[Federal Register Volume 76, Number 210 (Monday, October 31, 2011)]
[Notices]
[Pages 67209-67224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28037]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Grupo Bimbo S.A.B. de C.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, 
Stipulation and Competitive Impact Statement have been filed with the 
United States District Court for the District of Columbia in United 
States of America v. Grupo Bimbo S.A.B. de C.V., et al., Civil Action 
No. 1:11-cv-01857. On October 21, 2011, the United States filed a 
Complaint alleging that the proposed acquisition by Grupo Bimbo S.A.B. 
de C.V. (``Grupo Bimbo'') and BBU, Inc. (collectively ``BBU'') of the 
North American Fresh Bakery business of Sara Lee Corporation (``Sara 
Lee'') would violate Section 7 of the Clayton Act, 15 U.S.C. 18. The 
proposed Final Judgment, filed the same time as the Complaint, requires 
BBU to divest certain brands of sliced bread and related assets to one 
or more acquirers approved by the United States.
    Copies of the Complaint, proposed Final Judgment and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth 
Street NW., Suite 1010, Washington, DC 20530 (telephone: (202) 514-
2481), on the Department of Justice's Web site at http://www.usdoj.gov/atr, and at the Office of the Clerk of the United States District Court 
for the District of Columbia. Copies of these materials may be obtained 
from the Antitrust Division upon request and payment of the copying fee 
set by Department of Justice regulations.
    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, 
Department of Justice,

[[Page 67210]]

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. Grupo Bimbo, S.A.B. de C.V., 
Prolongacion Paseo de la Reforma No. 1000, Col. Pena Blanca Santa Fe, 
Delegacon Alvaro Obregon, Mexico D.F., 01210 Mexico, BBU, INC., 225 
Business Center Drive, Horsham, Pennsylvania 19044, and Sara Lee 
Corporation, 3500 Lacey Road, Downers Grove, Illinois 60515, 
Defendants.

Case: 1:11-cv-01857.
Assigned To: Sullivan, Emmet G.
Assign Date: 10/21/2011.
Description: Antitrust.

Complaint

    The United States of America (``United States''), acting under the 
direction of the Attorney General of the United States, brings this 
civil action to enjoin the proposed acquisition of the North American 
Fresh Bakery business of Defendant Sara Lee Corporation (``Sara Lee'') 
by Defendants Grupo Bimbo S.A.B. de C.V. (``Grupo Bimbo'') and BBU, 
Inc. (collectively ``BBU''), and to obtain other equitable relief. The 
acquisition would likely substantially lessen competition in the market 
for sliced bread in eight relevant geographic markets in the United 
States, in violation of Section 7 of the Clayton Act, 15 U.S.C. 18, and 
result in higher prices for consumers of sliced bread in these markets. 
The United States alleges as follows:

I. Nature of the Action

    1. On November 9, 2010, BBU agreed to acquire the North American 
Fresh Bakery business of Sara Lee (by acquiring all of the shares of 
Sara Lee Bakery Group, Inc. and Sara Lee Vernon LLC).
    2. BBU and Sara Lee compete in the sale of sliced bread, which they 
sell under a variety of well-known brands. They are among the four 
largest sellers of sliced bread in the eight relevant geographic 
markets alleged below; in four of the relevant geographic markets, they 
are the two largest.
    3. BBU and Sara Lee compete aggressively with each other in the 
relevant markets. The head-to-head competition between the companies 
results in lower prices for consumers and improved service to 
retailers.
    4. As alleged in greater detail below, the proposed acquisition 
would substantially increase concentration among sellers of sliced 
bread in each of the relevant geographic markets and eliminate the 
substantial head-to-head competition between BBU and Sara Lee, likely 
leading to higher prices and reduced service, and substantially 
lessening competition in the sale of sliced bread in the relevant 
markets. Therefore, the proposed acquisition violates Section 7 of the 
Clayton Act.

II. Jurisdiction, Venue, and Interstate Commerce

    5. The United States brings this action pursuant to Section 15 of 
the Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain 
Defendants from violating Section 7 of the Clayton Act, 15 U.S.C. 18. 
The Court has subject-matter jurisdiction over this action pursuant to 
Section 15 of the Clayton Act, 15 U.S.C. 25, and 28 U.S.C. 1331, 
1337(a), and 1345.
    6. BBU and Sara Lee manufacture, market, and sell sliced bread and 
other consumer products in the flow of interstate commerce, and their 
production and sale of these products substantially affect interstate 
commerce. BBU and Sara Lee transact business and are found in the 
District of Columbia, through, among other things, the sale of consumer 
products to grocery stores in this District. Venue is proper in this 
District for Sara Lee and BBU, Inc. under Section 12 of the Clayton 
Act, 15 U.S.C. 22. Venue is proper in this District for Grupo Bimbo, a 
Mexican corporation, under 28 U.S.C. 1391(d).
    7. Defendants have consented to personal jurisdiction and venue in 
this judicial district.

III. The Defendants

    8. Grupo Bimbo is a corporation organized under the laws of Mexico, 
with headquarters in Mexico City. It controls BBU, Inc., a Delaware 
corporation headquartered in Horsham, Pennsylvania, through which Grupo 
Bimbo carries out its baking business in the United States, including 
but not limited to sliced bread. Grupo Bimbo had more than $8 billion 
in worldwide sales in 2009. In the same year, BBU's sales in the United 
States totaled approximately $3.9 billion. BBU sells sliced bread under 
a variety of national and regional brand names, including Bimbo, 
Arnold, Brownberry, Oroweat, Roman Meal, Freihofer's, Maier's, Mrs 
Baird's, Stroehmann, and Weber's. BBU also makes and sells Thomas' 
English muffins and Entenmann's sweet baked goods.
    9. Sara Lee is a corporation organized under the laws of Maryland, 
with headquarters in Downers Grove, Illinois. Sara Lee had more than 
$10 billion in worldwide revenues in fiscal 2010. That year, Sara Lee's 
North American Fresh Bakery division had approximately $2.1 billion in 
sales. Sara Lee sells sliced bread under a variety of brand names, 
including the ``Sara Lee'' brand family (including Sara Lee, Sara Lee 
Classic, Sara Lee Soft & Smooth, Sara Lee Hearty & Delicious, and Sara 
Lee Delightful), EarthGrains, and regional brands such as Milton's, 
Mother's, Grandma Sycamore's, Rainbo, San Luis Sourdough, Old Home, and 
Holsum.

IV. Relevant Markets

A. Relevant Product Market--Sliced Bread

    10. The relevant product market is no broader than sliced bread. 
``Sliced bread,'' as the term is used in the industry and in this 
Complaint, is fresh sliced and bagged loaf bread sold by supermarkets, 
mass merchandisers (such as Wal-Mart), club stores (such as Costco), 
other grocery stores, and convenience stores. For purposes of this 
Complaint, ``sliced bread'' does not include breakfast breads (such as 
raisin bread or cinnamon swirl), buns and rolls, bagels or English 
muffins, or products sold by in-store bakeries.
    11. There is substantial variety and differentiation among sliced-
bread products. Sliced breads vary in price, brand, flavor, texture, 
nutritional content, ingredients (e.g., the inclusion or exclusion of 
sweeteners or artificial ingredients), and other factors. Sliced breads 
range from traditional white bread to a wide variety of wheat and whole 
grain breads, rye, sourdough, and other varieties.
    12. Sliced breads also vary in shape. ``Traditional'' breads are 
baked in longer, narrower loaf pans and are often used as sandwich 
bread; ``wide pan'' breads are shorter and wider (and typically denser) 
than traditional breads. Traditional breads are often targeted to 
families with younger children. Wide pan breads are marketed as having 
greater nutritional value, and are typically sold at higher prices than 
traditional breads.
    13. Sliced breads include both branded products, which bear a brand 
owned by or licensed to the baker (such as BBU's Arnold or Sara Lee's 
EarthGrains), and private-label products, which bear a brand owned by 
the retailer (such as Wal-Mart's Great Value). Large baking companies, 
including BBU and Sara Lee, make and

[[Page 67211]]

sell both branded and private-label bread.
    14. Industry participants consider sliced breads to be a distinct 
set of products from other bakery products. Sliced bread sellers 
monitor the prices of competing sliced-bread products and set the 
prices of their sliced-bread products accordingly, and do not typically 
set sliced-bread prices based on prices of consumer products other than 
sliced bread.
    15. There are no adequate substitutes for sliced bread for most 
consumers. Most consumers purchase sliced bread to make sandwiches or 
toast, among other uses. Consumers are unlikely to substitute other 
bakery or food products for sliced bread for these and other uses. 
Therefore, a hypothetical monopolist producer of sliced bread would 
find it profitable to increase its prices by a small but significant 
and non-transitory amount. Accordingly, sliced bread is a relevant 
product market and a line of commerce within the meaning of Section 7 
of the Clayton Act.

