-17-08; 8:45 am]
BILLING CODE 4410-11-M