[Federal Register Volume 74, Number 160 (Thursday, August 20, 2009)]
[Notices]
[Pages 42112-42123]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19987]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Sapa Holding AB and Indalex Holdings Finance, 
Inc.; 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, 
Stipulation and Competitive Impact Statement have been filed with the 
United States District Court for the District of Columbia in United 
States of America v. Sapa Holding AB and Indalex Holdings Finance, 
Inc., Civil Action No. 09-CV-01424. On July 30, 2009, the United States 
filed a Complaint alleging that the proposed acquisition by Sapa 
Holding AB (``Sapa'') of Indalex Holdings Finance, Inc. (``Indalex'') 
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 Sapa to 
divest either Sapa's or Indalex's assets, including certain tangible 
and intangible assets, used for the manufacture and sale of coiled 
extruded aluminum tubing used in the formation of high frequency 
communications cables in the United States. If it has not divested one 
of these facilities within the period prescribed in the proposed Final 
Judgment, then a trustee will be appointed to sell Indalex's entire 
Burlington, North Carolina extruded aluminum fabrication facility.
    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, 450 Fifth 
Street, NW., Suite 1010, 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. Copies of these materials may be obtained 
from the Antitrust Division upon request and payment of the copying fee 
set by Department of Justice regulations.

[[Page 42113]]

    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 Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, 
Department of Justice, 450 Fifth Street, NW., Suite 8700, Washington, 
DC 20530, (telephone: 202-307-0924).

Patricia A. Brink,
Deputy Director of Operations and Civil Enforcement.
United States of America, Department of Justice, Antitrust Division, 
450 Fifth Street, NW., Suite 8700, Washington, DC 20530, Plaintiff 
v. Sapa Holding AB, Humlegardsgatan 17, Box 5505, SE-114 85 
Stockholm, Sweden, Indalex Holdings Finance, Inc., 75 Tri-State 
International, Suite 450, Lincolnshire, Illinois 60069, Defendants.

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 of Indalex Holdings Finance, 
Inc. (``Indalex'') by Sapa Holding AB (``Sapa'') and to obtain other 
equitable relief. The United States alleges as follows:

I. Nature of Action

    1. Pursuant to an asset purchase agreement dated June 16, 2009, 
Sapa intends to acquire directly or indirectly substantially all of the 
assets of Indalex and its affiliated companies in a transaction valued 
at about $150 million. Defendants Sapa and Indalex currently compete in 
the manufacture and sale of fabricated aluminum extruded products in 
the United States. The proposed transaction would substantially lessen 
competition for the manufacture and sale of coiled extruded aluminum 
tubing used in the formation of high frequency communications cables in 
the United States.
    2. Defendants Sapa and Indalex are the only two providers of coiled 
extruded aluminum tubing used in the formation of high frequency 
communications cables in the United States. Unless the acquisition is 
enjoined, consumers of coiled extruded aluminum tubing used in the 
formation of high frequency communications cables likely will pay 
higher prices as a consequence of the elimination of the existing 
competition between Sapa and Indalex. Accordingly, Sapa's acquisition 
of Indalex would violate Section 7 of the Clayton Act, 15 U.S.C. 18.

II. Jurisdiction and Venue

    3. This action is filed by the United States under Section 15 of 
the Clayton Act, 15 U.S.C. 25, to prevent and restrain the violation by 
defendants of Section 7 of the Clayton Act, 15 U.S.C. 18.
    4. Defendants manufacture and sell coiled aluminum tubing and other 
products in the flow of interstate commerce. Defendants' activities in 
the manufacture and sale of 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.
    5. Defendants Sapa and Indalex transact business, and have 
consented to venue and personal jurisdiction, in the District of 
Columbia. Venue is therefore proper in this judicial district under 15 
U.S.C. 22 and 28 U.S.C. 1391(c). Venue is also proper in the District 
of Columbia for Defendant Sapa, a Swedish corporation, under 28 U.S.C. 
1391(d).

III. The Parties and the Transaction

    6. Sapa is a Swedish corporation with its principal place of 
business in Stockholm, Sweden. Sapa sells fabricated aluminum products 
throughout the world, including in the United States, where it is the 
largest aluminum extruder. Among the fabricated aluminum products that 
Sapa sells in the United States is coiled extruded aluminum tubing used 
in the formation of high frequency communications cables, which Sapa 
manufactures at its plant in Catawba, North Carolina. In 2007, Sapa had 
about $38.7 million in sales of coiled extruded aluminum tubing used in 
the formation of high frequency communications cables. In 2008, its 
sales of the product were about $30.7 million. Sapa is owned by Orkla 
ASA, a Norwegian public limited company whose offices are located in 
Sk[oslash]yen, Oslo in Norway. Orkla is a large, diversified 
international company with operations throughout the world.
    7. Indalex is a Delaware corporation with its principal place of 
business in Lincolnshire, Illinois. Indalex sells fabricated aluminum 
products in Canada and the United States. Indalex is the second largest 
aluminum extruder in the United States. Among the fabricated aluminum 
products that Indalex sells in the United States is coiled extruded 
aluminum tubing used in the formation of high frequency communications 
cables, which Indalex sells from its plant in Burlington, North 
Carolina. In 2007, Indalex had about $18.3 million in sales of coiled 
extruded aluminum tubing used in the formation of high frequency 
communications cables. In 2008, its sales of the product were about $12 
million.
    8. Pursuant to a bankruptcy court-supervised bidding process, Sapa 
and Indalex entered into an Asset Purchase Agreement on June 16, 2009, 
under which Sapa agreed to acquire substantially all the assets of 
Indalex and its affiliates in the United States and Canada.

