[Federal Register Volume 76, Number 93 (Friday, May 13, 2011)]
[Notices]
[Pages 28080-28093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11865]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Unilever N.V., 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. 
Unilever N.V., Unilever PLC, Conopco, Inc. and Alberto-Culver Co., 
Civil Action No. 1:11-cv-00858-ABJ. On May 6, 2011, the United States 
filed a Complaint alleging that the proposed acquisition by Unilever of 
Alberto-Culver Co. would violate Section 7 of the Clayton Act, 15 
U.S.C. 18. The Proposed Final Judgment, filed at the same time as the 
Complaint, requires Unilever and Alberto-Culver to divest the Alberto 
VO5 and Rave brands 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, 450 Fifth 
Street, NW., Suite 1010, Washington, DC 20530 (telephone: 202- 514-
2481), on the Department of Justice's Web site at http://

[[Page 28081]]

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.
    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 Joshua H. Soven, Chief, Litigation I Section, Antitrust Division, 
U.S. Department of Justice, 450 Fifth Street, NW., Suite 4100, 
Washington, DC 20530 (telephone: 202-307-0827).

Patricia A. Brink,
Director of Civil Enforcement.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, United States Department of Justice, 
Antitrust Division, Litigation I Section, 450 Fifth Street, NW., 
Suite 4100, Washington, DC 20530, Plaintiff, v. UNILEVER N.V., Weena 
455, PO Box 760, 3000 DK Rotterdam, The Netherlands, UNILEVER PLC, 
Unilever House, 100 Victoria Embankment, London EC4Y 0DY United 
Kingdom, CONOPCO, INC., 800 Sylvan Avenue, Englewood Cliffs, New 
Jersey 07632, and ALBERTO-CULVER CO., 2525 Armitage Avenue, Melrose 
Park, Illinois 60160, Defendants.

CASE NO.: 1:11-cv-00858
JUDGE: Jackson, Amy Berman
DATE FILED: 5/6/2011
DESCRIPTION: Antitrust

COMPLAINT

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil action to 
enjoin the proposed acquisition of Alberto-Culver Co. (``Alberto 
Culver'') by Unilever N.V., Unilever PLC, and Conopco, Inc. 
(collectively, ``Unilever'') and to obtain other equitable relief. The 
acquisition would likely substantially lessen competition in the United 
States in markets for value shampoo, value conditioner, and hairspray 
sold in retail stores in violation of Section 7 of the Clayton Act, 15 
U.S.C. Sec.  18, and result in higher prices for consumers in these 
markets. The United States alleges as follows:

I. NATURE OF THE ACTION

    1. Unilever and Alberto Culver are both large consumer products 
companies that sell shampoo, conditioner, hairspray, and many other 
products. On September 27, 2010, Unilever agreed to acquire Alberto 
Culver for approximately $3.7 billion.
    2. Value shampoo and value conditioner (collectively, ``value 
shampoo and conditioner'') are the lowest priced shampoos and 
conditioners sold in stores and almost always sell for less than $2.00 
per bottle. Unilever sells value shampoo and conditioner under the 
Suave Naturals brand; Alberto Culver sells value shampoo and 
conditioner under the Alberto VO5 brand.
    3. The proposed acquisition would eliminate substantial head-to-
head competition between Unilever's Suave Naturals and Alberto Culver's 
Alberto VO5 brands and give Unilever a near monopoly of the sale of 
value shampoo and conditioner in the United States with shares of 
approximately 90 percent in these two markets.
    4. The proposed acquisition would also eliminate substantial head-
to-head competition between Unilever and Alberto Culver in the United 
States for hairspray sold in retail stores. Unilever sells hairspray 
mainly under the Suave, Suave Professional, Rave, and Dove brands. 
Alberto Culver sells hairspray primarily under the TRESemm[eacute], 
Nexxus, and Alberto VO5 brands. The proposed acquisition would make 
Unilever the largest seller of hairspray in the United States by 
increasing its market share from approximately 24 percent to over 45 
percent.
    5. Because the acquisition likely substantially lessens competition 
in the United States for the sale of value shampoo, value conditioner, 
and hairspray sold in retail stores, it violates Section 7 of the 
Clayton Act.

II. JURISDICTION, VENUE, AND INTERSTATE COMMERCE

    6. The United States brings this action pursuant to Section 15 of 
the Clayton Act, as amended, 15 U.S.C. Sec.  25, to prevent and 
restrain Defendants from violating Section 7 of the Clayton Act, 15 
U.S.C. Sec.  18. The Court has subject-matter jurisdiction over this 
action pursuant to Section 15 of the Clayton Act, 15 U.S.C. Sec.  25, 
and 28 U.S.C. Sec. Sec.  1331, 1337(a), and 1345.
    7. Defendants Unilever and Alberto Culver manufacture, market, and 
sell consumer products, including shampoo, conditioner, and hairspray, 
in the flow of interstate commerce, and their production and sale of 
these products substantially affect interstate commerce. Defendants 
Unilever and Alberto Culver transact business and are found in the 
District of Columbia, through, among other things, selling consumer 
products to customers in this District. Venue is proper for Alberto 
Culver and Conopco, Inc. in this District under 15 U.S.C. Sec.  22. 
Venue is proper in the District of Columbia for Unilever N.V., a Dutch 
corporation, and Unilever PLC, an English corporation, under 28 U.S.C. 
Sec.  1391(d).
    8. Defendants have consented to personal jurisdiction and venue in 
this judicial district.

III. THE DEFENDANTS

    9. Unilever N.V. and Unilever PLC are corporations respectively 
organized under the laws of the Netherlands and England, with 
headquarters in Rotterdam and London. They wholly own Conopco, Inc., a 
New York corporation and U.S. subsidiary of Unilever N.V. and Unilever 
PLC. In addition to hair care products, Unilever owns more than 400 
brands of consumer products such as Hellmann's, Lipton, Surf, Dove, 
Suave, and Vaseline. Unilever had $62 billion in sales in 2010.
    10. Unilever's Suave Naturals brand is the most popular U.S. brand 
of value shampoo and conditioner, accounting for approximately 50 
percent of value shampoo and conditioner sales. Unilever's hairspray 
brands (primarily Suave, Suave Professionals, Rave, and Dove) account 
for approximately 24 percent of U.S. hairspray sales.
    11. Alberto Culver, a Delaware corporation headquartered in Melrose 
Park, Illinois, is a consumer products company that owns brands such as 
TRESemm[eacute], Alberto VO5, Noxzema, Nexxus, St. Ives., Static Guard, 
and Mrs. Dash. Alberto Culver had $1.6 billion in sales for the fiscal 
year ending September 30, 2010.
    12. Alberto Culver's Alberto VO5 brand is the second most popular 
U.S. brand of value shampoo and conditioner, accounting for 
approximately 39 percent of value shampoo and conditioner sales. 
Alberto Culver's hairspray brands (primarily TRESemm[eacute], Nexxus, 
and Alberto VO5) account for approximately 22 percent of U.S. hairspray 
sales.