B. Relevant Geographic Markets

    16. The metropolitan and surrounding areas of San Diego, Los 
Angeles, San Francisco and Sacramento, California; Kansas City, Kansas; 
Omaha, Nebraska; Oklahoma City, Oklahoma; and Harrisburg/Scranton, 
Pennsylvania, each are relevant geographic markets.
    17. The relevant geographic markets for analyzing the effects of 
this acquisition on competition are best defined by reference to the 
locations of the retailers that purchase sliced bread for sale to 
consumers, rather than by the location of bakeries. This approach to 
defining the relevant geographic markets is appropriate because bakers 
can price discriminate to their retailer customers based on location--
i.e., price differently to retailers in different locations based on 
local competitive conditions--and the retailers cannot defeat these 
price differences through arbitrage.
    18. Where sellers can successfully price discriminate based on 
customer location, the goal of geographic market definition is to 
identify the area encompassing the locations of potentially targeted 
customers. The relevant geographic markets identified above encompass 
the locations of retailers that could likely be targeted for price 
increases for sliced bread as a result of this transaction. For each of 
these geographic markets, the participants in each market are those 
sellers who currently sell sliced bread into that area, regardless of 
the location of the sellers' production facilities.
    19. Arbitrage across each of these geographic areas is unlikely to 
occur. Arbitrage would occur if a retailer in a higher-priced area were 
supplied with goods that had been sold to a retailer in a lower-priced 
area. Arbitrage of sliced bread between metropolitan areas is 
prohibitively costly because the retailer would incur substantial 
transportation costs to ship bread from another retailer to its store 
locations. In addition, arbitrage would be costly because it would 
require retailers to forego the ``direct store delivery'' (``DSD'') 
services provided by the bakery, which include delivering bread up to 
five times a week, stocking their shelves and displays, and removing 
stale or dated loaves.
    20. Accordingly, a hypothetical monopolist seller of sliced bread 
to retailers in each of the eight geographic areas identified in 
Paragraph 16 would find it profitable to increase its prices by a small 
but significant and non-transitory amount. Therefore, the geographic 
areas identified in Paragraph 16 are relevant geographic markets and 
``sections of the country'' within the meaning of Section 7 of the 
Clayton Act.

V. Likely Anticompetitive Effects

    21. Each of the relevant markets for sliced bread would be highly 
concentrated, and concentration would increase substantially in each of 
the relevant markets, as a result of the acquisition. Specifically,
    a. In San Diego, Defendants are the two largest sellers of sliced 
bread, with a combined market share of approximately 63 percent (in 
dollars).
    b. In Los Angeles, Defendants are the two largest sellers of sliced 
bread, with a combined market share of approximately 58 percent.
    c. In San Francisco, BBU is the largest seller of sliced bread, and 
Sara Lee is the third largest, with a combined market share of 
approximately 56 percent.
    d. In Sacramento, Defendants are the two largest sellers of sliced 
bread, with a combined market share of approximately 59 percent.
    e. In Kansas City, Sara Lee is the largest seller of sliced bread, 
and BBU is the third largest, with a combined market share of 
approximately 52 percent.
    f. In Omaha, Sara Lee is the largest seller of sliced bread, and 
BBU is the third largest, with a combined market share of approximately 
52 percent.
    g. In Oklahoma City, Sara Lee is the largest seller of sliced 
bread, and BBU is the fourth largest, with a combined market share of 
approximately 53 percent.
    h. In Harrisburg and Scranton, Defendants are the two largest 
sellers of sliced bread, with a combined market share of approximately 
56 percent.
    22. BBU and Sara Lee compete vigorously in the sale of sliced bread 
in the relevant geographic markets on price, promotions, variety, 
flavor, texture, shape, nutrition, and ingredients. They compete for 
retailers' business and for shelf and display space in retailers' 
stores by, among other things, offering lower wholesale prices and 
larger promotional discounts, which lower the prices paid by consumers 
of sliced bread.
    23. Consumers vary in their preferences for particular sliced bread 
products, and bakers and retailers offer a wide variety of sliced bread 
products to meet consumer preferences. Consumers consider many factors 
when choosing sliced-bread products, including brand, flavor, texture, 
nutritional content, shape, ingredients, and price. BBU and Sara Lee 
each make and sell a wide variety of sliced-bread products, under a 
portfolio of brands that have been developed over many years, to meet 
this diverse consumer demand.
    24. Bread brands convey information to consumers regarding quality, 
value, nutrition, and other attributes, and are an important factor in 
many consumers' buying decisions. Branded sliced breads typically sell 
at significantly higher prices than similar private-label sliced 
breads, indicating that many consumers value the qualities they 
associate with branded sliced breads.
    25. BBU's wide-pan variety breads, sold under the Oroweat and 
Arnold brands in the relevant markets, are similar in shape, flavor, 
texture, image, and price to Sara Lee's wide-pan variety breads sold 
under the Sara Lee Hearty & Delicious and EarthGrains brands in the 
relevant markets. Similarly, Sara Lee sells traditional soft white and 
wheat bread in the relevant markets under the Sara Lee Soft & Smooth 
brand and other brands, which are similar in shape, flavor, texture, 
image, and price to traditional soft white bread sold by BBU under the 
Bimbo, Mrs Baird's, Stroehmann, Freihofer's, Weber's, and other brands 
in the relevant markets.
    26. BBU and Sara Lee recognize that many of their sliced-bread 
products are close substitutes for each other's products, and a 
significant number of consumers in the relevant markets regard BBU and 
Sara Lee branded sliced-bread products as their first and second 
choices in sliced-bread products.
    27. The acquisition would eliminate the substantial head-to-head 
competition between BBU and Sara Lee

[[Page 67212]]

for sliced-bread sales to retailers and consumers, and allow BBU 
profitably to raise prices and decrease the services that it provides 
to retailers in the relevant markets.
    28. A price increase by BBU in a relevant market likely would 
result in the loss of substantial sales to Sara Lee, because, as 
previously alleged, a substantial number of consumers view BBU and Sara 
Lee breads as close substitutes. Prior to the acquisition, BBU would 
have lost the profits on the sales it loses to Sara Lee (and others) as 
a result of such a price increase. Following the acquisition, BBU would 
own the Sara Lee products, and would retain the profits that it would 
otherwise lose when consumers switch to Sara Lee products, in addition 
to earning higher profits on the sale of BBU products, which it would 
retain. Because those sales of Sara Lee products are likely profitable, 
a price increase by BBU would be profitable after the acquisition. The 
same profit motive would apply to an increase in the prices of Sara Lee 
bread, recaptured through sales of BBU bread. Therefore, BBU likely 
would unilaterally raise prices as a result of the acquisition.
    29. The significant increase in market concentration that the 
proposed acquisition would produce in the relevant markets, combined 
with the loss of head-to-head competition between BBU and Sara Lee, is 
likely to substantially lessen competition in violation of Section 7 of 
the Clayton Act, resulting in higher prices for retailers and consumers 
of sliced bread.

VI. Absence of Countervailing Factors

A. Entry

    30. Responses from competitors and new entry are unlikely to 
prevent the 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 sliced-bread products in retail outlets; (iii) the 
difficulty of securing shelf-space in retail outlets; (iv) the time and 
cost of building new bakeries and other facilities; and (v) the time 
and cost of developing delivery routes.

B. Efficiencies

    31. The proposed acquisition is unlikely to generate verifiable, 
merger-specific, cognizable efficiencies sufficient to reverse the 
likely competitive harm of the acquisition.

VII. Violation Alleged

    32. The United States hereby repeats and realleges the allegations 
of paragraphs 1 through 31 as if fully set forth herein.
    33. BBU's proposed acquisition of Sara Lee would likely 
substantially lessen competition in interstate trade and commerce, in 
violation of Section 7 of the Clayton Act, 15 U.S.C. 18, and would 
likely have the following effects, among others:
    (a) Actual and potential competition in the relevant markets 
between BBU and Sara Lee for sales of sliced bread would be eliminated; 
and
    (b) Competition generally in the relevant markets for sliced bread 
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. 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 Sara 
Lee would be acquired by, acquire, or merge with BBU;
    (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.

    Respectfully submitted,

    Dated: October 21, 2011.

    For Plaintiff United States:

/s/ Sharis A. Pozen
Sharis A. Pozen (DC Bar 446732),
Acting Assistant Attorney General for Antitrust.

/s/ Patricia A. Brink
PATRICIA A. BRINK
Director of Civil Enforcement.

/s/ Joshua H. Soven
JOSHUA H. SOVEN (DC Bar 436633)
Chief.

PETER J. MUCCHETTI (DC Bar 463202)
Assistant Chief, Litigation I Section.

/s/ Michelle Seltzer
Michelle Seltzer* (DC Bar 475482)
Attorney, Litigation I Section, Antitrust Division, U.S. Department 
of Justice, 450 Fifth Street NW., Suite 4100, Washington, DC 20530, 
Telephone: (202) 353-3865, Facsimile: (202) 307-5802, Email: 
[email protected].

Alvin Chu,
Barry Creech (DC Bar 421070),
Scott Fitzgerald,
Adam Gitlin,
Peter Gray,
David Gringer,
Ryan Kantor,
David Kelly,
Richard Liebeskind (DC Bar 479309),
Mark Merva (DC Bar 451743),
Julie Tenney,
Kevin Yeh,
Attorneys for the United States.