IV. Trade and Commerce

A. The Relevant Product Market

    9. Cable television companies in the United States and abroad 
purchase coaxial cables to transmit high frequency broadband signals to 
their subscribers. One of the major inputs to these cables is specially 
manufactured extruded aluminum tubing, or ``aluminum sheathing.'' 
Aluminum sheathing provides protection for the components of the cables 
to prevent the loss of the transmission signal to subscribers. To 
fulfill this function, it must be continuous, and it must not have any 
imperfections such as disruptions, pin-holes, or deformations along the 
entire length of the product. Aluminum sheathing also must be hermetic, 
forming an air-tight barrier around the circumference of the tubing to 
protect the cable against failure due to contamination from foreign 
substances. In addition, the aluminum sheathing must have a minimum 
length of 1,900 continuous feet to accommodate the needs of finished 
coaxial cable manufacturers.
    10. Aluminum sheathing also must be thin-walled, typically with a 
wall thickness in the range of 0.013 to 0.057 inches, with a tolerance 
as low as +/- 0.002 inches across the entire aluminum sheathing 
products line. Tight tolerance is required by customers to maintain 
consistent electrical performance of the cable and assures consistent 
interface of the cable with standard connectors at its termination 
points. The ratio of the sheathing outer diameter to the wall thickness 
commonly falls into the 30:1 range. These thin walls make it difficult 
to maintain material consistency during the extrusion process and 
increase the risk of manufacturing defects and damage incurred during 
shipping.
    11. Aluminum sheathing must be made from high-purity aluminum alloy 
with particular mechanical and electrical properties. It must be 
manufactured to achieve transmission of radio frequency signals up to a 
frequency of 3 Ghz at a signal loss level

[[Page 42114]]

no worse than -30 decibels. Typically, it will be made from either 
aluminum alloy 1060, with a minimum aluminum content of 99.6 percent, 
or 1100, with a minimum aluminum content of 99.0 percent. These alloys 
are flexible and pliable, which make them particularly suitable for 
cable applications but also susceptible to denting or damage during 
processing, particularly for sheathing with thin walls. Any such 
imperfections increase the electrical impedance of the finished cable 
and reduce its performance. Repeated, periodic imperfections in the 
sheathing, such as those that can result from irregularities in the 
coiling process, can reduce the cable performance and interfere with or 
block signals within a particular frequency band.
    12. Aluminum sheathing is coiled and sold to coaxial cable 
manufacturers that stretch the aluminum tubing and insert electrical 
wiring and insulation. There is no other product that customers can use 
as a reasonably cost-effective substitute for aluminum sheathing. While 
copper exhibits superior electrical properties, it is five times more 
expensive than aluminum and, as a result, is not used. Also, most 
customers do not use welded aluminum tubing as a substitute because of 
its much lower reliability in cable applications and lack of conformity 
with their installed base.
    13. A small but significant increase in the price of aluminum 
sheathing would not cause purchasers to substitute any other type of 
tubing to protect coaxial cables used to transmit high frequency 
broadband signals. Accordingly, the manufacture and sale of aluminum 
sheathing is a separate and distinct line of commerce and a relevant 
product market for the purpose of analyzing the effects of the 
acquisition under Section 7 of the Clayton Act.

B. The Relevant Geographic Market

    14. All aluminum sheathing sold in the United States is 
manufactured in the United States, and Indalex and Sapa sell aluminum 
sheathing for uses throughout the country. No aluminum sheathing is 
imported into the United States from abroad.
    15. The United States is a relevant geographic market for purposes 
of analyzing the effects of the acquisition under Section 7 of the 
Clayton Act.

C. Anticompetitive Effects

    16. If Sapa is allowed to acquire the aluminum sheathing business 
of Indalex, the number of manufacturers of aluminum sheathing will 
decrease from two to one. Thus, the transaction will result in a 
monopoly.
    17. Currently, Sapa and Indalex directly constrain each other's 
prices, limiting overall price increases for aluminum sheathing.
    18. Purchasers of aluminum sheathing in the United States have 
benefited from the competition between Sapa and Indalex through lower 
prices, higher quality, more innovation, and better service. Without 
the competitive constraint of head-to-head competition from Indalex, 
Sapa will have the ability to exercise market power by raising prices, 
lowering product quality, decreasing services, and lessening product 
innovation.
    19. The acquisition of Indalex by Sapa will remove a significant 
competitor in the market for aluminum sheathing in the United States. 
The resulting loss of competition will deny customers the benefits of 
competition, in violation of Section 7 of the Clayton Act.

