Notice2025-12329
United States v. Safran S.A., et al.; Proposed Final Judgment and Competitive Impact Statement
Primary source
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Published
July 2, 2025
Issuing agencies
Justice DepartmentAntitrust Division
Full Text
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[Federal Register Volume 90, Number 125 (Wednesday, July 2, 2025)]
[Notices]
[Pages 29033-29047]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-12329]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Safran S.A., 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. Safran S.A., et al., Civil Action No. 1:25-cv-
01897. On June 17, 2025, the United States filed a Complaint alleging
that Safran S.A.'s proposed acquisition of Collins Aerospace's
actuation and flight control business from RTX Corporation would
violate Section 7 of the Clayton Act, 15 U.S.C. 18. The proposed Final
Judgment, filed at the same time as the Complaint, requires Safran.
S.A. to divest its North American actuation business, including THSAs
and secondary flight control actuators, and its Canada-based electronic
control units.
Copies of the Complaint, proposed Final Judgment, and Competitive
Impact Statement are available for inspection on the Antitrust
Division's website at <a href="http://www.justice.gov/atr">http://www.justice.gov/atr</a> and at the Office of
the Clerk of the United States District Court for the District of
Columbia. Copies of these materials may be obtained from the Antitrust
Division upon request and payment of the copying fee set by Department
of Justice regulations.
[[Page 29034]]
Public comment is invited within 60 days of the date of this
notice. Such comments, including the name of the submitter, and
responses thereto, will be posted on the Antitrust Division's website,
filed with the Court, and, under certain circumstances, published in
the Federal Register. Comments should be submitted in English and
directed to Soyoung Choe, Acting Chief, Defense, Industrials, and
Aerospace Section, Antitrust Division, Department of Justice, 450 Fifth
Street NW, Suite 8700, Washington, DC 20530 (email address: <a href="/cdn-cgi/l/email-protection#d0918482fe949991fd99beb6bfa2bdb1a4b9bfbe90a5a3b4bfbafeb7bfa6"><span class="__cf_email__" data-cfemail="f9b8adabd7bdb0b8d4b0979f968b94988d909697b98c8a9d9693d79e968f">[email protected]</span></a>).
Suzanne Morris,
Deputy Director of Civil Enforcement Operations, Antitrust Division.
United States District Court for the District Of Columbia
United States of America, 450 Fifth Street NW, Washington, DC
20530 Plaintiff, v. Safran, S.A. 2, bd du General Martial-Valin
Paris, France 75015, Safran, USA, INC., 700 South Washington Street,
Suite 250, Alexandria, VA 22314, and RTX Corporation, 1000 Wilson
Blvd, Arlington, VA 22209 Defendants.
No. 1:25-cv-01897-CRC
Judge: Christopher R. Cooper
Complaint
Safran S.A., Safran USA, Inc. (combined ``Safran'') and RTX
Corporation (``RTX'') are two of the leading suppliers in the worldwide
market for trimmable horizontal stabilizer actuators (``THSAs'') for
large aircraft and are significant direct competitors. Safran's
proposed acquisition of RTX's business related to THSAs threatens to
substantially lessen competition in violation of Section 7 of the
Clayton Act, 15 U.S.C. 18. The proposed transaction should, therefore,
be enjoined.
I. Nature of the Action
1. Pursuant to an asset purchase agreement dated July 20, 2023,
Safran proposes to acquire certain assets from RTX's Collins Aerospace
business comprising Collins Aerospace's flight control and actuation
business, which produces THSAs for large aircraft. The transaction is
valued at approximately $1.8 billion.
2. THSAs help an aircraft maintain the proper altitude during
flight and are critical to the safe operation of the aircraft. The
proposed acquisition would eliminate competition between Safran and RTX
in the market for THSAs for large aircraft.
3. As a result, the proposed acquisition likely would substantially
lessen competition in the worldwide market for the development,
manufacture, and sale of THSAs for large aircraft in violation of
Section 7 of the Clayton Act, 15 U.S.C. 18.