    *Attorney of Record.

United States District Court for the District of Columbia

United States of America, Plaintiff, v. Grupo Bimbo, S.A.B. de C.V., et 
al., Defendants.

Case: 1:11-cv-01857.
Assigned To: Sullivan, Emmet G.
Assign Date: 10/21/2011.
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. 16(b)-(h), files this Competitive Impact 
Statement relating to the proposed Final Judgment submitted for entry 
in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    The United States filed a civil antitrust Complaint on October 21, 
2011, seeking to enjoin the proposed acquisition of the North American 
Fresh Bakery business of Defendant Sara Lee Corporation (``Sara Lee'') 
by Defendants Grupo Bimbo S.A.B. de C.V. (``Grupo Bimbo'') and BBU, 
Inc. (collectively ``BBU''), alleging that the acquisition likely would 
substantially lessen competition in the market for sliced bread in 
eight relevant geographic markets in the United States, in violation of 
Section 7 of the Clayton Act, 15 U.S.C. 18. The loss of competition 
caused by the acquisition likely would result in higher prices for 
consumers of sliced bread in those markets.
    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 will substantially eliminate the anticompetitive 
effects that would result from the acquisition. Under the proposed 
Final Judgment, which is explained more fully below, BBU is required to 
divest certain brands of sliced bread and related assets to one or more 
acquirers approved by the United States, in the markets where 
anticompetitive effects are likely. Under the Hold Separate, BBU and 
Sara Lee 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

[[Page 67213]]

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 by the Court 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 Proposed Acquisition

    Defendant BBU is the largest sliced-bread baker and seller in the 
United States, operating 33 bakeries, 21 transportation depots, and 
more than 7,000 sales routes.\1\ In 2009, BBU's sales in the United 
States totaled approximately $3.9 billion. BBU owns many of the major 
brand names in the sliced-bread industry, including Bimbo, Arnold, 
Brownberry, Oroweat, Mrs Baird's, Stroehmann, Freihofer, and Weber's.
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    \1\ Defendant Grupo Bimbo, a Mexican corporation headquartered 
in Mexico City, operates in the United States through its subsidiary 
BBU, Inc.
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    Defendant Sara Lee's North American Fresh Bakery division is the 
third largest sliced-bread producer in the United States. Sara Lee 
operates 41 bakeries and approximately 4,800 sales routes in the United 
States. In fiscal year 2010, Sara Lee's North American Fresh Bakery 
division had $2.1 billion in sales. The majority of Sara Lee's bread 
sales are made under brands in the ``Sara Lee'' brand family, but Sara 
Lee also has substantial sales under its EarthGrains brand and various 
regional brands, including Milton's, Mother's, Grandma Sycamore's, 
Rainbo, San Luis Sourdough, Old Home, and Holsum.
    On or about November 9, 2010, BBU entered into an agreement to 
acquire Sara Lee's North American bread-baking business by acquiring 
all of the shares of Sara Lee Bakery Group, Inc. and Sara Lee Vernon 
LLC (the ``Acquisition'').

B. Relevant Markets

1. The Relevant Product Market Is No Broader Than Sliced Bread
    The Complaint alleges that the relevant product market is no 
broader than sliced bread. Sliced bread is fresh sliced and bagged loaf 
bread sold by supermarkets, mass merchandisers (such as Wal-Mart), club 
stores (such as Costco), other grocery stores, and convenience stores. 
There is substantial variety and differentiation among sliced-bread 
products. Sliced breads vary in price, brand, flavor, texture, 
nutritional content, ingredients (e.g., the inclusion or exclusion of 
sweeteners or artificial ingredients), and other factors. Sliced breads 
range from traditional white bread to a wide variety of wheat and whole 
grain breads, rye, sourdough, and other varieties.
    Sliced breads also vary in shape. ``Traditional'' breads are baked 
in longer, narrower loaf pans and often used as sandwich bread. ``Wide 
pan'' breads are shorter and wider (and typically denser) than 
traditional breads. Traditional breads are often targeted to families 
with younger children. Wide-pan breads are marketed as having greater 
nutritional value, and are typically sold at higher prices than 
traditional breads.
    Sliced breads include branded products, which bear a brand owned by 
or licensed to the baker (such as BBU's Arnold or Sara Lee's 
EarthGrains), and private-label products, which bear a brand owned by 
the retailer (such as Wal-Mart's Great Value). Most large baking 
companies, including BBU and Sara Lee, make and sell branded and 
private-label bread.
    There are no adequate substitutes for sliced bread for most 
consumers. Most consumers purchase sliced bread to make sandwiches or 
toast, among other uses, and are unlikely to substitute other bakery or 
food products for sliced bread for these and other uses. Therefore, a 
hypothetical monopolist producer of sliced bread would find it 
profitable to increase its prices by a small but significant and non-
transitory amount. Accordingly, sliced bread is a relevant product 
market and a line of commerce within the meaning of Section 7 of the 
Clayton Act.
2. The Relevant Geographic Markets Are Local
    The Complaint alleges that the San Francisco, San Diego, 
Sacramento, Los Angeles, Harrisburg/Scranton, Kansas City, Kansas, 
Omaha, and Oklahoma City metropolitan and surrounding areas each 
constitute relevant geographic markets for the sale of sliced bread. 
Each geographic market is defined with respect to the location of 
customers (e.g., grocery stores), rather than the location of 
manufacturers (i.e., bakeries), because, as the Complaint alleges, 
sliced-bread suppliers can price discriminate across local geographic 
markets.
    The appropriateness of defining the geographic market as a price-
discrimination market based on the location of the customers is 
explained in the 2010 Horizontal Merger Guidelines issued by the U.S. 
Department of Justice and the Federal Trade Commission. Under the 
Guidelines analysis, ``[f]or price discrimination to be feasible, two 
conditions typically must be met: differential pricing and limited 
arbitrage.'' U.S. Dept. of Justice & FTC, Horizontal Merger Guidelines 
3 (2010) (hereinafter ``Horizontal Merger Guidelines''). If these 
conditions are met, ``a hypothetical profit-maximizing firm that was 
the only present or future seller of the relevant product(s) to 
customers in the region would impose at least a [small price increase] 
on some customers in the specified region.'' Horizontal Merger 
Guidelines 4.2.2. So long as this price increase would not be defeated 
by arbitrage, the targeted region constitutes a relevant geographic 
market. Id.
    Sliced-bread suppliers can charge different prices for the same 
product (net of transportation costs) in different metropolitan areas. 
Sliced-bread suppliers compete for retailers' business and for shelf 
and display space in retailers' stores by, among other things, offering 
lower wholesale list prices and larger promotional discounts, which 
lower the prices paid by consumers of sliced bread. List prices and 
promotional activity are regularly determined after a consideration of 
the competitive conditions in a particular geographic area. Even with 
larger retailers that have a national or regional footprint, there are 
different pricing and promotional strategies that are influenced by the 
degree of competition in a particular area.
    Geographic price discrimination by sliced-bread suppliers is 
possible because the cost of arbitrage is prohibitively expensive. 
Arbitrage would occur if a retailer in a higher-priced area were 
supplied with goods previously sold to a retailer in a lower-priced 
area. Arbitrage of sliced bread between metropolitan areas is very 
costly because the retailer would incur substantial transportation 
costs to ship bread from another retailer to its store locations. In 
addition, arbitrage would require retailers to forego the ``direct 
store delivery'' (``DSD'') services provided by the bread manufacturer, 
which include delivering bread to their stores up to five times a week, 
stocking their shelves and displays, and removing stale or dated 
loaves. Accordingly, arbitrage of sliced bread is unlikely to occur or 
to eliminate disparities in wholesale prices between metropolitan 
areas. Therefore, a hypothetical monopolist seller of sliced bread to 
retailers in each of the geographic areas identified above would find 
it profitable to increase its prices by

[[Page 67214]]

a small but significant and non-transitory amount. Therefore, the eight 
geographic areas identified in the Complaint are relevant geographic 
markets and ``sections of the country'' within the meaning of Section 7 
of the Clayton Act.