D. Entry Into the Manufacture and Sale of Aluminum Sheathing

    20. A new entrant would require significant time to obtain 
necessary equipment and to qualify its product to meet the demanding 
standards described in paragraphs 9 to 11, above.
    21. A new entrant into the manufacture and sale of aluminum 
sheathing must obtain significant technical know-how in order to 
manufacture it. Extrusions of structural aluminum products are made 
from different aluminum alloys than those used to produce aluminum 
sheathing and are not typically formed into lengths of 2000 feet or 
more. Also, other types of aluminum extrusions typically are not coiled 
and require different post-extrusion processing. A new entrant would 
require significant time to develop the necessary expertise to perfect 
these processes in a high-volume production environment. Moreover, 
customers of aluminum sheathing must carefully qualify any new 
supplier, which can cost the customer over $1 million and one year of 
time. Aluminum sheathing customers--i.e., cable manufacturers--incur 
significant liability in the form of repair and replacement costs and 
diminished reputation if their products do not perform as predicted.
    22. A new entrant also must invest in significant equipment and 
tooling to successfully manufacture the product. Appropriate dies, 
coiling systems, and presses of the size commonly used to produce 
aluminum sheathing could require substantial investment, much of which 
represents sunk costs.
    23. A new entrant, to be successful, must produce aluminum 
sheathing in quantities that permit it to realize economies of scale. 
Current and projected demand for the product are not likely to be 
sufficient to attract new investment, particularly because customers 
are parties to long-term contracts, the expiration dates for which 
differ significantly. Thus, entry at sufficient scale to justify the 
cost of the required investment is unlikely.
    24. Therefore, entry into the manufacture and sale of aluminum 
sheathing would not be timely, likely, or sufficient to counter 
anticompetitive price increases that Sapa could impose after its 
acquisition of Indalex.

V. Violation Alleged

    25. The United States incorporates the allegations of paragraphs 1 
through 24 above.
    26. On or about July 31, 2009, Sapa plans to acquire Indalex and 
its assets used in the manufacture of coiled extruded aluminum tubing 
used in the formation of high frequency communications cables. The 
effect of this acquisition will be substantially to lessen competition 
in interstate trade and commerce in violation of Section 7 of the 
Clayton Act.
    27. The transaction will likely have the following effects, among 
others:
    a. Competition in the manufacture and sale of coiled extruded 
aluminum tubing used in the formation of high frequency communications 
cables in the United States will be lessened substantially;
    b. Actual and potential competition between Sapa and Indalex in the 
manufacture and sale of coiled extruded aluminum tubing used in the 
formation of high frequency communications cables in the United States 
will be eliminated; and
    c. Prices for coiled extruded aluminum tubing used in the formation 
of high frequency communications cables likely will increase and the 
levels of quality, services and innovation likely will decrease.

VI. Requested Relief

    28. The United States requests that this Court:
    a. Adjudge and decree that Sapa's proposed acquisition of Indalex 
and its assets violates Section 7 of the Clayton Act, 15 U.S.C. 18;
    b. Permanently enjoin and restrain Sapa and all persons acting on 
its behalf 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 the aluminum sheathing assets 
of Indalex and Sapa;

[[Page 42115]]

    c. Award the United States its cost for this action; and
    d. Grant the United States such other and further relief as the 
case requires and the Court deems just and proper.

    Respectfully submitted.
    July 30, 2009.
    For Plaintiff United States.

Christine A. Varney,
Assistant Attorney General.

William F. Cavanaugh, Jr.,
Deputy Assistant Attorney General.

J. Robert Kramer II,
Director of Operations.

Maribeth Petrizzi,
 Bar No. 435204, Chief, Litigation II Section.

Dorothy B. Fountain,
Bar No. 439469, Assistant Chief, Litigation II Section.

John F. Greaney,
Suzanne Morris,
Bar No. 450208.

Dando B. Cellini,
Warren A. Rosborough IV,
Bar No. 495063.

Attorneys, U.S. Department of Justice, Antitrust Division, 
Litigation II Section, Fifth Street, NW., Suite 8700, Washington, DC 
20530.

Final Judgment

    Whereas, Plaintiff, United States of America, filed its Complaint 
on July 30, 2009, the United States and defendants, Sapa Holding AB and 
Indalex Holdings Finance, 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 and assets by the defendants to 
assure that competition is not substantially lessened;
    And whereas, the United States requires defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And whereas, defendants have represented to the United States that 
the divestitures 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, 15 U.S.C. 8, as amended.