II. The Defendants
4. Safran S.A. is incorporated in France and has its headquarters
in Paris, France. Safran produces a wide range of products for the
aerospace industry and other industries, including THSAs for large
aircraft. Safran USA, Inc. is a US-based subsidiary of Safran S.A.,
headquartered in Alexandria, Virginia. In 2024, Safran had revenues of
approximately [euro]27 billion.
5. RTX is incorporated in Delaware and is headquartered in
Arlington, Virginia. RTX is a major provider of aerospace and defense
electronics systems. RTX produces, among other products, THSAs for
large aircraft. In 2024, RTX had revenues of approximately $80 billion.
III. Prior Divestiture iN UTC-Rockwell Collins
6. On October 1, 2018, the Antitrust Division entered a consent
decree requiring United Technologies Corporation (``UTC'') to divest
two businesses critical to the safe operation of aircraft to resolve
competitive concerns raised by UTC's acquisition of Rockwell Collins,
Inc. (``Rockwell Collins''). One of the divesture businesses identified
in the decree was Rockwell Collins's THSA business. Because of the
safety critical nature of THSAs, it was imperative that the divesture
buyer have an established presence in the aerospace industry with well-
established customer relationships. Ultimately, the Antitrust Division
approved Safran as the divestiture buyer and since that time Safran has
operated the divested business as a competitor in the market for THSAs.
7. In April of 2020, following UTC's acquisition of Rockwell
Collins, UTC merged with Raytheon Company, forming the company now
branded as RTX. Safran's proposed acquisition of RTX would recombine
the THSA assets that were divested to resolve the Division's concerns
with the UTC-Rockwell Collins transaction.
IV. Jurisdiction and Venue
8. The United States brings this action under Section 15 of the
Clayton Act, 15 U.S.C. 25, as amended, to prevent and restrain
Defendants from violating Section 7 of the Clayton Act, 15 U.S.C. 18.
9. Defendants develop, manufacture, and sell THSAs for large
aircraft in the flow of interstate commerce. Defendants' activities in
the development, manufacture, and sale of these products substantially
affect interstate commerce. This 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.
10. Defendants have consented to venue and personal jurisdiction in
this judicial district. Venue is therefore proper in this district
under Section 12 of the Clayton Act, 15 U.S.C. 22 and 28 U.S.C. 1391(b)
and (c).
V. Trimmable Horizontal Stabilizer Actuators for Large Aircraft
A. Background
11. Actuators are responsible for the proper positions of an
aircraft by manipulating the ``control surfaces'' on its wings and tail
section. A THSA is a type of actuator and helps an aircraft maintain
the proper altitude during flight by adjusting (``trimming'') the angle
of the horizontal stabilizer, the control surface of the aircraft's
tail responsible for aircraft pitch. This control surface is critical
to the safety and performance of the aircraft, as a loss of control
could cause the aircraft to crash. The stabilizer encounters
significant aerodynamic loads for extended periods of time, and the
THSA must be capable of handling these loads. THSAs thus tend to be the
largest and most technically demanding actuators on an aircraft.
12. THSAs vary in size, complexity, and cost based on the size and
type of aircraft on which they are used. Because large aircraft
encounter significantly higher aerodynamic loads than smaller aircraft,
THSAs for large aircraft are considerably larger, more complex, and
more expensive than those used on smaller aircraft. Large aircraft
primarily include commercial aircraft that seat at least six passengers
abreast (such as the Airbus A320 and A350 and the Boeing 737, 787 and
777x) and military transport aircraft, but exclude regional aircraft,
business jets, and tactical military aircraft.
13. THSAs can also vary in the type of power source used to effect
actuation. Actuation can be effected using an electric or hydraulic
source of control. Typically, an aircraft uses only one type so that
all actuation on the aircraft, including THSAs, is controlled by either
electric or hydraulic means. At the design phase, large aircraft
manufacturers can choose either type of power source to control
actuation. Once a plane is designed, manufacturers are unable to switch
between electric or hydraulic actuation components, including THSAs,
due in part to the
[[Page 29035]]
certification required for these components.