C. The Acquisition Is Likely To Substantially Lessen Competition in the 
Sale of Sliced Bread in Each of the Relevant Geographic Markets

    The Complaint alleges that the Acquisition is likely to 
substantially lessen competition in the sale of sliced bread in the 
relevant geographic markets. The Acquisition would result in the 
relevant markets being highly concentrated, giving BBU a dominant share 
of the sliced bread market. In San Diego, BBU would have 63 percent of 
the sliced bread market; in Sacramento 59 percent; in Los Angeles 58 
percent; in San Francisco 56 percent; in Omaha 52 percent; in Oklahoma 
City 53 percent; in Kansas City 52 percent; and in Harrisburg/Scranton 
56 percent.\2\
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    \2\ All of the market shares in the following paragraphs are 
rounded off to the nearest percentage point. As a consequence, the 
post-Acquisition market share of BBU need not be exactly equal to 
the sum of the pre-Acquisition shares of the BBU brands and the Sara 
Lee brands minus the pre-Acquisition share attributable to the 
divested brands.
---------------------------------------------------------------------------

    In addition, BBU and Sara Lee are among each other's most important 
competitors in the relevant markets, and in some relevant markets are 
particularly close competitors within certain market segments, such as 
wide-pan and traditional sliced bread. The Defendants regularly set 
prices and offer promotions in response to competition from each other, 
or to win market share from each other. Consumers benefit from this 
competition in the form of lower prices, innovative and healthier 
products, and a greater variety of choices of sliced-bread products. As 
discussed below, new entry is unlikely to eliminate the Acquisition's 
anticompetitive effects.
1. The Loss of Competition Between the Defendants in the Relevant 
Geographic Markets Is Likely To Lead to Post-Acquisition Price 
Increases
    For a substantial number of consumers in the relevant markets, BBU 
and Sara Lee branded sliced-bread products are close substitutes. BBU's 
wide-pan variety breads, sold under the Oroweat and Arnold brands in 
the relevant markets, are similar in shape, flavor, texture, image, and 
price to Sara Lee's wide-pan variety breads sold under the Sara Lee 
Hearty & Delicious and EarthGrains brands in the relevant geographic 
markets. Similarly, Sara Lee sells traditional soft white and wheat 
bread in the relevant markets under the Sara Lee Soft & Smooth brand 
and other brands, which are similar in shape, flavor, texture, image, 
and price to traditional soft white bread sold by BBU under the Bimbo, 
Mrs Baird's, Stroehmann, Freihofer's, Weber's, and other brands in the 
relevant geographic markets. BBU and Sara Lee recognize that many of 
their sliced-bread products are close substitutes for each other's 
products, and they engage in substantial head-to-head competition for 
sales of these substitute products.
    The loss of the head-to-head competition between the Defendants is 
likely to produce unilateral anticompetitive effects. See Horizontal 
Merger Guidelines 6.0. Because a substantial number of consumers view 
BBU and Sara Lee breads as closest substitutes, BBU is likely to 
increase prices post-transaction. Prior to the Acquisition, a price 
increase by BBU in a relevant market likely would result in the loss of 
substantial sales to Sara Lee. BBU would have lost the profits on the 
sales it loses to Sara Lee (and others) as a result of the price 
increase. Following the Acquisition, however, BBU would own the Sara 
Lee products, and would retain the profits that it would otherwise lose 
when consumers switch to Sara Lee products, in addition to earning 
higher profits on the sale of BBU products, which it would retain. 
Because those sales of Sara Lee products likely are profitable, a price 
increase by BBU likely would be profitable after the Acquisition. The 
same profit motive would apply to an increase in the prices of Sara Lee 
bread, recaptured through sales of BBU bread. Therefore, BBU likely 
would raise prices unilaterally as a result of the Acquisition.
    For a unilateral price increase to be profitable, the brands at 
issue need not be the closest substitutes for all consumers. 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.'' 
Horizontal Merger Guidelines Sec.  6.1. All that is required is that a 
significant proportion of customers regard the breads as their first 
and second choices. Id. The Complaint alleges that this condition is 
met in each of the relevant geographic markets with respect to the BBU 
and Sara Lee brands.
2. Entry Is Unlikely To Prevent the Acquisition's Anticompetitive 
Effects
    The Complaint alleges that entry by new firms is not likely to 
prevent the Acquisition's anticompetitive effects. Entry by new firms 
will not prevent an acquisition's anticompetitive effects unless that 
entry is likely to occur in a timely manner and is sufficient to deter 
those anticompetitive effects. Horizontal Merger Guidelines Sec.  9.
    Entry into the sliced-bread business is unlikely to prevent 
anticompetitive effects because there are substantial barriers to entry 
in a timely manner. First, a well-established brand is crucial to the 
sale of sliced bread, and developing that brand equity is difficult and 
time-consuming. Consumers are reluctant to try new brands unless they 
are heavily promoted through advertising and especially aggressive 
pricing. In addition, constructing a new bakery is time-consuming. From 
the time a decision to build a new bakery is made, it can take six 
months to acquire the land; construction can then take 12 to 18 months.
    Nor is it likely that any existing competitors in the relevant 
markets would expand their output or reposition their products to 
constrain a price increase by the leading firms. The other competitors 
either lack sufficient brand equity, or their production capacity 
serving the relevant markets is too small to constrain a post-merger 
price increase.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment requires significant divestitures that 
will preserve competition in the market for sliced bread. Within 90 
calendar days after filing of the Complaint (subject to up to two 30-
day extensions) or five calendar days after entry of a Final Judgment 
by the Court, whichever is later, the Defendants are required to divest 
a perpetual, royalty-free, assignable, transferable, exclusive license 
to use the following 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 manufacture and sale of sliced bread in 
each geographic market. To prevent the splitting of a divested brand 
between BBU and the acquirer within a relevant market, in most 
instances the proposed Final Judgment provides that for each brand of 
sliced bread required to be divested, the divestiture will include 
additional fresh bread products sold under that brand, i.e., buns, 
rolls, sandwich thins, thin buns, etc.
    In Los Angeles, San Diego, San Francisco, and Sacramento, 
California, the Defendants are required to divest the

[[Page 67215]]

Sara Lee family of brands (which includes Sara Lee, Sara Lee Classic, 
Sara Lee Soft & Smooth, Sara Lee Hearty & Delicious, and Sara Lee 
Delightful) and the EarthGrains brand. In Harrisburg/Scranton, 
Pennsylvania, the Defendants are required to divest the Holsum and 
Milano brands. In Kansas City, Kansas, the Defendants are required to 
divest the EarthGrains and Mrs Baird's brands. In Omaha, Nebraska, the 
Defendants are required to divest the EarthGrains and Healthy Choice 
brands. In Oklahoma City, Oklahoma, the Defendants are required to 
divest the EarthGrains brand. These divestitures target the loss of 
competition between BBU and Sara Lee in each particular market and will 
prevent or significantly reduce the increase in concentration that the 
transaction would otherwise produce in the relevant markets.
     In Los Angeles, BBU brands currently account for 41 
percent of the sliced bread market and Sara Lee brands currently 
account for 18 percent. The divestiture in Los Angeles of EarthGrains 
and the Sara Lee family brands, which together account for 17 percent 
of the sliced-bread market, will reduce the merged firm's post-
Acquisition market share to 41 percent.
     In San Diego, BBU brands currently account for 46 percent 
of the sliced-bread market and Sara Lee brands currently account for 17 
percent. The divestiture in San Diego of EarthGrains and the Sara Lee 
family of brands, which together account for 15 percent of the sliced-
bread market, will reduce the merged firm's post-Acquisition market 
share to 48 percent.
     In San Francisco, BBU brands currently account for 44 
percent of the sliced-bread market and Sara Lee brands currently 
account for 12 percent. The divestiture in San Francisco of EarthGrains 
and the Sara Lee family of brands, which together account for 8 percent 
of the sliced-bread market, will reduce the merged firm's post-
Acquisition market share to 47 percent.
     In Sacramento, BBU brands currently account for 34 percent 
of the sliced-bread market and Sara Lee brands currently account for 25 
percent. The divestiture in Sacramento of EarthGrains and the Sara Lee 
family of brands, which together account for 15 percent of the sliced-
bread market, will reduce the merged firm's post-Acquisition market 
share to 44 percent.
     In Kansas City, BBU brands currently account for 17 
percent of the sliced-bread market and Sara Lee brands currently 
account for 35 percent. The divestiture in Kansas City of EarthGrains 
and Mrs Baird's, which together account for 9 percent of the sliced-
bread market, will reduce the merged firm's post-Acquisition market 
share to 43 percent.
     In Omaha, BBU brands currently account for 14 percent of 
the sliced-bread market and Sara Lee brands currently account for 38 
percent. The divestiture in Omaha of EarthGrains and Healthy Choice, 
which together account for 5 percent of the sliced-bread market, will 
reduce the merged firm's post-Acquisition market share to 47 percent.
     In Oklahoma City, BBU brands currently account for 7 
percent of the sliced-bread market and Sara Lee brands currently 
account for 46 percent. The divestiture in Oklahoma City of 
EarthGrains, which accounts for 6 percent of the sliced-bread market, 
will reduce the merged firm's post-Acquisition market share to 47 
percent.
     In Harrisburg/Scranton, BBU brands currently account for 
44 percent of the sliced-bread market and Sara Lee brands currently 
account for 12 percent. The divestiture in Harrisburg/Scranton of 
Holsum and Milano, which together account for 8 percent of the sliced-
bread market, will reduce the merged firm's post-Acquisition market 
share to 49 percent.
    The United States' analysis of the proposed Acquisition indicates 
that the acquisition of all of the Sara Lee brands of sliced bread in 
each of these eight geographic areas would have created an incentive 
for BBU to raise prices on BBU and Sara Lee brands of sliced bread 
because, in the event of a price increase, a significant portion of the 
lost sales from either the BBU or the Sara Lee portfolio of brands 
would be diverted to the other. In each geographic area, the 
divestiture, by separating the ownership of several closely competing 
brands, prevents the Acquisition from creating any significant 
incentive for the merged firm to raise the price of sliced bread.
    In addition, as stated above, without the required divestitures, 
the Acquisition would have created substantial increases in the merged 
firm's sliced-bread market share in multiple geographic markets. The 
divestitures reduce those increases to no more than 4 percentage points 
in all but three markets: Sacramento (10 points), Omaha (9 points), and 
Kansas City (9 points). These incremental share gains in these three 
geographic markets do not pose substantial competitive concerns because 
they will result from the combination of brands that are largely in 
different segments of the sliced-bread market--i.e., combining 
traditional breads and wide pan breads. Combining ownership of brands 
that consumers consider to be relatively distant substitutes for each 
other is less likely to raise competitive concerns than combining 
closer substitutes. The required divestitures mandate the sale of the 
Defendants' brands that most closely and directly compete in order to 
preserve competition in the segments of the market where they are very 
close substitutes for each other.
    In Sacramento, the Sara Lee brands required to be divested are 
those that compete strongly with BBU brands. The Sara Lee brands that 
BBU will retain, in particular Rainbo, San Luis Sourdough, and Old 
Home, do not compete as directly with BBU brands, and thus present BBU 
with little incentive to increase prices post-Acquisition. In Omaha, 
BBU and Sara Lee primarily compete in the sale of wide-pan bread. BBU 
is not a significant competitor in Omaha in the traditional bread 
segment. Although wide-pan bread is a small part of the overall sliced-
bread market, the divestiture of the EarthGrains and Healthy Choice 
brands protects the competition in this segment that the Acquisition 
would otherwise have reduced. The increased market share that BBU will 
retain in Omaha after the divestiture largely comes from BBU's 
acquisition of Sara Lee's traditional bread products, which is unlikely 
to reduce competition because BBU has not been a significant competitor 
in the sale of traditional bread in the Omaha metropolitan area.
    In Kansas City, BBU and Sara Lee compete in both the traditional 
and wide-pan segments. The required divesture of BBU's traditional Mrs 
Baird's brand and Sara Lee's wide-pan EarthGrains brand targets 
competition in each of these segments. The small increase in market 
share of sliced bread that BBU likely will retain after the 
divestitures in Kansas City largely comes from combining BBU's wide-pan 
bread brands with Sara Lee's traditional bread brands, which is 
unlikely to create a significant competitive concern.
    In addition to a perpetual, royalty-free, assignable, transferable, 
exclusive license to use the particular brands of sliced bread, the 
proposed Final Judgment requires with respect to each relevant 
geographic market the divestiture of related tangible assets, including 
records, customer information, and other assets related to the divested 
brands. It also requires the divestiture of related intangible assets, 
including the rights to trade dress, trademarks, trade secrets, and 
other intellectual property used in the research, development, 
production, marketing, servicing, distribution, or sale of the brands 
being divested.
    In addition, effective divestitures probably will require the sale 
of