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer'' means the entity to whom defendants divest the 
Divestiture Assets or to whom the trustee divests the Alternative 
Divestiture Assets.
    B. ``Sapa'' means defendant Sapa Holding AB, a subsidiary of Orkla 
ASA, headquartered in Stockholm, Sweden, its successors and assigns, 
and its parents, subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.
    C. ``Indalex'' means defendant Indalex Holdings Finance, Inc., 
headquartered in Lincolnshire, Illinois, its successors and assigns, 
and its subsidiaries, divisions, groups, affiliates, partnerships and 
joint ventures, and their directors, officers, managers, agents, and 
employees.
    D. ``Divestiture Assets'' means:
    (1) Sapa's Catawba, North Carolina facility (``Catawba facility''), 
located at 6555 CommScope Road, Catawba, North Carolina, including: (a) 
All tangible assets comprising the Catawba facility, including, but not 
limited to, all research and development activities; all manufacturing 
equipment, tooling and fixed assets, personal property, inventory, 
office furniture, materials, supplies, and other tangible property and 
all assets used in connection with the Catawba facility; all licenses, 
permits and authorizations issued by any governmental organization 
relating to the Catawba facility; all contracts, teaming arrangements, 
agreements, leases, commitments, certifications, and understandings 
relating to the Catawba facility, including supply agreements; all 
customer lists, contracts, accounts, and credit records; all repair and 
performance records and all other records relating to the Catawba 
facility;
    (b) All intangible assets used in the development, production and 
sale of coiled extruded aluminum tubing used in the formation of high 
frequency communications cables, including, but not limited to, all 
patents, licenses and sublicenses, intellectual property, copyrights, 
trademarks, trade names, service marks, service names, technical 
information, computer software and related documentation, 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, quality 
assurance and control procedures, design tools and simulation 
capability; all manuals and technical information provided by Sapa to 
its own employees, customers, suppliers, agents or licensees; and all 
research data concerning historic and current research and development 
efforts at the Catawba facility, including, but not limited to, designs 
of experiments and the results of successful and unsuccessful designs 
and experiments; or
    (2) The portion of Indalex's assets located at any time during the 
past two years on the north side of Industry Drive (``Burlington 
aluminum sheathing facility''), at its Burlington, North Carolina 
facility, 1507 Industry Drive, Burlington, North Carolina (``Burlington 
facility''), including:
    (a) All tangible assets comprising the Burlington aluminum 
sheathing facility, including, but not limited to, all assets that have 
been used in connection with the manufacture and sale of coiled 
extruded aluminum tubing used in the formation of high frequency 
communications cables (``aluminum sheathing''); a total of two presses, 
including the 14-inch press used by Indalex primarily to produce 
aluminum sheathing along with all assets necessary to the operation of 
those two presses, including assets involved in the processing and 
handling of billets and coiling or other post-extrusion processing 
operations; all research and development activities; all manufacturing 
equipment, tooling and fixed assets, personal property, inventory, 
office furniture, materials, supplies, and other tangible property and 
all assets used in connection with the Burlington aluminum sheathing 
facility; all licenses, permits and authorizations issued by any 
governmental organization relating to the Burlington aluminum sheathing 
facility; all contracts, teaming arrangements, agreements, leases, 
commitments, certifications, and understandings relating to the 
Burlington aluminum tubing facility, including supply agreements; all 
customer lists, contracts, accounts, and credit records; all repair and 
performance records and all other records relating to the Burlington 
aluminum sheathing facility; and
    (b) All intangible assets used in the development, production and 
sale of aluminum sheathing or any other product manufactured at the 
Burlington

[[Page 42116]]

aluminum sheathing facility during the past two years, including, but 
not limited to, all patents, licenses and sublicenses, intellectual 
property, copyrights, trademarks, trade names, service marks, service 
names, technical information, computer software and related 
documentation, 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, quality assurance and control procedures, design tools and 
simulation capability; all manuals and technical information provided 
by Indalex to its own employees, customers, suppliers, agents or 
licensees; and all research data concerning historic and current 
research and development efforts at the Burlington aluminum sheathing 
facility, including, but not limited to, designs of experiments and the 
results of successful and unsuccessful designs and experiments.
    (c) Notwithstanding the foregoing, the non-press assets (including 
but not limited to repair/performance documentation, customer 
contracts, technical information and conduit and distribution tooling) 
that primarily relate to, and the employees primarily assigned to, the 
two presses and operations south of Industry Road at the Burlington 
plant are not part of the ``Burlington aluminum sheathing facility.''
    E. ``Alternative Divestiture Assets'' means Indalex's Burlington 
facility including:
    (1) All tangible assets comprising the Burlington facility, 
including, but not limited to, all research and development activities; 
all manufacturing equipment, tooling and fixed assets, personal 
property, inventory, office furniture, materials, supplies, and other 
tangible property and all assets used in connection with the Burlington 
facility; all licenses, permits and authorizations issued by any 
governmental organization relating to the Burlington facility; all 
contracts, teaming arrangements, agreements, leases, commitments, 
certifications, and understandings relating to the Burlington facility, 
including, supply agreements; all customer lists, contracts, accounts, 
and credit records; all repair and performance records and all other 
records relating to the Burlington facility;
    (2) All intangible assets used in the development, production and 
sale of extruded aluminum products, including, but not limited to, all 
patents, licenses and sublicenses, intellectual property, copyrights, 
trademarks, trade names, service marks, service names, technical 
information, computer software and related documentation, 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, quality 
assurance and control procedures, design tools and simulation 
capability; all manuals and technical information provided by Indalex 
to its own employees, customers, suppliers, agents or licensees; and 
all research data concerning historic and current research and 
development efforts relating to the Burlington facility, including, but 
not limited to, designs of experiments and the results of successful 
and unsuccessful designs and experiments.