IV. RELEVANT MARKETS

A. Relevant Product Markets

1) Value Shampoo and Conditioner
    13. Shampoo is a hair care product used to clean hair. Conditioner 
is a hair care product used to moisturize and enhance the appearance of 
hair.
    14. Value shampoos and conditioners are the lowest priced shampoos 
and conditioners sold in retail stores, with current retail prices of 
approximately $1 per bottle for smaller sizes (e.g., 15-18 oz.) and 
almost always less than $1.65 per bottle for larger family sizes (e.g., 
22.5-30 oz.). The parties' business documents and the hair care 
industry

[[Page 28082]]

consistently refer to products in this price range as belonging to a 
``value,'' ``opening-price-point,'' or ``dollar'' category. Industry 
participants, including manufacturers and retailers, widely recognize 
that shampoo and conditioner products within the value category compete 
more closely with each other than they do with higher priced shampoos 
or conditioners.
    15. Several factors considered together, including product 
ingredients, attributes, industry recognition, and price, indicate that 
value shampoo and conditioner are not reasonably interchangeable with 
more expensive shampoo and conditioner.
    16. Value shampoo and conditioner generally contain only 
inexpensive ingredients, such as basic soap and scent. More expensive 
shampoos and conditioners contain additional, more expensive 
ingredients, which are intended to provide specialized benefits not 
provided by value shampoo and conditioner such as smoothing, 
strengthening, repairing, adding volume, and benefits for different 
hair types (e.g., curly, fine, frizzy, or color-treated hair).
    17. Reflecting this difference in input costs and perceived 
consumer benefits, a significant price gap exists between value shampoo 
and conditioner and the next-lowest-priced shampoos and conditioners. 
For 15-18 oz. bottles, the price differential is generally 100 percent 
or more; value shampoo and conditioner are priced around $1 and the 
next-lowest-priced shampoos and conditioners are priced between $2.15 
and $2.80. For larger bottles, the price differential is also 
significant. For example, one large retailer's average price for a 30 
oz. value brand bottle of shampoo is $1.67 while the next-lowest-priced 
shampoo of that same size is, on average, $2.98.
    18. Total annual U.S. retail sales of value shampoo are 
approximately $177 million. Total annual U.S. retail sales of value 
conditioner are approximately $106 million.
    19. Consumers purchase value shampoo and conditioner almost 
exclusively through retail food, drug, dollar, and mass merchandise 
stores (collectively, ``retail stores''). Sales of value shampoo and 
conditioner through hairdressing salons are de minimis.
    20. Purchasers of value shampoo and conditioner are unlikely to 
reduce their purchases of value shampoo and conditioner in response to 
a small but significant and non-transitory price increase to an extent 
that would make such a price increase unprofitable.
    21. Value shampoo and value conditioner are each a relevant product 
market and a line of commerce within the meaning of Section 7 of the 
Clayton Act.
2) Hairspray Sold in Retail Stores
    22. Hairspray is a product used to set or maintain a hair style 
after the hair has been dried and styled.
    23. Mousses, gels, and other styling aids are not reasonably 
interchangeable with hairspray because consumers typically use those 
products in wet or damp hair to give hair form, shape, and style, not 
to set or maintain a hair style after the hair has been dried and 
styled.
    24. The vast majority of consumers purchase hairspray in retail 
stores. Some consumers purchase hairspray through hairdressing salons. 
Several factors considered together indicate that hairspray sold in 
salons is not reasonably interchangeable with hairspray sold in retail 
stores, including (i) purchasing hairspray in salons is less convenient 
for many consumers who purchase hairspray in retail stores, (ii) many 
more brands are available in retail stores than are available in 
salons, (iii) the hair care industry views sales of hairspray in retail 
stores as separate from sales in salons and uses different marketing 
strategies in those different sales channels, and (iv) the average 
price of hairspray sold in salons is at least three times more than the 
average price of hairspray sold in retail stores.
    25. Total annual U.S. retail sales of hairspray sold in retail 
stores are approximately $809 million.
    26. Purchasers of hairspray sold in retail stores are unlikely to 
reduce their purchases of hairspray sold in retail stores in response 
to a small but significant and non-transitory price increase to an 
extent that would make such a price increase unprofitable.
    27. Hairspray sold in retail stores is a relevant product market 
and a line of commerce within the meaning of Section 7 of the Clayton 
Act.

B. Relevant Geographic Markets

    28. The relevant geographic markets, within the meaning of Section 
7 of the Clayton Act, for the value shampoo, value conditioner, and 
hairspray product markets are no larger than the United States. Because 
of transportation costs, differences in brand presence and recognition, 
and U.S. regulations, a small but significant non-transitory price 
increase in each of these relevant product markets would not cause 
purchasers to switch to products sold outside of the United States to 
an extent that would make such a price increase unprofitable.

V. LIKELY ANTICOMPETITIVE EFFECTS

A. Value Shampoo and Conditioner

    29. The markets for value shampoo and conditioner are highly 
concentrated. By unit volume, Unilever's share in each market is 
approximately 50 percent, and Alberto Culver's share is approximately 
39 percent in each market. One other company accounts for almost all of 
the remaining sales in each market (approximately 10 percent).
    30. If the proposed acquisition is consummated, the value shampoo 
and conditioner markets would become substantially more concentrated. 
The combined firm would control approximately 90 percent of the sales 
of value shampoo and conditioner.
    31. Using a standard concentration measure called the Herfindahl-
Herschman Index (or ``HHI,'' defined and explained in Appendix A), the 
proposed acquisition would produce an HHI increase of approximately 
3913 and a post-acquisition HHI of approximately 8602 for value 
shampoo, and an HHI increase of approximately 3902 and a post-
acquisition HHI of approximately 8066 for value conditioner.
    32. The proposed acquisition would reduce the number of significant 
competitors from three to two in the value shampoo and conditioner 
markets and would eliminate significant head-to-head competition 
between Unilever and Alberto Culver. Currently, Unilever and Alberto 
Culver compete in the United States on price, and through product 
innovation and various forms of promotions.
    33. The significant increase in market concentration that the 
proposed acquisition would produce in the United States, combined with 
the loss of head-to-head competition, is likely to substantially lessen 
competition in violation of Section 7 of the Clayton Act, resulting in 
higher prices for consumers of value shampoo and conditioner.

B. Hairspray Sold in Retail Stores

    34. The market for hairspray sold through retail stores in the 
United States is moderately concentrated. By unit volume, Unilever's 
market share is approximately 24 percent, and Alberto Culver's is 
approximately 22 percent. The three next largest competitors have 
shares of approximately 20 percent, nine percent, and eight percent.
    35. If the proposed acquisition is consummated, the hairspray 
market would become substantially more concentrated, resulting in a 
highly concentrated market. The combined

[[Page 28083]]

firm would control approximately 46 percent of hairspray sold through 
retail stores. Post-merger, Unilever and the company with the next 
largest share would account for approximately 66 percent of the market.
    36. The proposed acquisition would produce an HHI increase of 
approximately 1034 and a post-acquisition HHI of approximately 2654 for 
hairspray.
    37. The proposed transaction would combine the two largest 
hairspray companies and would eliminate significant head-to-head 
competition between Unilever and Alberto Culver. Currently, Unilever 
and Alberto Culver compete in the United States on price and through 
product innovation, couponing and other promotions.
    38. The significant increase in market concentration that the 
proposed acquisition would produce, combined with the loss of head-to-
head competition, is likely to substantially lessen competition in 
violation of Section 7 of the Clayton Act, resulting in higher prices 
for consumers of hairspray sold through retail stores.