[[Page 67216]]

manufacturing plants and equipment used primarily to manufacture the 
divested brands, as well as distribution facilities, routes, route 
assets, and other tangible assets used in connection with those 
manufacturing plants. Accordingly, the proposed Final Judgment requires 
the divestiture of brand-related plants and plant-related assets, but 
it also provides that the Defendants need not divest those assets in 
the event that (1) the acquirer does not want those assets, and (2) the 
United States determines in its sole discretion that a divestiture of 
some or all of such assets is not reasonably necessary to enable the 
acquirer to replace the competition that otherwise would have been lost 
pursuant to the Acquisition.
    The proposed Final Judgment provides that there will be a single 
acquirer of all brands and brand-related assets required to be divested 
in California, and that there may be different acquirers in different 
relevant markets outside of California. As stated above, to prevent the 
splitting of a divested brand between BBU and the acquirer within a 
relevant market, in most instances the proposed Final Judgment provides 
that for each brand of sliced bread required to be divested, the 
divestiture will include additional fresh-bread products sold under 
that brand, i.e., buns, rolls, sandwich thins, thin buns, etc.
    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 or acquirers can and will use the assets 
as part of a viable, ongoing business engaged in the sale of sliced 
bread in the metropolitan and surrounding areas of Los Angeles, San 
Diego, San Francisco, Sacramento, Harrisburg, Scranton, Kansas City, 
Kansas, Omaha, and Oklahoma City.
    Section V of the proposed Final Judgment provides that if 
Defendants do not accomplish the ordered divestitures within the 
prescribed time period, 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 to maximize 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.
    The proposed Final Judgment provides that if a trustee is 
appointed, the trustee may make the ordered divestitures in California 
to different acquirers, so long as the United States is satisfied that 
the California divestiture assets will remain viable and the 
divestiture of such assets will remedy the competitive harm alleged in 
the Complaint.
    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.
    The proposed Final Judgment also provides that the United States 
may appoint a monitoring trustee to ensure that Defendants 
expeditiously comply with all of their obligations and perform all of 
their responsibilities under the Final Judgment and the Hold Separate 
and to ensure that the divestiture assets remain economically viable, 
competitive, and ongoing assets, and that competition in the sale of 
sliced bread in the relevant markets is maintained until the required 
divestitures have been accomplished. The monitoring trustee shall serve 
at the cost and expense of Defendants, on customary and reasonable 
terms and conditions agreed to by the monitoring trustee and the United 
States.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in Federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against Defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States, BBU, and Sara Lee 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 BBU's acquisition of Sara Lee's North American Fresh 
Bakery business. The United States is satisfied, however, that 
divestiture of the assets described in the proposed Final Judgment will 
preserve competition for the sale of sliced bread in the relevant 
geographic markets. 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.

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

[[Page 67217]]

the United States be subject to a sixty-day comment period, after which 
the court shall determine whether entry of the proposed Final Judgment 
``is in the public interest.'' 15 U.S.C. 16(e)(1). In making that 
determination, the court, in accordance with the statute as amended in 
2004, is required to consider:

    (A) the competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

15 U.S.C. 16(e)(1)(A) & (B).

    In considering these statutory factors, the court's inquiry is 
necessarily a limited one as the government is entitled to ``broad 
discretion to settle with the defendant within the reaches of the 
public interest.'' United States v. Microsoft Corp., 56 F.3d 1448, 1461 
(DC 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.'').\3\
---------------------------------------------------------------------------

    \3\ 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. 
16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns, 
489 F. Supp. 2d at 11 (concluding that the 2004 amendments 
``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------

    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 
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). Instead:

[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).\4\ 
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'').
---------------------------------------------------------------------------

    \4\ 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. 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

[[Page 67218]]

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.\5\
---------------------------------------------------------------------------

    \5\ 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: October 21, 2011.

    Respectfully submitted,

/s/Michelle Seltzer
Michelle Seltzer (DC Bar 475482),

David Gringer,
Attorneys, Litigation I Section, Antitrust Division, U.S. Department 
of Justice, 450 Fifth Street, NW., Suite 4100, Washington, DC 20530, 
Telephone: (202) 353-3865, Facsimile: (202) 307-5802, Email: 
[email protected].

United States District Court for the District of Columbia

United States of America, Plaintiff, v. Grupo Bimbo, S.A.B. de C.V., et 
al., Defendants

Case No.:
Judge:

[Proposed] Final Judgment

    Whereas, Plaintiff United States of America filed its Complaint on 
October 21, 2011, and plaintiff and defendants Grupo Bimbo S.A.B. de 
C.V. (``Grupo Bimbo''), BBU, Inc. (``BBU'') and Sara Lee Corporation 
(``Sara Lee'') (collectively ``Defendants''), by their respective 
attorneys, have consented to the entry of this Final Judgment without 
trial or adjudication of any issue of fact or law, and without this 
Final Judgment constituting any evidence against or admission by any 
party regarding any issue of fact or law;
    And whereas, Defendants have agreed to be bound by the provisions 
of this Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights and assets by Defendants to 
assure that competition is not substantially lessened;
    And whereas, the United States requires Defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And whereas, Defendants have represented to the United States that 
the divestitures required below can and will be made and that 
Defendants will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the divestiture 
provisions contained below;
    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged, and decreed:

I. Jurisdiction

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

II. Definitions

    As used in this Final Judgment:
    (A) ``Acquirer'' means the person or persons to whom Defendants 
divest all or any portion of the Divestiture Assets.
    (B) ``BBU'' means Defendant BBU, Inc., a Delaware corporation with 
its headquarters in Horsham, Pennsylvania, its successors and assigns, 
and its subsidiaries, divisions, groups, affiliates, partnerships and 
joint ventures, and their directors, officers, managers, agents, and 
employees.
    (C) ``California Area'' means the state of California.
    (D) ``California Assets'' means:
    (1) A perpetual, royalty-free, assignable, transferable, exclusive 
license (or, in the case of rights licensed from third parties or Sara 
Lee, a sublicense or assignment thereof) to use, manufacture (or have 
manufactured for the Acquirer), distribute, market, promote, advertise, 
and sell Fresh Bread under the California Brands in the California 
Area, including the right to manufacture Fresh Bread under the 
California Brands outside of the California Area for sale exclusively 
in the California Area, subject to any preexisting limitations on Sara 
Lee's authority to engage in such actions in the California Area;
    (2) All plants and equipment used by Sara Lee to manufacture Fresh 
Bread under the California Brands for sale in the California Area (at 
the locations identified herein), and all trucks and other vehicles, 
depots, and warehouses utilized by Sara Lee or its agents in the 
distribution and sale of Fresh Bread under the California Brands in the 
California Area, provided, however, that the United States may approve 
a package of fewer of the assets identified in this subparagraph (2) 
based on a determination, in its sole discretion, that such a smaller 
package is sufficient to maintain current levels of competition for the 
manufacturing, distribution, and sale of Fresh Bread in the California 
Area;
    (3) All route books, customer lists, and other records used in the 
Defendants' sale of Fresh Bread under the California Brands in the 
California Area, provided that copies may be provided if such assets 
cannot be separated from what Defendants require for the retained 
business;
    (4) All Other Assets used in the research, development, 
manufacturing, production, distribution, marketing, promotion, 
advertising, or sale of Fresh Bread under the California Brands in the 
California Area; and
    (5) The Sara Lee Fresh Bread production facilities located at (a) 
160 L Street, Fresno, California, 93721; (b) 955 Kennedy Street, 
Oakland, California, 94606; (c) 3211 6th Avenue, Sacramento, 
California, 95817; and (d) 2651 South Airport Way, Stockton, 
California, 95206. The California Assets specifically exclude the Sara 
Lee Fresh Bread production facility located at 5200 South Alameda, 
Vernon, California, 90058.
    (E) ``California Brands'' means the EarthGrains, Sara Lee, Sara Lee 
Classic, Sara Lee Soft & Smooth, Sara Lee Hearty & Delicious, and Sara 
Lee Delightful brands for Fresh Bread in the California Area and any 
other related Trade Dress used in connection with the sale of Fresh 
Bread in the California Area.
    (F) ``Central Pennsylvania Area'' means Adams, Berks, Carbon, 
Columbia, Cumberland, Dauphin, Franklin, Fulton, Huntingdon, Juniata, 
Lackawanna, Lancaster, Lebanon, Lehigh, Luzerne, Mifflin, Monroe, 
Montour, Northampton, Northumberland, Perry, Pike, Schuylkill, Snyder, 
Sullivan, Susquehanna, Union, Wayne, Wyoming, and York Counties in the 
commonwealth of Pennsylvania.
    (G) ``Central Pennsylvania Assets'' means:

[[Page 67219]]

    (1) A perpetual, royalty-free, assignable, transferable, exclusive 
license (or, in the case of rights licensed from third parties or Sara 
Lee, a sublicense or assignment thereof) to use, manufacture (or have 
manufactured for the Acquirer), distribute, market, promote, advertise, 
and sell Fresh Bread under the Central Pennsylvania Brands in the 
Central Pennsylvania Area, including the right to manufacture Fresh 
Bread under the Central Pennsylvania Brands outside of the Central 
Pennsylvania Area for sale exclusively in the Central Pennsylvania 
Area, subject to any preexisting limitations on Sara Lee's authority to 
engage in such actions in the Central Pennsylvania Area;
    (2) all plants and equipment used by Sara Lee to manufacture Fresh 
Bread under the Central Pennsylvania Brands for sale in the Central 
Pennsylvania Area (at the locations identified herein), and all trucks 
and other vehicles, depots, and warehouses utilized by Sara Lee or its 
agents in the distribution and sale of Fresh Bread under the Central 
Pennsylvania Brands in the Central Pennsylvania Area, provided, 
however, that the United States may approve a package of fewer of the 
assets identified in this subparagraph (2) based on a determination, in 
its sole discretion, that such a smaller package is sufficient to 
maintain current levels of competition for the manufacturing, 
distribution, and sale of Fresh Bread in the Central Pennsylvania Area;
    (3) all route books, customer lists, and other records used in the 
Defendants' sale of Fresh Bread under the Central Pennsylvania Brands 
in the Central Pennsylvania Area, provided that copies may be provided 
if such assets cannot be separated from what Defendants require for the 
retained business;
    (4) all Other Assets used in the research, development, 
manufacturing, production, distribution, marketing, promotion, 
advertising, or sale of Fresh Bread under the Central Pennsylvania 
Brands in the Central Pennsylvania Area; and
    (5) the Sara Lee Fresh Bread production facilities located at (a) 
500 Hanover Street, Northumberland, Pennsylvania, 17857; and (b) 249 
North 11th Street, Sunbury, Pennsylvania, 17801.
    (H) ``Central Pennsylvania Brands'' means the Holsum and Milano 
brands for Fresh Bread in the Central Pennsylvania Area, and any other 
related Trade Dress used in connection with the sale of Fresh Bread in 
the Central Pennsylvania Area.
    (I) ``Central Region Area'' means the Kansas City Area, the Omaha 
Area, and the Oklahoma City Area.
    (J) ``Central Region Assets'' means:
    (1) A perpetual, royalty-free, assignable, transferable, exclusive 
license (or, in the case of rights licensed from third parties or Sara 
Lee, a sublicense or assignment thereof) to use, manufacture (or have 
manufactured for the Acquirer), distribute, market, promote, advertise, 
and sell Fresh Bread under the Central Region Brands in the Central 
Region Area, including the right to manufacture Fresh Bread under the 
Central Region Brands outside of the Central Region Area for sale 
exclusively in the Central Region Area, subject to any preexisting 
limitations on Defendants' authority to engage in such actions in the 
Central Region Area;
    (2) all plants and equipment used by Sara Lee to manufacture Fresh 
Bread under the Central Region Brands for sale in the Central Region 
Area (at the locations identified herein), and all trucks and other 
vehicles, depots, and warehouses utilized by Sara Lee or its agents in 
the distribution and sale of Fresh Bread under the Central Region 
Brands in the Central Region Area, provided, however, that the United 
States may approve a package of fewer of the assets identified in this 
subparagraph (2) based on a determination, in its sole discretion, that 
such a smaller package is sufficient to maintain current levels of 
competition for the manufacturing, distribution, and sale of Fresh 
Bread in the Central Region Area;
    (3) all route books, customer lists, and other records used in the 
Defendants' sale of Fresh Bread under the Central Region Brands in the 
Central Region Area, provided that copies may be provided if such 
assets cannot be separated from what Defendants require for the 
retained business;
    (4) all Other Assets used in the research, development, 
manufacturing, production, distribution, marketing, promotion, 
advertising, or sale of Fresh Bread under the Central Region Brands in 
the Central Region Area; and
    (5) the Sara Lee Fresh Bread production facilities located at (a) 
317 South Elm Street, Hastings, Nebraska, 68901; (b) 221 North Chapel 
Hill Road, Sioux Falls, South Dakota, 57103; (c) 2630 Southeast Drive, 
Wichita, Kansas, 67216; and (d) 1916 North Broadway, Oklahoma City, 
Oklahoma, 73103. The Central Region Assets specifically exclude the 
Sara Lee bread production facilities located at (i) 415 South Mill 
Street, Fergus Falls, Minnesota, 56537; (ii) 3723 South Dakota Avenue, 
South Sioux City, Nebraska, 68776; and (iii) 1500 North US Highway 75, 
Sioux City, Iowa, 51102.
    (K) ``Central Region Brands'' means:
    (1) The EarthGrains and Mrs Baird's brands for Fresh Bread in the 
Kansas City Area, and any other related Trade Dress used in connection 
with the sale of Fresh Bread in the Kansas City Area;
    (2) the EarthGrains and, as licensed by Defendants, Healthy Choice 
brands for Fresh Bread in the Omaha Area, and any other related Trade 
Dress used in connection with the sale of Fresh Bread in the Omaha 
Area; and
    (3) the EarthGrains brand for Fresh Bread in the Oklahoma City 
Area, and any other related Trade Dress used in connection with the 
sale of Fresh Bread in the Oklahoma City Area.
    (L) ``Divestiture Assets'' means the California Assets, the Central 
Pennsylvania Assets, and the Central Region Assets.
    (M) ``Divestiture Trustee'' means the trustee selected by the 
United States and appointed by the Court pursuant to Section V of this 
Final Judgment.
    (N) ``Formulas'' mean all of Defendants' formulas, recipes, and 
specifications used by a Defendant in connection with the production 
and packaging associated with the goods manufactured, distributed, 
marketed, and sold under a brand name, including, without limitation, 
ingredients, manufacturing processes, equipment and material 
specifications, trade and manufacturing secrets, know-how, and 
scientific and technical information.
    (O) ``Fresh Bread,'' for purposes of this Final Judgment, means for 
the Central Pennsylvania Brands and the Central Region Brands, fresh, 
bagged, sliced bread, and items sold as bagged buns, rolls, sandwich 
thins, thin buns, bagels, English muffins, flat bread sold as 
traditional pita bread, and other fresh bread products sold under each 
Relevant Brand in the Central Pennsylvania Area and the Central Region 
Area. For the purposes of this Final Judgment, ``Fresh Bread'' for the 
California Area means fresh, bagged, sliced bread, and items sold as 
bagged buns, rolls, sandwich thins, thin buns, and other fresh bread 
products sold under the California Brands in the California Area, and 
excludes English muffins, bagels, and flat bread sold as traditional 
pita bread.
    (P) ``Grupo Bimbo'' means Defendant Grupo Bimbo S.A.B. de C.V., a 
corporation organized under the laws of Mexico, with its headquarters 
in Mexico City, Mexico, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships and joint