III. Applicability

    A. This Final Judgment applies to Sapa and Indalex, as defined 
above, and all other persons in active concert or participation with 
either of them who receive actual notice of this Final Judgment by 
personal service or otherwise.
    B. If, prior to complying with Sections 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 Assets or the Alternative Divestiture Assets, 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. Divestitures

    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 Assets in a manner 
consistent with this Final Judgment to an Acquirer acceptable to the 
United States, in its sole discretion. The United States, in its sole 
discretion, may agree to one or more extensions of this time period not 
to exceed sixty (60) calendar days in total, and shall notify the Court 
in such circumstances. Defendants agree to use their best efforts to 
divest the Divestiture Assets as expeditiously as possible. If 
defendants have not divested the Divestiture Assets within the time 
periods specified in this paragraph, the Alternative Divestiture Assets 
shall be divested in accordance with Section V of this Final Judgment.
    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 Assets. Defendants shall inform any 
person making inquiry regarding a possible purchase of the Divestiture 
Assets that they are 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 Assets customarily provided in a due 
diligence process except such information or documents subject to the 
attorney-client privilege 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, development and/or sale of the Divestiture Assets, or the 
Alternative Divestiture Assets if the divestiture is made pursuant to 
Section V of this Final Judgment, to enable the Acquirer to make offers 
of employment. Defendants will not interfere with any negotiations by 
the Acquirer to employ any defendant employee whose primary 
responsibility is the production, operation, development and/or sale of 
the Divestiture Assets, or the Alternative Divestiture Assets if the 
divestiture is made pursuant to Section V of this Final Judgment. For a 
period of twelve (12) months from the date of the divestiture of the 
Divestiture Assets, defendants shall not solicit to hire, or hire, any 
such defendant employee that receives a substantially equivalent offer 
of employment from the approved Acquirer, unless such employee is 
terminated or laid off by the Acquirer, or the Acquirer agrees that 
defendants may solicit and hire that employee.
    D. Defendants shall permit prospective Acquirers of the Divestiture 
Assets, or the Alternative Divestiture Assets if the divestiture is 
made pursuant to Section V of this Final Judgment, to have reasonable 
access to personnel and to make inspections of the physical facilities 
of the Divestiture Assets, or the Alternative Divestiture Assets if the 
divestiture is made pursuant to Section V of this Final Judgment; 
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.

[[Page 42117]]

    E. Defendants shall warrant to the Acquirer that each asset 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 Assets, or 
the Alternative Divestiture Assets if the divestiture is made pursuant 
to Section V of this Final Judgment.
    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 each asset, and that following the sale 
of the Divestiture Assets or the Alternative Divestiture Assets, 
defendants will not undertake, directly or indirectly, any challenges 
to the environmental, zoning, or other permits relating to the 
operation of the Divestiture Assets or the Alternative Divestiture 
Assets.
    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 
Assets or the Alternative Divestiture Assets, and shall be accomplished 
in such a way as to satisfy the United States, in its sole discretion, 
that the Divestiture Assets or the Alternative Divestiture Assets can 
and will be used by the Acquirer as part of a viable, ongoing business 
in the production and sale of coiled extruded aluminum tubing used in 
the formation of high frequency communications cables. The 
divestitures, whether pursuant to Section IV or Section V of this Final 
Judgment,
    (1) 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 business of coiled extruded aluminum 
tubing used in the formation of high frequency communications cables; 
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 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.

V. Appointment of Trustee

    A. If defendants have not divested the Divestiture Assets 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 
and approved by the Court to effect the sale of the Alternative 
Divestiture Assets.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Alternative Divestiture 
Assets. 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 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. Any such objections by 
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 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 Alternative Divestiture Assets 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 Alternative Divestiture 
Assets, and shall describe in detail each contact with any such person. 
The trustee shall maintain full records of all efforts made to divest 
the Alternative Divestiture Assets.
    G. If the trustee has not accomplished the divestiture ordered 
under this Final Judgment within six (6) 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

[[Page 42118]]

person not previously identified who offered or expressed an interest 
in or desire to acquire any ownership interest in the Divestiture 
Assets or the Alternative Divestiture Assets, 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, any other third party, or the trustee, if 
applicable, additional information concerning the proposed divestiture, 
the proposed Acquirer, 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, 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 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 Assets or the 
Alternative Divestiture Assets if the divestiture is made pursuant to 
Section V of this Final Judgment, 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 Assets or the Alternative 
Divestiture Assets, 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 limitation 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 Assets or the Alternative 
Divestiture Assets 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 Antitrust Division, 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 response 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)(1)(G) 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)(1)(G) 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 Assets or 
the Alternative Divestiture Assets during the term of this Final 
Judgment.