VI. ABSENCE OF COUNTERVAILING FACTORS

A. Entry

    39. Responses from competitors and new entry likely will not 
prevent the proposed acquisition's likely anticompetitive effects. 
Barriers to entering these markets include: (i) the substantial time 
and expense required to build a brand reputation to overcome existing 
consumer preferences; (ii) the substantial sunk costs for promotional 
and advertising activity needed to secure the distribution and 
placement of a new entrant's product in retail outlets; and (iii) the 
difficulty of securing shelf-space in retail outlets.
    40. Because of these entry barriers even sophisticated well-funded 
entrants have not been able to enter the value shampoo and conditioner 
markets. For example, one major U.S. manufacturer repositioned an 
existing brand into the value shampoo and conditioner markets in 2003, 
but discontinued it in 2004 because of low sales. Similarly, a major 
U.S. retailer introduced a private label value shampoo and conditioner 
in 2009, but also discontinued the product because of low sales.
    41. Entry has been similarly difficult for hairspray sold in retail 
stores. In the last two years, no hairspray company has increased its 
unit sales by three percentage points or more.

B. Efficiencies

    42. The proposed acquisition will not generate verifiable, merger-
specific efficiencies sufficient to reverse the likely competitive harm 
of the acquisition.

VII. VIOLATION ALLEGED

    43. The United States hereby incorporates paragraphs 1 through 42.
    44. Unilever's proposed acquisition of Alberto Culver would likely 
substantially lessen competition in interstate trade and commerce, in 
violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18, and 
would likely have the following effects, among others:
    a) actual and potential competition in the United States between 
Alberto Culver and Unilever for sales of value shampoo, value 
conditioner, and hairspray sold in retail stores would be eliminated;
    b) competition generally in the United States for value shampoo, 
value conditioner, and hairspray sold in retail stores would be 
substantially lessened.

VIII. REQUEST FOR RELIEF

    The United States requests:
    a) That the Court adjudge the proposed acquisition to violate 
Section 7 of the Clayton Act, 15 U.S.C. Sec.  18;
    b) That the Court permanently enjoin and restrain the Defendants 
from carrying out the proposed acquisition or from entering into or 
carrying out any other agreement, understanding, or plan by which 
Alberto Culver would be acquired by, acquire, or merge with Unilever;
    c) That the Court award the United States the costs of this action; 
and
    d) That the Court award such other relief to the United States as 
the Court may deem just and proper.

Dated: May 6, 2011
 Respectfully submitted,

FOR PLAINTIFF UNITED STATES OF AMERICA

/s/ Christine A. Varney
Christine A. Varney,
Assistant Attorney General (DC Bar No. 411654).

/s/ Joseph F. Wayland
Joseph F. Wayland,
Deputy Assistant Attorney General.

/s/ Patricia A. Brink
Patricia A. Brink,
Director of Civil Enforcement.

/s/ Joshua H. Soven
Joshua H. Soven,
Chief, Litigation I Section, (DC Bar No. 436633).

/s/ Peter J. Mucchetti
Peter J. Mucchetti,
Assistant Chief, Litigation I Section, (DC Bar No. 463202).

/s/ John P. Lohrer

John P. Lohrer (DC Bar No. 438939)
Andrea V. Arias
Barry L. Creech (DC Bar No. 421070)
Robert E. Draba (DC Bar No. 496815)
Amy R. Fitzpatrick (DC Bar No. 458680)
Tiffany Joseph (DC Bar No. 481878)
Richard D. Mosier (DC Bar No. 492489)
Julie A. Tenney
Trial Attorneys, United States Department of Justice, Antitrust 
Division, Litigation I Section, 450 Fifth Street, N.W. Suite 4100, 
Washington, DC 20530, Telephone: (202) 616-5125, Facsimile: (202) 
307-5802, E-mail: [email protected].

APPENDIX A

    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 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 points 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 1,500 and 2,500 points are 
considered to be moderately concentrated, and markets in which the HHI 
is in excess of 2,500 points are considered to be highly concentrated. 
See U.S. Department of Justice & FTC, Horizontal Merger Guidelines 
Sec.  5.3 (2010). Transactions that increase the HHI by more than 200 
points in highly concentrated markets presumptively raise antitrust 
concerns under the Horizontal Merger Guidelines issued by the 
Department of Justice and the Federal Trade Commission. See id.

THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, Plaintiff, v. UNILEVER N.V., UNILEVER 
PLC, CONOPCO, INC., and ALBERTO-CULVER COMPANY, Defendants.

CASE NO.: 1:11-cv-00858
JUDGE: Jackson, Amy Berman
DATE FILED: 5/6/2011
DESCRIPTION: Antitrust

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. Sec.  16(b)-(h), files this Competitive 
Impact Statement relating to the proposed Final Judgment

[[Page 28084]]

submitted for entry in this civil antitrust proceeding.

I. NATURE AND PURPOSE OF THE PROCEEDING

    The United States filed a civil antitrust Complaint on May 6, 2011, 
seeking to enjoin the proposed acquisition of Alberto-Culver Company 
(``Alberto Culver'') by Unilever N.V., Unilever PLC, and Conopco, Inc. 
(collectively ``Unilever''), alleging that it likely would 
substantially lessen competition in three product markets--value 
shampoo, value conditioner, and hairspray sold in retail stores--in 
violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18. The loss 
of competition from the acquisition likely would result in higher 
prices for value shampoo, value conditioner, and hairspray sold in 
retail stores in the United States.
    At the same time the Complaint was filed, the United States filed a 
Hold Separate Stipulation and Order (``Hold Separate'') and proposed 
Final Judgment, which are designed to eliminate the anticompetitive 
effects that would result from Unilever's acquisition of Alberto 
Culver. Under the proposed Final Judgment, which is explained more 
fully below, Unilever is required to divest the Alberto VO5 and Rave 
brands and related assets to one or more acquirers approved by the 
United States. Pursuant to the Hold Separate, Unilever and Alberto 
Culver must take certain steps to ensure that the assets being divested 
continue to be operated in a competitively and economically viable 
manner and that competition for the products being divested is 
maintained during the pendency of the 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 Final Judgment and to punish violations 
thereof.

II. EVENTS GIVING RISE TO THE ALLEGED VIOLATION

A. The Defendants and the Acquisition

    On September 27, 2010, Unilever N.V., Unilever PLC, and Conopco, 
Inc. agreed to acquire Alberto Culver for approximately $3.7 billion. 
Unilever N.V. and Unilever PLC are corporations respectively organized 
under the laws of the Netherlands and England, with headquarters in 
Rotterdam and London. They wholly own Conopco, Inc., a New York 
corporation and U.S. subsidiary of Unilever N.V. and Unilever PLC. 
Unilever sells consumer products in more than 100 countries under 
brands such as Hellmann's, Lipton, Surf, Dove, Suave, and Vaseline. 
Unilever has approximately 163,000 employees and had sales of $62 
billion in 2010.
    Alberto Culver, a Delaware corporation headquartered in Melrose 
Park, Illinois, sells consumer products in more than 100 countries 
under brands such as TRESemm[eacute], Alberto VO5, Noxzema, Nexxus, St. 
Ives, Static Guard, and Mrs. Dash. Alberto Culver has approximately 
2,500 employees and had sales of $1.6 billion for the fiscal year 
ending September 30, 2010.
    Unilever's Suave Naturals brand is the most popular U.S. brand of 
value shampoo and conditioner, accounting for approximately 50 percent 
of value shampoo and conditioner sales. Unilever's hairspray brands 
(primarily Suave, Suave Professionals, Rave, and Dove) account for 
approximately 24 percent of hairspray sold in retail stores in the 
United States.
    Alberto Culver's Alberto VO5 brand is the second most popular U.S. 
brand of value shampoo and conditioner, accounting for approximately 39 
percent of value shampoo and conditioner sales. Alberto Culver's 
hairspray brands (primarily TRESemm[eacute], Nexxus, and Alberto VO5) 
account for approximately 22 percent of hairspray sold in retail stores 
in the United States.