[[Page 67220]]

ventures, and their directors, officers, managers, agents, and 
employees.
    (Q) ``Kansas City Area'' means Johnson, Leavenworth, Miami, and 
Wyandotte Counties in the state of Kansas, and Cass, Clay, Jackson, 
Lafayette, Platte, and Ray Counties in the state of Missouri.
    (R) ``Licensed Trademarks'' means all trademarks or service marks 
belonging or licensed to Defendants (whether registered or 
unregistered, or whether the subject of a pending application) that 
consist of, or incorporate, a Relevant Brand.
    (S) ``Monitoring Trustee'' means any monitor appointed by the 
United States pursuant to Section IX of this Final Judgment.
    (T) ``Oklahoma City Area'' means Canadian, Cleveland, Logan, 
McClain, Oklahoma, and Pottawatomie Counties in the state of Oklahoma.
    (U) ``Omaha Area'' means Pottawattamie County in the state of Iowa, 
and Cass, Douglas, Lancaster, Sarpy, Saunders, and Washington Counties 
in the state of Nebraska.
    (V) ``Other Assets'' means, with respect to each Relevant Brand:
    (1) All tangible assets (other than plants and equipment) primarily 
used in the research, development, manufacturing, production, 
distribution, marketing, promotion, advertising, or sale of any Fresh 
Bread product sold under a Relevant Brand in its Relevant Area, 
including but not limited to copies of customer lists and route maps; 
copies of accounts, credit records and related customer information; 
product inventory; packaging and copies of artwork relating to such 
packaging; and copies of all performance records and all other records, 
provided, however, that Defendants may retain the portions of such 
tangible assets that relate to products other than any Fresh Bread 
product sold under a Relevant Brand in its Relevant Area where such 
assets reasonably can be divided, or may provide copies of such assets 
where it is reasonable to do so; and
    (2) All of the following intangible assets:
    (a) All licenses, permits, or authorizations issued by any 
governmental organization, contracts (including route contracts), 
teaming arrangements, agreements, leases, commitments, certifications, 
and understandings, including agreements with suppliers, distributors, 
independent operators, wholesalers, retailers, marketers, unions, 
employees, or advertisers used primarily in the research, development, 
manufacturing, production, distribution, marketing, promotion, 
advertising, or sale of any Fresh Bread product sold under a Relevant 
Brand in its Relevant Area;
    (b) A non-exclusive, transferable, royalty-free license or 
sublicense to all not-previously-identified intellectual property used 
in the research, development, manufacturing, production, distribution, 
marketing, promotion, advertising, servicing, or sale of any Fresh 
Bread product under a Relevant Brand in its Relevant Area, including 
but not limited to any patents, licenses and sublicenses, copyrights, 
Licensed Trademarks (excluding trademarks other than the Licensed 
Trademarks), and trade secrets; and
    (c) all technical information, computer software, route 
configurations, and related documentation, know-how, and Formulas, 
including information relating to plans for, improvement to, or line 
extensions of, Fresh Bread products sold or distributed primarily under 
a Relevant Brand in its Relevant Area; all research, packaging, 
distribution, marketing, advertising, and sales know-how and 
documentation, including marketing and sales data, packaging designs, 
quality assurance and control procedures; all associated manuals and 
technical information that Defendants provide to their 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 or experiments primarily related 
to the Relevant Brands in the Relevant Areas, and the results of 
successful and unsuccessful designs and experiments, provided that with 
respect to any intangible assets identified in subparagraphs (a), (b), 
and (c) herein that, prior to the merger, were being used in the 
research, development, production, distribution, marketing, promotion, 
advertising, servicing, or sale of any Fresh Bread product distributed 
or sold under a Relevant Brand in a Relevant Area and any product or 
other asset not being divested, Defendants may utilize and retain the 
portions of such intangible assets that relate solely to products other 
than any Fresh Bread product distributed or sold under a Relevant Brand 
in a Relevant Area where such assets reasonably can be divided, and may 
provide copies of such intangible assets that relate to both any Fresh 
Bread sold or distributed under a Relevant Brand in a Relevant Area and 
any other product or asset not being divested if such assets cannot be 
separated from what Defendants require for the retained business.
    (W) ``Relevant Areas'' means the California, Central Pennsylvania, 
and Central Region Areas.
    (X) ``Relevant Brands'' means the California Brands, the Central 
Pennsylvania Brands, and the Central Region Brands.
    (Y) ``Sara Lee'' means Defendant Sara Lee Corporation, a Maryland 
corporation with its headquarters in Downers Grove, Illinois, its 
successors and assigns (other than Grupo Bimbo and BBU), and its 
subsidiaries, divisions, groups, affiliates, partnerships, and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    (Z) ``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.

III. Applicability

    (A) This Final Judgment applies to each Defendant and all persons 
in active concert or participation with any Defendant who receives 
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 dispose of all or 
substantially all of their assets or of lesser business units that 
include the Divestiture Assets, 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) Grupo Bimbo and BBU are ordered and directed, within ninety 
(90) calendar days after the filing of the Complaint in this matter or 
five (5) calendar days after notice of 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 up to two thirty (30) day 
extensions of this time period, 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.

[[Page 67221]]

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 no later than five (5) business days after such 
information is made available to any prospective Acquirer.
    (C) Subject to the execution of customary confidentiality 
agreements, Defendants shall provide prospective Acquirers and the 
United States with information relating to the personnel (including 
independent operators) directly involved in the operation and sale 
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 
Defendant's employee or independent operator whose responsibility 
relates to the Divestiture Assets.
    (D) Subject to the execution of customary confidentiality 
agreements, Defendants shall permit prospective Acquirers of the 
Divestiture Assets to (1) have reasonable access to personnel; (2) make 
inspections of the physical facilities; (3) have access to any and all 
environmental, zoning, and other permit documents and information; and 
(4) have access to any and all financial, operational, or other 
documents and information customarily provided as part of a due 
diligence process.
    (E) Grupo Bimbo and BBU shall warrant to the Acquirer(s) that the 
Divestiture Assets will be operational on the date of sale.
    (F) Defendants shall not take any action that will impede in any 
way the licensing, permitting, operation, or divestiture of the 
Divestiture Assets.
    (G) Grupo Bimbo and BBU shall warrant to the Acquirer(s) that there 
are no material defects in the environmental, zoning, or other permits 
pertaining to the operation of each asset, and that following the sale 
of the Divestiture Assets, Defendants will not undertake, directly or 
indirectly, any challenges to the environmental, zoning, or other 
permits relating to the operation of the Divestiture Assets.
    (H) In connection with the divestiture of the Divestiture Assets 
pursuant to Section IV, or by Divestiture Trustee appointed pursuant to 
Section V, of this Final Judgment, at the option of the Acquirer(s), 
Grupo Bimbo and BBU shall enter into transitional supply and 
transportation agreements, up to six (6) months in length, for the 
supply and transportation of Fresh Bread under the Relevant Brands in 
the Relevant Areas. 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 transitional supply and transportation agreements 
must be acceptable to the United States in its sole discretion. All 
such agreements shall be deemed incorporated into this Final Judgment, 
and a failure by Grupo Bimbo or BBU to comply with any terms of such an 
agreement shall constitute a failure to comply with this Final 
Judgment. Upon the expiration or termination of such agreements, Grupo 
Bimbo and BBU shall not enter into or have any supply or transportation 
agreements with the Acquirer(s) relating to the sale of Fresh Bread 
under the Relevant Brands in the Relevant Areas 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 the Divestiture 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 Relevant Brands can and will be used by the Acquirer(s) as part of 
viable, ongoing businesses engaged in the sale of Fresh Bread. 
Divestiture of the California Assets by Defendants pursuant to Section 
IV of the Final Judgment shall be made to a single Acquirer. 
Divestiture of the Central Region Assets and Central Pennsylvania 
Assets pursuant to Section IV (by Defendants) or Section V (by the 
Divestiture Trustee) of the Final Judgment, and divestiture of the 
California Assets by the Divestiture Trustee pursuant to Section V of 
the Final Judgment, 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:
    (1) 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 Fresh Bread; and
    (2) shall be accomplished so as to satisfy the United States, in 
its sole discretion, that none of the terms of any agreement between an 
Acquirer and Defendants give Defendants the ability unreasonably to 
raise the Acquirer's costs, to lower the Acquirer's efficiency, or 
otherwise to interfere in the ability of the Acquirer to compete 
effectively.
    (J) During the term of this Final Judgment, Defendants shall not 
sell or introduce for sale any Fresh Bread under a Relevant Brand in 
its Relevant Area, and Defendants shall not use the Sara Lee trade name 
for co-branding of any Fresh Bread product sold in the California Area.

