[Federal Register Volume 87, Number 81 (Wednesday, April 27, 2022)]
[Notices]
[Pages 25017-25020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-09003]


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FEDERAL TRADE COMMISSION

[File No. 211 0131]


American Securities Partners/Ferro; Analysis of Agreement 
Containing Consent Orders To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement; request for comment.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of

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federal law prohibiting unfair methods of competition. The attached 
Analysis of Proposed Consent Orders to Aid Public Comment describes 
both the allegations in the complaint and the terms of the consent 
orders--embodied in the consent agreement--that would settle these 
allegations.

DATES: Comments must be received on or before May 27, 2022.

ADDRESSES: Interested parties may file comments online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Please write: ``American 
Securities Partners/Ferro; File No. 211 0131'' on your comment and file 
your comment online at https://www.regulations.gov by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, please mail your comment to the following address: Federal 
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, 
Suite CC-5610 (Annex D), Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Steven Wilensky (202-326-2650), Bureau 
of Competition, Federal Trade Commission, 400 7th Street SW, 
Washington, DC 20024.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis of Agreement Containing Consent Orders to Aid Public 
Comment describes the terms of the consent agreement and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC website at 
this web address: https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before May 23, 2022. 
Write ``American Securities Partners/Ferro; File No. 211 0131'' on your 
comment. Your comment--including your name and your state--will be 
placed on the public record of this proceeding, including, to the 
extent practicable, on the https://www.regulations.gov website.
    Due to protective actions in response to the COVID-19 pandemic and 
the agency's heightened security screening, postal mail addressed to 
the Commission will be delayed. We strongly encourage you to submit 
your comments online through the https://www.regulations.gov website.
    If you prefer to file your comment on paper, write ``American 
Securities Partners/Ferro; File No. 211 0131'' on your comment and on 
the envelope, and mail your comment to the following address: Federal 
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, 
Suite CC-5610 (Annex D), Washington, DC 20580.
    Because your comment will be placed on the publicly accessible 
website at https://www.regulations.gov, you are solely responsible for 
making sure your comment does not include any sensitive or confidential 
information. In particular, your comment should not include sensitive 
personal information, such as your or anyone else's Social Security 
number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure your comment does not include 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 
16 CFR 4.10(a)(2)--including competitively sensitive information such 
as costs, sales statistics, inventories, formulas, patterns, devices, 
manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on https://www.regulations.gov--as legally required by FTC 
Rule 4.9(b)--we cannot redact or remove your comment from that website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website at https://www.ftc.gov to read this Notice 
and the news release describing this matter. The FTC Act and other laws 
the Commission administers permit the collection of public comments to 
consider and use in this proceeding, as appropriate. The Commission 
will consider all timely and responsive public comments it receives on 
or before May 27, 2022. For information on the Commission's privacy 
policy, including routine uses permitted by the Privacy Act, see 
https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

I. Introduction

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from American Securities Partners VII, L.P. (``American 
Securities''), Prince International Corporation (``Prince''), and Ferro 
Corporation (``Ferro'') that is designed to remedy the anticompetitive 
effects resulting from Prince's acquisition of Ferro. Pursuant to an 
agreement dated May 11, 2021, American Securities proposes to acquire 
Ferro in a transaction valued at approximately $2.1 billion (the 
``Proposed Acquisition''). The Commission alleges in its Complaint that 
the Proposed Acquisition, if consummated, would violate Section 7 of 
the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal 
Trade Commission Act, as amended, 15 U.S.C. 45, by lessening 
competition in the following the markets: (1) Porcelain enamel frit; 
(2) glass enamel; and (3) forehearth colorants. The Consent Agreement 
will remedy the alleged violations by preserving the competition that 
otherwise would be eliminated by the Proposed Acquisition.
    Under the terms of the proposed Decision and Order (``Order''), 
Respondents are required to divest all of Prince's rights and assets 
related to the following three plants: (1) The porcelain enamel and 
forehearth colorants plant located in Leesburg, Alabama; (2) the 
porcelain enamel and forehearth colorants plant located in Bruges, 
Belgium; and (3) the glass enamel plant located in Cambiago, Italy. The 
Commission and Respondents have agreed to an Order to Maintain Assets 
that requires Respondents to operate and maintain each divestiture 
plant in the normal course of business until the

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products are ultimately divested. The Commission also issued the Order 
to Maintain Assets.
    The Consent Agreement has been placed on the public record for 
thirty days for receipt of comments from interested persons. Comments 
received during this period will become part of the public record. 
After thirty days, the Commission will again evaluate the Consent 
Agreement, along with the comments received, to make a final decision 
as to whether it should withdraw from the Consent Agreement, modify it, 
or make final the proposed Order.

II. The Respondents

    Respondent American Securities Partners VII, L.P. (``American 
Securities'') is a private equity firm headquartered in New York, New 
York. Respondent Prince International Corporation (``Prince'') is a 
wholly owned subsidiary of American Securities. Prince manufactures a 
variety of chemicals, minerals, and industrial additives, including 
porcelain enamel frit, glass enamel, and forehearth colorant. Prince is 
headquartered in Houston, Texas. Respondent Ferro Corporation 
(``Ferro'') manufactures a variety of functional coatings and color 
solutions, including porcelain enamel frit, glass enamel, and 
forehearth colorant. Ferro is headquartered in Mayfield, Ohio.