B. The Relevant Markets

1. Value Shampoo and Value Conditioner Are Relevant Product Markets
    Shampoo is a hair care product used to clean hair. Conditioner is a 
hair care product used to moisturize and enhance the appearance of 
hair.
    Value shampoos and conditioners are the lowest priced shampoos and 
conditioners sold in retail stores, with current retail prices of 
approximately $1 per bottle for smaller sizes (e.g., 15-18 oz.) and 
almost always less than $1.65 per bottle for larger family sizes (e.g., 
22.5-30 oz.). The parties' business documents and the hair care 
industry consistently refer to products in this price range as 
belonging to a ``value,'' ``opening-price-point,'' or ``dollar'' 
category. Industry participants, including manufacturers and retailers, 
widely recognize that shampoo and conditioner products within the value 
category compete substantially more closely with each other than they 
do with higher priced shampoos or conditioners. Total annual U.S. 
retail sales of value shampoo are approximately $177 million. Total 
annual U.S. retail sales of value conditioner are approximately $106 
million.
    Several factors considered together, including product ingredients, 
attributes, industry recognition, and price, indicate that value 
shampoo and conditioner are not reasonably interchangeable with more 
expensive shampoo and conditioner. Value shampoo and conditioner 
generally contain only inexpensive ingredients, such as basic soap and 
scent. More expensive shampoos and conditioners contain additional, 
more expensive ingredients, which are intended to provide specialized 
benefits not provided by value shampoo and conditioner such as 
smoothing, strengthening, repairing, adding volume, and benefits for 
different hair types (e.g., curly, fine, frizzy, or color-treated 
hair).
    Reflecting this difference in input costs and perceived consumer 
benefits, a significant price gap exists between value shampoo and 
conditioner and the next-lowest-priced shampoos and conditioners. For 
15-18 oz. bottles, the price differential is generally 100 percent or 
more; value shampoo and conditioner are priced around $1 and the next-
lowest-priced shampoos and conditioners are priced between $2.15 and 
$2.80. For larger bottles, the price differential is also significant. 
For example, one large retailer's average price for a 30 oz. value 
brand bottle of shampoo is $1.67 while the next-lowest-priced shampoo 
of that same size is, on average, $2.98.
    Consumers purchase value shampoo and conditioner almost exclusively 
through retail food, drug, dollar, and mass merchandise stores 
(collectively, ``retail stores''). Sales of value shampoo and 
conditioner through salons is de minimis. Purchasers of value shampoo 
and conditioner are unlikely to reduce their purchases of value shampoo 
and conditioner in response to a small but significant and non-
transitory price increase to an extent that would make such a price 
increase unprofitable. Value shampoo and value conditioner are, 
therefore, each a relevant product market and a line of commerce within 
the meaning of Section 7 of the Clayton Act.
2. Hairspray Sold In Retail Stores Is a Relevant Product Market
    Hairspray is a product used to set or maintain a hair style after 
the hair has been dried and styled. Mousses, gels, and other styling 
aids are not reasonably interchangeable with hairspray because 
consumers typically use those products

[[Page 28085]]

in wet or damp hair to give hair form, shape, and style, not to set or 
maintain a hair style after the hair has been dried and styled. Total 
annual U.S. retail sales of hairspray sold in retail stores are 
approximately $809 million.
    The vast majority of consumers purchase hairspray in retail stores. 
Some consumers purchase hairspray through hairdressing salons. Several 
factors considered together indicate that hairspray sold in salons is 
not reasonably interchangeable with hairspray sold in retail stores, 
including (i) purchasing hairspray in salons is less convenient for 
many consumers who purchase hairspray in retail stores, (ii) many more 
brands are available in retail stores than are available in salons, 
(iii) the hair care industry views sales of hairspray in retail stores 
as separate from sales in salons and uses different marketing 
strategies in those different sales channels, and (iv) the average 
price of hairspray sold in salons is at least three times more than the 
average price of hairspray sold in retail stores.
    Purchasers of hairspray sold in retail stores are unlikely to 
reduce their purchases of hairspray sold in retail stores in response 
to a small but significant and non-transitory price increase to an 
extent that would make such a price increase unprofitable. Hairspray 
sold in retail stores is, therefore, a relevant product market and a 
line of commerce within the meaning of Section 7 of the Clayton Act.
3. The Geographic Markets Are the United States
    The Complaint alleges that the United States constitutes a relevant 
geographic market within the meaning of Section 7 of the Clayton Act 
for each of the three product markets. Defendants sell value shampoo, 
value conditioner, and hairspray through retail stores throughout the 
United States. For several reasons, a small but significant non-
transitory price increase in each of these relevant product markets 
would not cause purchasers to switch to products sold outside of the 
United States to an extent that would make such a price increase 
unprofitable. First, brands preferred in the United States differ from 
brands preferred in foreign countries. Second, shipping relevant 
products from foreign countries to the United States would increase 
transportation costs to manufacturers and retailers. Finally, products 
sold outside the United States may not comply with U.S. regulations or 
have labeling suitable for the United States such that the product 
could be sold to consumers in the United States.

C. The Acquisition's Likely Anticompetitive Effects

1. Value Shampoo and Value Conditioner
    The complaint alleges that the proposed acquisition would 
substantially lessen competition in the sale of value shampoo and 
conditioner in the United States, resulting in higher prices for 
consumers in these markets. Currently, Unilever and Alberto Culver 
compete in these markets on price and through product innovation and 
various forms of promotions. The combination would eliminate that 
significant head-to-head competition and reduce the number of 
significant competitors in the value shampoo and conditioner markets 
from three to two. In each market, Unilever's current share (by unit 
volume) is approximately 50 percent, and Alberto Culver's share is 
approximately 39 percent. One other competitor accounts for almost all 
of the remaining sales in each market (approximately 10 percent).
    The markets for value shampoo and conditioner are already highly 
concentrated, and the acquisition would increase concentration 
significantly, resulting in Unilever controlling approximately 90 
percent of both markets. Using a standard concentration measure called 
the Herfindahl-Herschman Index (``HHI''), the proposed acquisition 
would produce an HHI increase of approximately 3913 and a post-
acquisition HHI of approximately 8602 for value shampoo, and an HHI 
increase of approximately 3902 and a post-acquisition HHI of 
approximately 8066 for value conditioner.
    The acquisition would enable the combined firm to profit by 
unilaterally raising the prices of its products above the pre-merger 
price level. The parties' documents and diversion of sales caused by 
past price changes indicate that a significant fraction of customers 
purchasing Unilever's and Alberto Culver's value shampoos and 
conditioners view the other merging firm's value shampoo and 
conditioner as their next best choice. Consequently, a significant 
fraction of the sales lost due to price increases on Unilever's 
products would be diverted to products of Alberto Culver, and vice 
versa. See U.S. Dept. of Justice & FTC, Horizontal Merger Guidelines 
Sec.  6.1 (2010). The pre-merger margins on the parties' value shampoo 
and conditioner products are sufficiently high that the amount of 
recaptured lost sales would make the price increases profitable even 
though such price increases would not have been profitable prior to the 
merger. See id. Consequently, the proposed acquisition would likely 
cause the combined firm to raise the prices that it charges for value 
shampoo and conditioner.
2. Hairspray
    The complaint alleges that the proposed acquisition would 
substantially lessen competition in the sale of hairspray sold in 
retail stores in the United States, resulting in higher prices for 
consumers in this market. Currently, Unilever and Alberto Culver 
compete in this market on price and through couponing, product 
innovation, and various forms of promotions. The combination would 
eliminate that significant head-to-head competition. Unilever's current 
share (by unit volume) of this market is approximately 24 percent, and 
Alberto Culver's is approximately 22 percent. The three next largest 
competitors have shares of approximately 20 percent, nine percent, and 
eight percent.
    If the proposed acquisition is consummated, the market for 
hairspray sold in retail stores would become substantially more 
concentrated, resulting in a highly concentrated market. Using the HHI 
concentration measure, the proposed acquisition would produce an HHI 
increase of approximately 1034 and a post-acquisition HHI of 
approximately 2654 for hairspray sold in retail stores.
    The acquisition would enable the combined firm to profit by 
unilaterally raising hairspray prices above the pre-merger price level. 
The parties' documents and diversion of sales caused by past price 
changes indicate that a significant fraction of customers purchasing 
Unilever's and Alberto Culver's brands of hairspray view the other 
merging firm's brands of hairspray as their next best choice. 
Consequently, a significant fraction of the sales lost due to price 
increases on Unilever's products would be diverted to products of 
Alberto Culver, and vice versa. See U.S. Dept. of Justice & FTC, 
Horizontal Merger Guidelines Sec.  6.1 (2010).
    The significant fraction of customers that view Unilever's and 
Alberto Culver's hairspray brands as their next-best choice does not 
approach a majority. ``However, unless pre-merger margins between price 
and incremental cost are low, that significant fraction need not 
approach a majority * * *. A merger may produce significant unilateral 
effects for a given product even though many more sales are diverted to 
products sold by non-merging firms than to products previously sold by 
the merger partner.'' Id. The pre-merger margins on the parties' 
hairspray products are