[[Page 42119]]

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 (10) 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. Sec.  16.

----------/s/----------
United States District Judge.

United States District Court for The District of Columbia

    United States of America, Plaintiff, v. Sapa Holding Ab, And 
Indalex Holdings Finance, Inc., Defendants.

Case No.:
Judge:
Deck Type: Antitrust.
Date Stamp: July 30, 2009.

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 Sapa Holding AB (``Sapa'') and Indalex Holdings Finance, 
Inc. (``Indalex'') entered into an Asset Purchase Agreement dated June 
16, 2009, pursuant to which Sapa would acquire Indalex in a sale under 
Chapter 11 of the Bankruptcy Code. The United States filed a civil 
antitrust Complaint on July 30, 2009, seeking to enjoin the proposed 
acquisition, alleging that it would substantially lessen competition 
for the manufacture and sale of coiled extruded aluminum tubing used in 
the formation of high frequency communications cables in the United 
States in violation of Section 7 of the Clayton Act, 15 U.S.C. 18. This 
loss of competition would likely result in consumers paying higher 
prices, lowering product quality, decreasing services, and reducing 
product innovation for coiled extruded aluminum tubing used in the 
formation of high frequency communications cables.
    With the filing of the Complaint in this case, the United States 
also filed a Hold Separate Stipulation and Order and proposed Final 
Judgment, which are designed to eliminate the anticompetitive effects 
of the proposed acquisition. Under the proposed Final Judgment, 
explained more fully below, defendants are required promptly to divest 
either Sapa's or Indalex's assets used for the manufacture and sale of 
coiled extruded aluminum tubing used in the formation of high frequency 
communications cables in the United States. If they have not divested 
one of these facilities within the period prescribed in the proposed 
Final Judgment, then a trustee will be appointed to sell Indalex's 
entire Burlington, North Carolina extruded aluminum fabrication 
facility. Under the terms of the Hold Separate Stipulation and Order, 
Sapa is required to take certain steps to ensure that the assets 
eligible to be divested will be operated as a competitively 
independent, economically viable and ongoing business concern, that 
will remain 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 the 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 Parties to the Proposed Transaction

    Sapa is a Swedish corporation with its principal place of business 
in Stockholm, Sweden. Sapa sells fabricated aluminum products 
throughout the world, including in the United States, where it is the 
largest aluminum extruder. Among the fabricated aluminum products that 
Sapa sells in the United States is coiled extruded aluminum tubing used 
in the formation of high frequency communications cables, which Sapa 
manufactures at its plant in Catawba, North Carolina. Sapa is owned by 
Orkla ASA, a Norwegian public limited company whose offices are located 
in Sk[rho]yen, Oslo in Norway. Orkla is a large, diversified 
international company with operations throughout the world.
    Indalex is a Delaware corporation with its principal place of 
business in Lincolnshire, Illinois. Indalex sells fabricated aluminum 
products in Canada and the United States. Indalex is the second largest 
aluminum extruder in the United States. Among the fabricated aluminum 
products that Indalex sells in the United States is coiled extruded 
aluminum tubing used in the formation of high frequency communications 
cables, which Indalex sells from its plant in Burlington, North 
Carolina.
    Pursuant to a bankruptcy court-supervised bidding process, Sapa and 
Indalex entered into an Asset Purchase Agreement on June 16, 2009, 
under which Sapa agreed to acquire substantially all the assets of 
Indalex and its affiliates in the United States and Canada. Sapa and 
Indalex are the only two manufacturers of coiled extruded aluminum 
tubing used in the formation of high frequency communications cables in 
the United States. Sapa's acquisition of Indalex thus would result in a 
monopoly. Without the head-to-head competition from Indalex, Sapa will 
be able to exercise power in the market for coiled extruded aluminum 
tubing used in the formation of high frequency communications cables 
sold in the United States by raising prices, lowering product quality, 
decreasing services, and reducing product innovation. This transaction 
is the subject of the Complaint and proposed Final Judgment filed by 
the United States on July 30, 2009.
    The United States has agreed to entry of the proposed Final 
Judgment and Hold Separate Stipulation and Order, which will prevent 
injury to competition that otherwise likely would arise from the 
proposed acquisition of Indalex by Sapa.

