Notice2022-09003
American Securities Partners/Ferro; Analysis of Agreement Containing Consent Orders To Aid Public Comment
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Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 27, 2022
Issuing agencies
Federal Trade Commission
Abstract
The consent agreement in this matter settles alleged violations of 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.
Full Text
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<title>Federal Register, Volume 87 Issue 81 (Wednesday, April 27, 2022)</title>
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[Federal Register Volume 87, Number 81 (Wednesday, April 27, 2022)]
[Notices]
[Pages 25017-25020]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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
[[Page 25018]]
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 <a href="https://www.regulations.gov">https://www.regulations.gov</a> 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: <a href="https://www.ftc.gov/news-events/commission-actions">https://www.ftc.gov/news-events/commission-actions</a>.
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 <a href="https://www.regulations.gov">https://www.regulations.gov</a> 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a> 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>, 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>--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 <a href="https://www.ftc.gov">https://www.ftc.gov</a> 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
<a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
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
[[Page 25019]]
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.
[[Page 25020]]
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
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</html>Indexed from Federal Register on April 27, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.