[[Page 28086]]

sufficiently high that the amount of recaptured lost sales would make 
the price increase profitable even though such price increases would 
not have been profitable prior to the merger.
3. Entry
    The Complaint alleges that responses from competitors and new entry 
likely will not prevent the proposed acquisition's likely 
anticompetitive effects. Barriers to entering these markets include: 
(i) the substantial time and expense required to build a brand 
reputation to overcome existing consumer preferences; (ii) the 
substantial sunk costs for promotional and advertising activity needed 
to secure the distribution and placement of a new entrant's product in 
retail outlets; and (iii) the difficulty of securing shelf-space in 
retail outlets.
    Because of these entry barriers even sophisticated, well-funded 
entrants have not been able to enter the value shampoo and conditioner 
markets. For example, one major U.S. manufacturer repositioned an 
existing brand into the value shampoo and conditioner markets in 2003, 
but discontinued it in 2004 because of low sales. Similarly, a major 
U.S. retailer introduced a private label value shampoo and conditioner 
in 2009, but also discontinued the product because of low sales.
    Entry has been similarly difficult for hairspray sold in retail 
stores. In the last two years, no hairspray company has increased its 
unit sales by three percentage points or more.
    Therefore, entry by new firms or the threat of entry by new firms 
would not defeat the substantial lessening of competition in the 
manufacture and sale of value shampoo, value conditioner, or hairspray 
in the United States that likely would result from Unilever's 
acquisition of Alberto Culver.

III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT

    The proposed Final Judgment requires significant divestitures that 
will preserve competition in the markets for value shampoo, value 
conditioner, and hairspray sold in retail stores. Within 90 calendar 
days after filing of the proposed Final Judgment or five calendar days 
after entry of a Final Judgment by the Court, whichever is later, the 
Defendants are required to divest the Alberto VO5 and Rave brands and 
associated assets to an acquirer or acquirers that has or have the 
intent and capability (including the necessary managerial, operational, 
technical, and financial capability) to compete effectively in the 
business of value shampoo, value conditioner, and/or hairspray 
products.
    The Alberto VO5 brand consists of value shampoo, value conditioner, 
hairspray, and other hair styling products. The Rave brand consists of 
hairspray and mousse products. The divestiture of the Alberto VO5 brand 
and associated assets is limited to the United States because a U.S.-
only divestiture of Alberto VO5 is sufficient to address the 
competitive harm that the acquisition would produce in the United 
States. Alberto Culver has substantial sales of Alberto VO5 products in 
other countries. Sales of Rave outside of the United States are de 
minimis. Accordingly, the proposed Final Judgment requires divestiture 
of the worldwide rights to Rave because it is the most efficient way to 
divest the brand.
    The divestiture of Alberto VO5, which accounts for 39 percent of 
the value shampoo and conditioner markets, will preserve the pre-merger 
competition in the value shampoo and conditioner markets by maintaining 
Alberto VO5 as a competitor to Suave Naturals. In particular, the 
United States' analysis of the proposed merger indicated that the 
merged company was likely to raise prices on Suave Naturals and Alberto 
VO5 because lost sales on one would be diverted to the other. 
Divestiture of the Alberto VO5 brand eliminates the merged firm's 
ability to raise prices on Alberto VO5 and preserves a competitor to 
Suave Naturals.
    The divestitures of Rave and Alberto VO5, which together account 
for 8 percent of hairspray sold in retail stores, will reduce the 
merged firm's post-merger market share from approximately 46 percent to 
approximately 38 percent. These divestitures are sufficient to prevent 
an increase in the merged firm's incentives and ability to raise 
hairspray prices because the divestitures will significantly increase 
the amount of sales that would be diverted to products of non-merging 
firms.
    In particular, the United States' analysis of the proposed merger 
indicated that the merged company was especially likely to raise prices 
on Suave, Suave Professionals, and Rave hairspray products because lost 
sales would be diverted to former Alberto Culver products (e.g., 
TRESemm[eacute] and Alberto VO5 hairspray). Divestiture of the Rave 
brand eliminates the merged firm's ability to raise prices on Rave 
hairspray products. Additionally, the United States' analysis indicated 
that Rave is a close substitute to Suave and Suave Professionals. 
Because Rave is a close substitute to Suave and Suave Professionals, 
Rave's divestiture will create a competitor that will significantly 
decrease the merged firm's incentive to raise prices on Suave and Suave 
Professionals products.
    In addition to divestiture of the Alberto VO5 and Rave brands, the 
proposed Final Judgment requires divestiture of other related 
intangible assets and certain related tangible assets. The other 
intangible assets include the rights to trade dress, trade secrets, and 
other intellectual property used in the research, development, 
production, marketing, servicing, distribution, or sale of the Alberto 
VO5 and Rave brands. The tangible assets include equipment used 
primarily to manufacture the divested brands, and records, contracts, 
permits, customer information, inventory, molds, packaging, artwork, 
and other assets related to the divested brands. The proposed Final 
Judgment does not require divestiture of any manufacturing plants or 
real property because many contract manufacturers have the available 
capacity, plants, and ability to manufacture the Alberto VO5 and Rave 
products. Requiring the Defendants to divest one or more manufacturing 
facilities is unnecessary where independent capacity is readily 
available or can be quickly built.
    The proposed Final Judgment provides that, at the purchaser's 
option, the Defendants must divest any equipment primarily used by the 
parties to manufacture the Alberto VO5 and Rave products. Potential 
buyers of the divested assets may not want to purchase this equipment 
because they will use contract manufacturers to make the divested 
products or because they already own equipment that is capable of 
efficiently making the divested products. The equipment is also widely 
available from others. However, due primarily to lead times of up to 
nine months for ordering and receiving new equipment, establishing a 
new manufacturing line can take up to a year. The option to purchase 
this equipment may, therefore, allow some potential purchasers to be 
ready to produce the divested products sooner than if this equipment 
were not available.
    Defendants must use their best efforts to divest the assets as 
expeditiously as possible. The proposed Final Judgment provides that 
the assets must be divested in such a way as to satisfy the United 
States, in its sole discretion, that an acquirer can and will use the 
assets as part of a viable, ongoing business engaged in the sale of 
value shampoo, value conditioner, and/or hairspray in retail stores in 
the United States.