B. The Relevant Product Market

    Coiled extruded aluminum tubing, or ``aluminum sheathing,'' is used 
in the fabrication of coaxial cables, which are used in large 
quantities by cable

[[Page 42120]]

television companies in the United States and abroad to transmit high 
frequency broadband signals to their subscribers. Manufacturers of 
coaxial cables use aluminum sheathing sold by Sapa and Indalex to 
protect the cable wiring and insulation and to prevent the loss of the 
transmission signal to subscribers. To fulfill this function, aluminum 
sheathing must be continuous, and it must not have any imperfections 
such as disruptions, pin-holes, or deformations along the entire length 
of the product. Aluminum sheathing also must be hermetic, forming an 
air-tight barrier around the circumference of the tubing. In addition, 
the aluminum sheathing must have a minimum length of about 1,900 
continuous feet to accommodate the needs of finished coaxial cable 
manufacturers.
    Aluminum sheathing also must be thin-walled, typically with a wall 
thickness in the range of 0.019 to 0.057 inches, with a tolerance as 
low as +/- 0.002 inches across the entire aluminum sheathing product 
line. The ratio of the sheathing outer diameter to the wall thickness 
commonly falls into the 30:1 range. These thin walls make it difficult 
to maintain material consistency during the extrusion process and 
increase the risk of manufacturing defects and damage incurred during 
shipping.
    Aluminum sheathing used for coaxial cables must be made from high-
purity aluminum alloy with particular mechanical and electrical 
properties. Typically, it will be made from either aluminum alloy 1060, 
with a minimum aluminum content of 99.6 percent, or 1100, with a 
minimum aluminum content of 99.0 percent. These alloys are flexible and 
pliable making them particularly suitable for cable applications but 
also susceptible to denting or damage during processing. Any 
imperfection could increase the electrical impedance of the finished 
cable and reduce its performance. Moreover, the tubing must be designed 
and manufactured so that transmission of radio frequency signals up to 
a frequency of 3 Ghz at a signal loss level no worse than -30 decibels 
is achieved.
    Aluminum sheathing is coiled and sold to coaxial cable 
manufacturers that stretch the aluminum tubing and insert electrical 
wiring and insulation. There is no other product that coaxial cable 
manufacturers can use as a reasonably cost effective substitute for 
aluminum sheathing. A small but significant increase in the price of 
aluminum sheathing would not cause purchasers to substitute any other 
type of tubing to protect coaxial cables used to transmit high 
frequency broadband signals. Accordingly, the manufacture and sale of 
aluminum sheathing is a separate and distinct line of commerce and a 
relevant product market for the purpose of analyzing the effects of the 
acquisition under Section 7 of the Clayton Act.

 C. The Relevant Geographic Market

    All aluminum sheathing sold in the United States is manufactured in 
the United States and Indalex and Sapa sell aluminum sheathing for uses 
throughout the country. No aluminum sheathing is imported into the 
United States from abroad. The United States is a relevant geographic 
market for purposes of analyzing the effects of the acquisition under 
Section 7 of the Clayton Act.

D. The Competitive Effects of the Transaction

    If Sapa is allowed to acquire the aluminum sheathing business of 
Indalex, the number of manufacturers of aluminum sheathing will 
decrease from two to one. Thus, the transaction will result in a 
monopoly. Currently, Sapa and Indalex directly constrain each other's 
prices, limiting overall price increases for aluminum sheathing. 
Purchasers of aluminum sheathing in the United States have benefited 
from the competition between Sapa and Indalex through lower prices, 
higher quality, more innovation, and better service. Without the 
competitive constraint of head-to-head competition from Indalex, Sapa 
will have the ability to exercise market power by raising prices, 
lowering product quality, decreasing services, and lessening product 
innovation. The acquisition of Indalex by Sapa would remove a 
significant competitor in the market for aluminum sheathing in the 
United States. The resulting loss of competition would deny customers 
the benefits of competition, in violation of Section 7 of the Clayton 
Act. Entry into the manufacture and sale of aluminum sheathing would 
not be timely, likely, or sufficient to counter the anticompetitive 
effects of the transaction. A new entrant into the manufacture and sale 
of aluminum sheathing must obtain significant technical know-how in 
order to manufacture it. Extrusions of structural aluminum products are 
made from different aluminum alloys and are not typically formed into 
lengths of 2000 feet or more. Also, other types of aluminum extrusions 
typically are not coiled and require different post-extrusion 
processing. A new entrant would require significant time to develop the 
necessary expertise to perfect these processes in a high-volume 
production environment. Moreover, customers of aluminum sheathing must 
carefully qualify any new supplier, which can cost the customer over $1 
million and one year of time. Aluminum sheathing customers--i.e., cable 
manufacturers--incur significant liability in the form of repair and 
replacement costs and diminished reputation if their products do not 
perform as predicted.
    A new entrant also must invest in significant equipment and tooling 
to successfully manufacture the product. Appropriate dies, coiling 
systems, and presses of the size commonly used to produce aluminum 
sheathing require substantial investment, much of which represents sunk 
costs.
    A new entrant, to be successful, must produce aluminum sheathing in 
quantities that permit it to realize economies of scale. Current and 
projected demand for the product are not likely to be sufficient to 
attract new investment, particularly because customers are parties to 
long-term contracts, the expiration dates for which differ 
significantly. Thus, entry at sufficient scale to justify the cost of 
the required investment is unlikely.
    Accordingly, entry into the manufacture and sale of aluminum 
sheathing would not be timely, likely, or sufficient to counter 
anticompetitive price increases that Sapa would likely impose after its 
acquisition of Indalex.