III. The Products and Structure of the Markets

    Porcelain enamel frit is a glass-based product used to create heat 
resistant, scratch and corrosion resistant coatings (porcelain enamel) 
for appliances, water heaters, cookware, and other applications. 
Porcelain enamel frit is necessary to make porcelain enamel coating. 
There are no good substitutes for porcelain enamel coating in the 
various applications in which it is used. Prince supplies its U.S. 
customers from a plant in Leesburg, Alabama while Ferro suppliers its 
U.S. customers from a plant in Villagran, Mexico. North America is the 
relevant geographic area in which to assess the competitive effects of 
the Proposed Acquisition in porcelain enamel frit. The North American 
market for porcelain enamel frit is highly concentrated. Respondents 
have a dominant combined share of sales of the overall North American 
market for porcelain enamel frit and an even higher share of the sales 
of the non-captive, merchant North American market for porcelain enamel 
frit. Almost all the porcelain enamel frit production capacity in North 
America outside of that owned by Respondents is possessed by 
competitors who use it internally and consequently little if any is 
sold to merchant customers.
    Glass enamel is a liquid paste or powder that is added to glass 
surfaces, such as appliance doors, architectural panels, and glass 
bottles, for aesthetic purposes, such as adding color or decoration; 
and to automotive windshields, for functional purposes, such as 
blocking UV light. There are no good substitutes for glass enamel in 
the various applications in which it is used. Prince supplies its U.S. 
customers from a plant in Cambiago, Italy while Ferro suppliers its 
U.S. customers from a plant in Villagran, Mexico. The world is the 
relevant geographic area in which to assess the competitive effects of 
the Proposed Acquisition in glass enamel. The world market for glass 
enamel is highly concentrated, with the two leading producers, Ferro 
and Fenzi Holdings SPV S.p.A (``Fenzi''), having a dominant combined 
market share. Prince is the third largest competitor.
    Forehearth colorants are glass-based powders added to the 
forehearths of glass furnaces during the manufacture of glass bottles 
to impart a specific color to bottles. There is no good substitute for 
forehearth colorants. Prince supplies its U.S. forehearth colorants 
customers from a plant in Bruges, Belgium and further processes the 
product at Leesburg, Alabama, while Ferro supplies its U.S. customers 
from a plant in Villagran, Mexico and further processes the product at 
Orrville, Ohio. The world is the relevant geographic area in which to 
assess the competitive effects of the Proposed Acquisition in 
forehearth colorants. The world market for forehearth colorants is 
highly concentrated. Ferro and Prince are the two largest producers of 
forehearth colorants in the world, with a dominant combined market 
share.

IV. Entry

    Entry into the three markets at issue would not be timely, likely, 
or sufficient in magnitude, character, and scope to deter or counteract 
the anticompetitive effects of the Proposed Acquisition. Constructing a 
new plant and acquiring approvals at customer accounts is costly and 
lengthy.

V. Competitive Effects

    The Proposed Acquisition will eliminate competition between Prince 
and Ferro and likely allow the merged firm to unilaterally increase the 
price in the North American market for porcelain enamel frit and in the 
world market for forehearth colorants. The Proposed Acquisition will 
eliminate Prince as an independent competitor in the world market for 
glass enamel. By removing Prince, the third large competitor in the 
world and the firm most likely to expand market share in the United 
States, the Proposed Acquisition decreases the likelihood of future 
price competition and increases the likelihood of coordination between 
the merged firm and its largest competitor, Fenzi.

VI. The Proposed Order and the Order To Maintain Assets

    The proposed Order and the Order to Maintain Assets effectively 
remedy the competitive concerns raised by the Proposed Acquisition for 
the three relevant products at issue. Pursuant to the proposed Order, 
the parties are required to divest Prince's rights and assets related 
to the three relevant products to KPS Capital Partners, L.P. (``KPS''). 
The parties must accomplish these divestitures no later than 10 days 
after Prince consummates the Proposed Acquisition. The proposed Order 
further allows the Commission to appoint a trustee in the event the 
parties fail to divest the products.
    The Commission's goal in evaluating possible purchasers of divested 
assets is to maintain the competitive environment that existed prior to 
the Proposed Acquisition. KPS is a capable purchaser with management 
and employees who have experience acquiring and improving industrial 
assets resulting from corporate carve-outs, including those resulting 
from U.S. Department of Justice and Federal Trade Commission consent 
decrees. It will be able to replicate the competition otherwise lost 
from the Proposed Acquisition.
    The proposed Order contains several provisions to help ensure that 
the divestitures are successful. The proposed Order requires Prince to 
provide transitional services to KPS to assist it in establishing its 
back-office capabilities.
    Under the proposed Order, the Commission also will appoint a 
Monitor to ensure that Prince complies with its obligations under the 
proposed Order and Order to Maintain Assets. The Commission has 
appointed Smith & Williamson as the Monitor. Smith & Williamson is a 
leading UK accountancy firm with over 1,800 UK employees and has 17 
years of experience acting as a monitor trustee. Smith & Williamson has 
prior monitoring experience in divestitures ordered by both the 
Commission and the European Commission (``EC''). The EC also has 
approved Smith & Williamson as the Monitor in this matter.

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    In addition to requiring plant divestitures, the proposed Order 
requires Respondent American Securities to obtain prior approval from 
the Commission before acquiring assets for the manufacture and sale of 
products in any of the three relevant markets for ten years. The prior 
approval provision is necessary because an acquisition of assets for 
the manufacture and sale of products in any of the three relevant 
markets likely would raise the same competitive concerns as the 
Acquisition. The proposed Order further requires KPS to obtain prior 
approval from the Commission for a period of three years before 
transferring any of the divested assets to any buyer, and for a period 
of seven additional years to any buyer with an interest in assets for 
the manufacture and sale of products in any of the three relevant 
markets.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement and proposed Order to aid the Commission in 
determining whether it should make the proposed Order final. This 
analysis is not an official interpretation of the proposed Order and 
does not modify its terms in any way.

    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2022-09003 Filed 4-26-22; 8:45 am]
BILLING CODE 6750-01-P