[[Page 28087]]

    If Defendants do not accomplish the ordered divestitures within the 
prescribed time period, then Section V of the proposed Final Judgment 
provides that the Court will appoint a trustee, selected by the United 
States, to complete the divestitures. If a trustee is appointed, the 
proposed Final Judgment provides that Defendants must cooperate fully 
with the trustee and pay all of the trustee's costs and expenses. The 
trustee's compensation will be structured to provide an incentive for 
the trustee based on the price and terms of the divestitures and the 
speed with which they are accomplished. After the trustee's appointment 
becomes effective, the trustee will file monthly reports with the 
United States and the Court setting forth the trustee's efforts to 
accomplish the required divestitures. At the end of six months, if the 
divestitures have not been accomplished, the trustee and the United 
States will make recommendations to the Court, which shall enter such 
orders as appropriate to carry out the purpose of the Final Judgment, 
including extending the trust or the term of the trustee's appointment.

IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS

    Section 4 of the Clayton Act, 15 U.S.C. Sec.  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. 
Sec.  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, Unilever, and Alberto Culver 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 United States Department of Justice, which remains 
free to withdraw its consent to the proposed Final Judgment at any time 
before 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:

Joshua H. Soven
Chief, Litigation I Section
Antitrust Division
United States Department of Justice
450 Fifth Street, NW, Suite 4100
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 a judicial 
order enjoining Unilever's acquisition of Alberto-Culver. The United 
States is satisfied, however, that divestiture of the assets described 
in the proposed Final Judgment will preserve competition for the sale 
of value shampoo, value conditioner, and hairspray 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. Sec.  16(e)(1). 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. Sec.  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); United 
States v. InBev N.V./S.A., 2009-2 Trade Cas. (CCH) ] 76,736, 2009 U.S. 
Dist. LEXIS 84787, No. 08-1965 (JR), at *3 (D.D.C. Aug. 11, 2009) 
(noting that the court's review of a consent judgment is limited and 
only inquires ``into whether the government's determination that the 
proposed remedies will cure the antitrust violations alleged in the 
complaint was reasonable, and whether the mechanisms to enforce the 
final judgment are clear and manageable.'').\1\
---------------------------------------------------------------------------

    \1\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for courts 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. 
Sec.  16(e) (2004), with 15 U.S.C. Sec.  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, a court considers under the APPA, among other things, 
the relationship between the remedy secured and the specific 
allegations set forth in the United States' complaint, whether the 
decree is sufficiently clear, whether enforcement mechanisms are 
sufficient, and whether the decree may positively harm third parties. 
See Microsoft, 56

[[Page 28088]]

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; InBev, 2009 U.S. Dist. LEXIS 84787, at *3; 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).\2\ 
In 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'').
---------------------------------------------------------------------------

    \2\ 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' '').
---------------------------------------------------------------------------

    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; see also InBev, 2009 
U.S. Dist. LEXIS 84787, at *20 (``the `public interest' is not to be 
measured by comparing the violations alleged in the complaint against 
those the court believes could have, or even should have, been 
alleged''). 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. Microsoft, 56 F.3d at 1459-60. 
As the United States District Court for the District of Columbia 
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 using 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. Sec.  16(e)(2). This language effectuates 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\
---------------------------------------------------------------------------

    \3\ 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''); 
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 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.'').
---------------------------------------------------------------------------

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: May 6, 2011

 Respectfully submitted,

/s/Amy R. Fitzpatrick--------------------------------------------------
Amy R. Fitzpatrick (DC Bar No. 458680)
Attorney for the United States, United States Department of Justice, 
Antitrust Division, Litigation I Section, 450 Fifth Street, N.W., 
Suite 4100, Washington, DC 20530, Telephone: (202) 532-4558, 
Facsimile: (202) 307-5802, E-mail: [email protected].

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, Plaintiff, v. UNILEVER N.V., UNILEVER 
PLC, CONOPCO, INC., and ALBERTO-CULVER CO., Defendants.

CASE NO.: 1:11-cv-00858
JUDGE: Jackson, Amy Berman
DATE FILED: 5/6/2011
DESCRIPTION: Antitrust

[PROPOSED] FINAL JUDGMENT

    WHEREAS, Plaintiff, United States of America, filed its Complaint 
on May 6, 2011, and the United States of America and defendants 
Unilever, N.V., Unilever PLC, Conopco, Inc., (collectively, 
``Unilever'') and Alberto-Culver Company (``Alberto Culver'') 
(collectively, ``Defendants''), by their respective attorneys, have 
consented to the entry of this Final Judgment without

[[Page 28089]]

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 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 claims upon which 
relief may be granted against Defendants under Section 7 of the Clayton 
Act, as amended (15 U.S.C. Sec.  18).