III. Explanation of the Proposed Final Judgment

    The divestiture requirement of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in aluminum 
sheathing by establishing a new, independent, and economically viable 
competitor. The proposed Final Judgment requires the defendants to 
divest either Sapa's Catawba, North Carolina aluminum sheathing 
facility (``Catawba facility'') or the Indalex aluminum sheathing 
assets located at its Burlington, North Carolina extruded aluminum 
fabrication facility (``Burlington aluminum sheathing facility''). As 
the Burlington aluminum sheathing facility has not previously operated 
as a profitable stand-alone business, the proposed Final Judgment also 
requires that defendants divest a second press, which currently 
produces other extruded aluminum products, to ensure that a stand-alone 
aluminum sheathing facility at Burlington would be attractive to a 
viable purchaser. This will allow a purchaser to spread the fixed costs 
of operating the facility over a larger output, thereby reducing unit 
costs of production. Each facility profitably produces aluminum 
sheathing currently and likely would

[[Page 42121]]

continue to do so if acquired by a purchaser who can and will operate 
the facility as part of a viable, ongoing business in the production 
and sale of aluminum sheathing.
    Under the proposed Final Judgment, defendants will have ninety (90) 
calendar days from the filing of the Complaint or five (5) calendar 
days from notice of the entry of the Final Judgment by the Court, 
whichever is later, to divest either the Catawba facility or the 
Burlington aluminum sheathing facility to a purchaser acceptable to the 
United States, in its sole discretion. The United States, in its sole 
discretion, may agree to one or more extensions of this time period not 
to exceed sixty (60) calendar days in total. 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 agree to use their best efforts to 
accomplish the divestiture as expeditiously as possible and shall 
cooperate with prospective purchasers.
    Due to the exigencies of the bankruptcy process, the United States 
has expedited its investigation of the proposed transaction. The United 
States, however, has obtained sufficient information to conclude with 
reasonable certainty that divestiture of either the Catawba facility or 
the Burlington aluminum sheathing facility to a viable purchaser will 
solve the competitive concerns implicated by the proposed acquisition. 
Further, it is probable that defendants can accomplish the divestiture 
of one of these facilities to a viable purchaser.
    In the event, however, that defendants have not divested the 
Catawba facility or the Burlington aluminum sheathing facility 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 sell the entire Indalex extruded aluminum fabrication 
facility, located at 1507 Industry Drive, Burlington, North Carolina 
(``Burlington facility''). 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.
    Although defendants have the option of divesting either the Catawba 
facility or the Burlington aluminum sheathing facility, should 
defendants' efforts to divest either property fail, to ensure a 
successful divestiture, the proposed Final Judgment provides that the 
entire Burlington facility be made available for sale by the trustee. 
The United States is confident that the entire Burlington facility 
could be sold to a viable purchaser that would continue to compete in 
the manufacture and sale of aluminum sheathing in the United States.
    The divestiture provisions of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in the 
manufacture and sale of coiled extruded aluminum tubing used in the 
formation of high frequency communications cables 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 the defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and the 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, 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 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, 450 Fifth Street, NW., Suite 8700, 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 the defendants. The 
United States could have commenced litigation and sought a judicial 
order enjoining the acquisition of Indalex by Sapa. The United States 
is satisfied that the divestiture and other relief described in the 
proposed Final Judgment will remedy the competitive concern alleged in 
its Complaint without causing unnecessary harm to the creditors and 
employees of Indalex. The relief contained in the proposed Final 
Judgment would achieve substantially all of the relief that the United 
States would have obtained through litigation, but allow the overall 
transaction to close promptly to the benefit of Indalex's creditors and 
employees, while avoiding 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)(1). In making that determination, 
the Court shall consider:


[[Page 42122]]


    (A) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration or 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 1 (D.D.C. 2007) (assessing public 
interest standard under the Tunney Act).\1\
---------------------------------------------------------------------------

    \1\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors fo the 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).
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    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. 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\ In 
making its public interest determination, 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 the 
proposed remedies, its perception of the market structure, and its 
views of the nature of the case).
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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 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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    Court approval of a final judgment requires a standard that is 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. 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 Commc'ns, 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.\3\
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    \3\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 
(D.D.C. 2000) (noting that the ``Tunny Act expressly allows the 
court to make its public interest determination on the basis of the 
competitive impact statement and response to comments alone''); 
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.''); 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.'').
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VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the

[[Page 42123]]

APPA that were considered by the United States in formulating the 
proposed Final Judgment.

    Dated: July 30, 2009.

    Respectfully submitted.

John F. Greaney, Suzanne Morris,
Bar No. 450208,

Dando B. Cellini,
Warren A. Rosborough IV,
Bar No. 495063.

Attorneys, U.S. Department of Justice, Antitrust Division, Lit II 
Section, 450 Fifth Street, NW., Suite 8700, Washington, DC 20530, 
202-305-9965.

[FR Doc. E9-19987 Filed 8-19-09; 8:45 am]
BILLING CODE P