V. Appointment of Divestiture Trustee

    (A) If BBU and Grupo Bimbo have not divested the California Assets, 
the Central Pennsylvania Assets, and the Central Region Assets within 
the time period specified in paragraph IV(A), Grupo Bimbo and BBU shall 
notify the United States of that fact in writing. Upon application of 
the United States, the Court shall appoint a Divestiture Trustee 
selected by the United States and approved by the Court to effect the 
divestiture of the not-yet-divested Divestiture Assets (the ``remaining 
Divestiture Assets'').
    (B) After the appointment of a Divestiture Trustee becomes 
effective, only the Divestiture Trustee shall have the right to sell 
the remaining Divestiture Assets. The Divestiture 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 Divestiture 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 paragraph V(D) of this Final Judgment, the 
Divestiture Trustee may hire at the cost and expense of Grupo Bimbo and 
BBU any investment bankers, attorneys, or other agents, who shall be 
solely accountable to the Divestiture Trustee and who shall be required 
to execute customary confidentiality agreements, reasonably necessary 
in the Divestiture Trustee's judgment to assist in the divestiture.
    (C) Defendants shall not object to a sale by the Divestiture 
Trustee on any

[[Page 67222]]

ground other than the Divestiture Trustee's malfeasance. Any such 
objections by Defendants must be conveyed in writing to the United 
States and the Divestiture Trustee within ten (10) calendar days after 
the Divestiture Trustee has provided the notice required under Section 
VI.
    (D) The Divestiture Trustee shall serve at the cost and expense of 
Grupo Bimbo and BBU, 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 Divestiture Trustee and all costs and expenses so 
incurred. After approval by the Court of the Divestiture Trustee's 
accounting, including fees for its services and those of any 
professionals and agents retained by the Divestiture Trustee, all 
remaining money shall be paid to Grupo Bimbo or BBU and the trust shall 
then be terminated. The compensation of the Divestiture Trustee and any 
professionals and agents retained by the Divestiture Trustee shall be 
reasonable in light of the value of the remaining Divestiture Assets 
and based on a fee arrangement providing the Divestiture 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 
Divestiture Trustee in accomplishing the required divestiture. The 
Divestiture Trustee and any consultants, accountants, attorneys, and 
other persons retained by the Divestiture Trustee shall have full and 
complete access to the personnel, books, records, and facilities of the 
remaining Divestiture Assets, and Defendants shall develop financial 
and other information relevant to the remaining Divestiture Assets as 
the Divestiture 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 Divestiture Trustee's accomplishment 
of the divestiture.
    (F) After its appointment, the Divestiture Trustee shall file 
monthly reports with the United States and the Court setting forth the 
Divestiture Trustee's efforts to accomplish the divestiture ordered 
under this Final Judgment. To the extent such reports contain 
information that the Divestiture 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 remaining Divestiture Assets, and shall describe in 
detail each contact with any such person. The Divestiture Trustee shall 
maintain full records of all efforts made to divest the remaining 
Divestiture Assets.
    (G) If the Divestiture Trustee has not accomplished the divestiture 
ordered under this Final Judgment within six (6) months after its 
appointment, the Divestiture Trustee shall promptly file with the Court 
a report setting forth (1) the Divestiture Trustee's efforts to 
accomplish the required divestiture, (2) the reasons, in the 
Divestiture Trustee's judgment, why the required divestiture has not 
been accomplished, and (3) the Divestiture Trustee's recommendations. 
To the extent the report contains information that the Divestiture 
Trustee deems confidential, the report shall not be filed in the public 
docket of the Court. The Divestiture 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 this Final Judgment, which may, 
if necessary, include extending the trust and the term of the 
Divestiture 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, Grupo Bimbo and BBU or the 
Divestiture 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 Divestiture Trustee is responsible, it shall similarly 
notify Grupo Bimbo and BBU. 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 Divestiture 
Trustee, if applicable, additional information concerning the proposed 
divestiture, the proposed Acquirer(s), and any other potential 
Acquirer. Defendants and the Divestiture 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 Divestiture Trustee, 
whichever is later, the United States shall provide written notice to 
Defendants and the Divestiture 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 paragraph 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 paragraph 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 (the ``Hold Separate'') entered 
by this Court. Defendants shall take no action that would jeopardize 
the divestiture ordered by this Court.

IX. Appointment of Monitoring Trustee

    (A) Upon the filing of this Final Judgment, the United States may, 
in its sole discretion, appoint a Monitoring Trustee, subject to 
approval by the Court.
    (B) The Monitoring Trustee shall have the power and authority to 
monitor Defendants' compliance with the terms of this Final Judgment 
and the Hold Separate entered by this Court and shall have such powers 
as this Court deems appropriate. Subject to Paragraph IX(D) of this 
Final Judgment, the Monitoring Trustee may hire any consultants, 
accountants, attorneys, or other persons,

[[Page 67223]]

who shall be solely accountable to the Monitoring Trustee, reasonably 
necessary in the Monitoring Trustee's judgment.
    (C) Defendants shall not object to actions taken by the Monitoring 
Trustee in fulfillment of the Monitoring Trustee's responsibilities 
under any Order of this Court on any ground other than the Monitoring 
Trustee's malfeasance. Any such objections by Defendants must be 
conveyed in writing to the United States and the Monitoring Trustee 
within ten (10) calendar days after the action taken by the Monitoring 
Trustee giving rise to the Defendants' objection.
    (D) The Monitoring Trustee and any consultants, accountants, 
attorneys, and other persons retained by the Monitoring Trustee shall 
serve, without bond or other security, at the cost and expense of 
Defendants, on such terms and conditions as the United States approves, 
including the execution of customary confidentiality agreements. The 
compensation of the Monitoring Trustee and any consultants, 
accountants, attorneys, and other persons retained by the Monitoring 
Trustee shall be on reasonable and customary terms commensurate with 
the individuals' experience and responsibilities.
    (E) The Monitoring Trustee shall have no responsibility or 
obligation for the operation of Defendants' businesses.
    (F) Defendants shall assist the Monitoring Trustee in monitoring 
Defendants' compliance with their individual obligations under this 
Final Judgment and under the Hold Separate. The Monitoring Trustee and 
any consultants, accountants, attorneys, and other persons retained by 
the Monitoring Trustee shall have full and complete access to the 
personnel, books, records, and facilities relating to the Divestiture 
Assets, subject to reasonable protection for trade secret or other 
confidential research, development, or commercial information or any 
applicable privileges. Defendants shall take no action to interfere 
with or to impede the Monitoring Trustee's accomplishment of its 
responsibilities.
    (G) After its appointment, the Monitoring Trustee shall file 
monthly reports with the United States and the Court setting forth the 
Defendants' efforts to comply with their individual obligations under 
this Final Judgment and under the Hold Separate. To the extent such 
reports contain information that the Monitoring Trustee deems 
confidential, such reports shall not be filed in the public docket of 
the Court.
    (H) The Monitoring Trustee shall serve until the divestiture of all 
of the Divestiture Assets is finalized pursuant to either Section IV or 
Section V of this Final Judgment and any agreement(s) for transitional 
supply and transportation services described in Paragraph IV(H) of this 
Final Judgment have expired.
    (I) If the United States determines that the Monitoring Trustee has 
ceased to act or failed to act diligently, the United States may 
appoint a substitute Monitoring Trustee in the same manner as provided 
in this Section.
    (J) The Monitoring Trustee appointed pursuant to this Final 
Judgment may be the same person or entity appointed as a Divestiture 
Trustee pursuant to Section V of this Final Judgment.

X. 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 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.
    (D) Sara Lee's obligations under paragraphs A and B of this Section 
shall cease upon completion of its sale to Grupo Bimbo and BBU of the 
Sara Lee business that includes the Divestiture Assets.

XI. 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:
    (1) Access during Defendants' office hours to inspect and copy, or 
at the option of the United States, to require Defendants to provide 
hard copy or electronic copies of, all books, ledgers, accounts, 
records, data, and documents in the possession, custody, or control of 
Defendants, relating to any matters contained in this Final Judgment; 
and
    (2) to interview, either informally or on the record, Defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by Defendants.
    (B) Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
Defendants shall submit written reports or responses to written 
interrogatories, under oath if requested, relating to any of the 
matters contained in this Final Judgment as may be requested, 
including, but not limited to, any transitional supply and/or 
transportation agreements entered into between the Acquirer(s) and the 
Defendants pursuant to paragraph 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

[[Page 67224]]

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).

XII. No Reacquisition

    Defendants shall not reacquire any part of the Divestiture Assets 
during the term of this Final Judgment.

XIII. 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.

XIV. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten (10) years from the date of its entry.

XV. Public Interest Determination

    The parties have complied with the requirements of the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16, including making copies 
available to the public of this Final Judgment, the Competitive Impact 
Statement, and any comments thereon and the United States's responses 
to 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. 16.
-----------------------------------------------------------------------
United States District Judge.

[FR Doc. 2011-28037 Filed 10-28-11; 8:45 am]
BILLING CODE 4410-11-P