II. Definitions

    As used in this Final Judgment:
    (A) ``Acquirer'' means the person, persons, entity or entities to 
whom Defendants divest all or some of the Divestiture Assets.
    (B) ``Alberto Culver'' means Defendant Alberto-Culver Co., a 
Delaware corporation with its headquarters in Melrose Park, Illinois, 
its successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    (C) ``Alberto VO5 Brand Name'' means Alberto VO5 and any other name 
that uses, incorporates, or references the Alberto VO5 name in the 
United States, including but not limited to Alberto VO5 Extra Body 
Shampoo and Conditioner, Alberto VO5 Normal Shampoo and Conditioner, 
Alberto VO5 Repair and Protect Shampoo and Conditioner, Alberto VO5 2-
in-1 Shampoo and Conditioner, Alberto VO5 Split Ends Shampoo and 
Conditioner, Alberto VO5 Moisture Milks Shampoo and Conditioner, 
Alberto VO5 Herbal Escapes Shampoo and Conditioner, Alberto VO5 Tea 
Therapy Shampoo and Conditioner, Alberto VO5 Silky Experiences Shampoo 
and Conditioner, Alberto VO5 Perfect Hold Aerosol Hairspray, Alberto 
VO5 Perfect Hold Non-Aerosol Hairspray, Alberto VO5 Perfect Hold 
Styling Mousse, Alberto VO5 Perfect Hold Styling Gel, Alberto VO5 Hair 
Spray Regular, Alberto VO5 Hair Spray Super, Alberto VO5 Hair Spray 
Brush Out, Alberto VO5 Hair Spray Extra Body, Alberto VO5 Hair Spray 
Unscented, Alberto VO5 Conditioning Hairdressing, Alberto VO5 Sheer 
Hairdressing Conditioning Cream, Alberto VO5 Hot Oil Shower Works 
Conditioning Treatment, Alberto VO5 Hot Oil Moisturizing Conditioning 
Treatment, Alberto VO5 Detangle and Shine Leave-in Conditioner, Alberto 
VO5 Total Hair Recovery Conditioning Treatment, and any extensions of 
any one or more of such products.
    (D) ``Alberto VO5 Business'' means Alberto Culver's business 
engaged in the research, development, licensing (as licensor or as 
licensee), production, marketing, servicing or sale of any Alberto VO5 
Product, including:
    (i) All tangible assets used primarily in the research, 
development, marketing, or sale of any Alberto VO5 Product including 
but not limited to licenses, permits or authorizations issued by any 
governmental organization; contracts, teaming arrangements, agreements, 
leases commitments, certifications and understandings, including 
agreements with suppliers, distributors, wholesalers, retailers, 
marketers, or advertisers; customer lists; accounts, credit record, and 
related customer information; product inventory; packaging and artwork 
relating to such packaging; molds and silk screens; and all performance 
records and all other records. Provided, however, that Unilever may 
retain the portions of such tangible assets that relate to products 
other than any Alberto VO5 Product where such asset reasonably can be 
divided;
    (ii) At the option of the Acquirer, all tangible assets used 
primarily in the manufacturing of any Alberto VO5 Product, including 
manufacturing equipment, materials and supplies. Provided, however, 
that Defendants have no obligation to divest any real property as part 
of the Alberto VO5 Business;
    (iii) All legal rights to the Alberto VO5 Brand Name for use in the 
United States;
    (iv) All intellectual property used primarily in the research, 
development, production, marketing, servicing, distribution or sale of 
any Alberto VO5 Product, including but not limited to all legal rights 
associated with the products, including patents, licenses, and 
sublicenses, copyrights, Licensed Marks, Trade Dress, and other 
intellectual property, for use in the United States; and a non-
exclusive, transferable, royalty-free right to all other intellectual 
property used in the research, development, production, marketing, 
servicing distribution or sale of any Alberto VO5 Product for the 
purpose of the research, development, production, marketing, servicing, 
distribution or sale in the United States of any Alberto VO5 Product. 
Provided, however that with respect to any intellectual property 
divested pursuant to this subsection (iv) that Defendants have used in 
products not being divested, the Acquirer shall provide to Defendants a 
worldwide, non-exclusive, transferable, royalty-free right to use such 
intellectual property in the research, development, production, 
marketing, servicing, distribution or sale of any product not being 
divested; and
    (v) All intangible assets, other than intangible assets set forth 
in subsection (iv) above, used in the research, development, 
production, marketing, servicing, distribution or sale of any Alberto 
VO5 Product in the United States for use in the United States, 
including all trade secrets; all technical information, computer 
software and related documentation, know-how, and Formulas, including 
information relating to plans for, improvement to, or line extensions 
of, the products under the Alberto VO5 Brand Name; all research, 
packaging, sales marketing, advertising and distribution know-how and 
documentation, including plan-o-grams, marketing and sales data, 
packaging designs, quality assurance and control procedures; all 
manuals and technical information Alberto Culver provides to its own 
employees, customers, suppliers, agents or licensees; and all research 
data concerning historic and current research and development efforts, 
including, but not limited to, designs of experiments, and the results 
of successful and unsuccessful designs and experiments. Provided, that 
with respect to any intangible assets that, prior to the merger, were 
being used in the research, development, production, marketing, 
servicing, distribution or sale of any Alberto VO5 Product and any 
product not being divested, Defendants may utilize and retain the 
portions of such

[[Page 28090]]

intangible assets that relate solely to products other than any Alberto 
VO5 Product where such assets reasonably can be divided, and may 
utilize and retain copies of such intangible assets that relate to both 
any Alberto VO5 Product and any other product not being divested.
    (E) ``Albert VO5 Product'' means any product that Alberto Culver 
sold, sells, or has plans to sell under the Alberto VO5 Brand Name in 
the United States.
    (F) ``Defendants'' mean Unilever and Alberto Culver.
    (G) ``Divestiture Assets'' mean the Alberto VO5 Business and the 
Rave Business.
    (H) ``Formulas'' mean all Defendants' formulas, processes, and 
specifications used by the Defendants in connection with the production 
and packaging associated with the goods manufactured, distributed, 
marketed, and sold under a brand name, including, without limitation, 
Defendants' ingredients, manufacturing processes, equipment and 
material specifications, trade and manufacturing secrets, know-how, and 
scientific and technical information.
    (I) ``Licensed Marks'' mean all trademarks, service marks, or trade 
names belonging or licensed to Defendants (whether registered or 
unregistered, or whether the subject of a pending application) 
associated with the goods manufactured, distributed, marketed, and sold 
under a brand name.
    (J) ``Rave Brand Name'' means Rave and any other name that uses, 
incorporates, or references the Rave name, including but not limited to 
Rave 4x Mega Scented Aerosol Hairspray, Rave 4x Mega Scented Non-
Aerosol Hairspray, Rave 4x Mega Unscented Aerosol Hairspray, Rave 4x 
Mega Unscented Non-Aerosol Hairspray, Rave 2x Low Control Bodifying 
Mousse, Rave 2x Extra Bodifying Mousse, and any extensions of any one 
or more of such products.
    (K) ``Rave Business'' means Unilever's business engaged in the 
research, development, licensing (as licensor or as licensee), 
production, marketing, servicing or sale of any Rave Product, 
including:
    (i) All tangible assets used primarily in the research, 
development, marketing, or sale of any Rave Product including but not 
limited to licenses, permits or authorizations issued by any 
governmental organization; contracts, teaming arrangements, agreements, 
leases commitments, certifications and understandings, including 
agreements with suppliers, distributors, wholesalers, retailers, 
marketers, or advertisers; customer lists; accounts, credit record, and 
related customer information; product inventory; packaging and artwork 
relating to such packaging; molds and silk screens; and all performance 
records and all other records. Provided, however, that Unilever may 
retain the portions of such tangible assets that relate to products 
other than any Rave Product where such asset reasonably can be divided;
    (ii) At the option of the Acquirer, all tangible assets used 
primarily in the manufacturing of any Rave Product, including 
manufacturing equipment, materials and supplies. Provided, however, 
that Defendants have no obligation to divest any real property as part 
of the Rave Business;
    (iii) All legal rights to the Rave Brand Name. Provided, however, 
that Defendants shall not be required to give the Acquirer rights to 
use the terms ``Unilever'' or ``Suave,'' or any derivative of the terms 
``Unilever'' or ``Suave;''
    (iv) All intellectual property used primarily in the research, 
development, production, marketing, servicing, distribution or sale of 
any Rave Product, including but not limited to all legal rights 
associated with the products, including patents, licenses, and 
sublicenses, copyrights, Licensed Marks, Trade Dress, and other 
intellectual property; and a non-exclusive, transferable, royalty-free 
right to all other intellectual property used in the research, 
development, production, marketing, servicing distribution or sale of 
any Rave Product for the purpose of the research, development, 
production, marketing, servicing, distribution or sale of any Rave 
Product. Provided, however that with respect to any intellectual 
property divested pursuant to this subsection (iv) that Defendants have 
used in products not being divested, the Acquirer shall provide to 
Defendants a worldwide, non-exclusive, transferable, royalty-free right 
to use such intellectual property in the research, development, 
production, marketing, servicing, distribution or sale of any product 
not being divested; and
    (v) All intangible assets, other than intangible assets set forth 
in subsection (iv) above, used in the research, development, 
production, marketing, servicing, distribution or sale of any Rave 
Product, including all trade secrets; all technical information, 
computer software and related documentation, know-how, and Formulas, 
including information relating to plans for, improvement to, or line 
extensions of, the products under the Rave Brand Name; all research, 
packaging, sales marketing, advertising and distribution know-how and 
documentation, including plan-o-grams, marketing and sales data, 
packaging designs, quality assurance and control procedures; all 
manuals and technical information Unilever provides to its own 
employees, customers, suppliers, agents or licensees; and all research 
data concerning historic and current research and development efforts, 
including, but not limited to, designs of experiments, and the results 
of successful and unsuccessful designs and experiments. Provided, that 
with respect to any intangible assets that, prior to the merger, were 
being used in the research, development, production, marketing, 
servicing, distribution or sale of any Rave Product and any product not 
being divested, Defendants may utilize and retain the portions of such 
intangible assets that relate solely to products other than any Rave 
Product where such assets reasonably can be divided, and may utilize 
and retain copies of such intangible assets that relate to both any 
Rave Product and any other product not being divested.
    (L) ``Rave Product'' means any product that Unilever sold, sells, 
or has plans to sell under the Rave Brand Name anywhere in the world.
    (M) ``Trade Dress'' means the print, style, color, labels, and 
other elements of trade dress currently used by Defendants and/or their 
subsidiaries, divisions, groups, affiliates, partnerships, and joint 
ventures in association with the goods manufactured, distributed, 
marketed, and sold under a brand name.
    (N) ``Unilever'' means defendants Unilever, N.V. and Unilever PLC, 
corporations respectively organized under the laws of the Netherlands 
and England, with headquarters in Rotterdam and London, and their 
successors and assigns, their subsidiaries, divisions, groups, 
affiliates, partnerships, and joint ventures, and their respective 
directors, officers, managers, agents, and employees. Unilever includes 
Conopco, Inc., a New York corporation, a wholly owned subsidiary of 
Unilever N.V. and Unilever PLC.

III. Applicability

    (A) This Final Judgment applies to all Defendants, as defined 
above, and all other persons in active concert or participation with 
the Defendants who receive actual notice of this Final Judgment by 
personal service or otherwise.
    (B) If, prior to complying with Section IV or V of this Final 
Judgment, Defendants sell, license, or otherwise disposes of all or 
substantially all of their assets or of lesser business units that 
include the Divestiture Assets,

[[Page 28091]]

Defendants shall require the purchaser(s) to be bound by the provisions 
of this Final Judgment. Defendants need not obtain such an agreement 
from the Acquirer(s) 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 Proposed Final Judgment or five 
(5) calendar days after 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 or Acquirers 
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.
    (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 who inquires about 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(s) and the United States 
with information relating to the personnel involved in the design, 
product development, management, operations, or sales activities 
relating to the Divestiture Assets to enable the Acquirer(s) to make 
offers of employment. Defendants will not interfere with any 
negotiations by the Acquirer(s) to employ or contract with any 
Defendants' employee whose primary responsibility relates to the 
Divestiture Assets. Interference with respect to this paragraph 
includes, but is not limited to, offering to increase an employee's 
salary or benefits other than as a part of a company-wide increase in 
salary or benefits. In addition, for each employee who elects 
employment by the Acquirer or Acquirers, Defendants shall vest all 
unvested pension and other equity rights of that employee and provide 
all benefits to which the employee would have been entitled if 
terminated without cause.
    (D) Defendants shall waive all noncompete agreements for any 
current or former employee employed in the design, development, 
production, marketing, servicing, distribution, and/or sale of any of 
the Divestiture Assets who the Acquirer(s) employs with relation to the 
Divestiture Assets.
    (E) Defendants shall permit prospective Acquirers of the 
Divestiture Assets to (1) have reasonable access to personnel; (2) make 
reasonable inspections of the physical facilities; (3) access to any 
and all environmental, zoning, and other permit documents and 
information; and (4) access to any and all financial, operational, or 
other documents and information customarily provided as part of a due 
diligence process.
    (F) Defendants shall warrant to the Acquirer(s) that the 
Divestiture Assets will be operational on the date of sale.
    (G) Defendants shall not take any action that will impede in any 
way the permitting, operation, or divestiture of the Divestiture 
Assets.
    (H) In connection with the divestiture of the Divestiture Assets 
pursuant to Section IV, or by trustee appointed pursuant to Section V 
of this Final Judgment, at the option of the Acquirer(s), the 
Defendants shall enter into transitional supply and services 
agreements, up to six (6) months in length, for the supply of Alberto 
VO5 and/or Rave Products and the provision of services required to 
transfer the Alberto VO5 and/or Rave Businesses to the Acquirer(s). At 
the request of the Acquirer, the United States, in its sole discretion, 
may agree to one or more extensions of this time period, not to exceed 
twelve (12) months in total. The terms and conditions of such 
agreements must be acceptable to the United States in its sole 
discretion. Upon the expiration or termination of such agreements, the 
Defendants shall not enter into or have any supply or service 
agreements with the Acquirer(s) relating to the sale of the Alberto VO5 
and/or Rave Products for a period of three (3) years thereafter.
    (I) 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, and shall be accomplished in such a way as to satisfy the 
United States, in its sole discretion, that the divestiture will 
achieve the purposes of this Final Judgment and that the Divestiture 
Assets can and will be used by the Acquirer(s) as part of viable, 
ongoing business engaged in the sale of shampoo, conditioner, and/or 
hairspray. Divestiture of the Divestiture Assets may be made to one or 
more Acquirers, provided that in each instance it is demonstrated to 
the sole satisfaction of the United States that the Divestiture Assets 
will remain viable and the divestiture of such assets will remedy the 
competitive harm alleged in the Complaint. The divestitures, whether 
pursuant to Section IV or Section V of this Final Judgment:
    (i) shall be made to an Acquirer or Acquirers that, in the United 
States' sole judgment, has or have the intent and capability (including 
the necessary managerial, operational, technical, and financial 
capability) of competing effectively in the sale of shampoo, 
conditioner and/or hairspray; and
    (ii) 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 divestiture of the Divestiture 
Assets.
    (B) After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the 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

[[Page 28092]]

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 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 Divestiture Assets, and Defendants shall 
develop financial and other information relevant to the Divestiture 
Assets as the trustee may reasonably request, subject to reasonable 
protection for trade secrets 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 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 
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 the report contains information that the trustee deems 
confidential, the report 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 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(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 to the United States 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(s) 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 their 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, 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 and to provide required information to prospective Acquirers, 
including the limitations, if any, on such information. Provided that 
the information set forth in the affidavit is true and complete, any 
objection by

[[Page 28093]]

the United States to information provided by Defendants, including any 
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 until one (1) 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, 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:
    (i) 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
    (ii) 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, 
including, but not limited to, any transitional supply and/or services 
agreements entered into between the Acquirer(s) and the Defendants 
pursuant to Section IV(H) of this Final Judgment.
    (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 shall not reacquire any part of the Divestiture Assets 
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 (10) years from the date of its entry.

XIV. Public Interest Determination

    The parties have complied with the requirements of the Antitrust 
Procedures and Penalties Act, 15 U.S.C. Sec.  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 those comments. Based upon the record before the Court, 
which includes the Competitive Impact Statement and any comments and 
responses 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.

-----------------------------------------------------------------------
United States District Judge

[FR Doc. 2011-11865 Filed 5-12-11; 8:45 am]
BILLING CODE 4410-11-P