B. Relevant Markets
1. Product Market
14. THSAs for large aircraft do not have technical substitutes.
Large aircraft manufacturers cannot switch to THSAs for smaller
aircraft, or actuators for other aircraft control surfaces, because
those products cannot adequately control the lift and manage the load
generated by the horizontal stabilizer of a large aircraft. A small but
significant increase in the price or worsening of terms of THSAs for
large aircraft would not cause aircraft manufacturers to substitute
THSAs designed for smaller aircraft or actuators for other control
surfaces in volumes sufficient to make such a price increase
unprofitable. Accordingly, THSAs for large aircraft are a line of
commerce and a relevant product market within the meaning of Section 7
of the Clayton Act, 15 U.S.C. 18.
2. Geographic Market
15. The relevant geographic market within the meaning of Section 7
of the Clayton Act, 15 U.S.C. 18 is worldwide. THSAs for large aircraft
are marketed internationally and may be sourced from suppliers globally
because transportation costs are a small proportion of the cost of the
product and thus are not a major factor in supplier selection.
C. Anticompetitive Effects of the Proposed Acquisition
16. Safran and RTX are two of the leading suppliers in the
worldwide market for the development, manufacture, and sale of THSAs
for large aircraft. Safran and RTX have respectively won two of the
most significant recent contract awards for THSAs for large aircraft:
the Boeing 777X and the Airbus A350. Boeing and Airbus are the world's
largest manufacturers of passenger aircraft, and these aircraft
represent two of only three THSA awards by these manufacturers in this
century.
17. Other producers of THSAs tend to concentrate on THSAs for
smaller aircraft, such as business jets or regional aircraft, or to
focus on products for other aircraft control surfaces.
18. Safran and RTX view each other as a significant competitive
threat for the development, manufacture, and sale of THSAs worldwide
for large aircraft. The two companies are among the few that have
demonstrated expertise in designing and producing THSAs for large
aircraft. Each firm considers the other company's offering when
planning bids.
19. Customers have benefitted from the competition between Safran
and RTX for the development, manufacture, and sale of THSAs worldwide
for large aircraft. Competition between two of the leading suppliers of
a product results in more favorable contractual terms, more innovative
products, and shorter delivery times. The combination of Safran and
certain assets from RTX's Collins Aerospace business would eliminate
this competition and its future benefits to customers. Post-
acquisition, Safran likely would have the incentive and the ability to
increase prices profitably and offer less favorable contractual terms.
20. Safran and RTX also invest significantly to remain leading
suppliers for the development, manufacture, and sale of THSAs worldwide
for large aircraft, and aircraft manufacturers expect them to remain
leading suppliers of new products in the future. The combination of
Safran and certain assets from RTX's Collins Aerospace business would
likely eliminate this competition, depriving large aircraft customers
of the benefit of future innovation and product development.
21. The proposed acquisition, therefore, likely would substantially
lessen competition for the development, manufacture, and sale of THSAs
worldwide for large aircraft in violation of Section 7 of the Clayton
Act.
D. Difficulty of Entry
22. Sufficient, timely entry of additional competitors into the
market for THSAs for large aircraft is unlikely to prevent the harm to
competition that is likely to result if the proposed transaction is
consummated.
23. Designing and developing a THSA for large aircraft is
technically difficult. Even manufacturers of THSAs for smaller aircraft
face significant technical hurdles in designing and developing THSAs
for large aircraft. As aerodynamic loads are a major design
consideration for THSAs, and such loads are tightly correlated with the
size of the aircraft, THSAs for large aircraft present more demanding
technical challenges than those for smaller aircraft.
24. Opportunities to enter are limited. Because certification of a
THSA is expensive and time-consuming, once a THSA is certified for a
particular aircraft type, it is rarely replaced in the aftermarket by a
different THSA. Accordingly, competition between suppliers of THSAs
generally only occurs when an aircraft manufacturer is designing a new
aircraft or an upgraded version of an existing aircraft, which are
infrequent occurrences because development costs for such aircraft can
be tens of billions of dollars. As a result, several years usually pass
between contract awards for THSAs for a new aircraft design.
25. Potential entrants into the production of THSAs for large
aircraft face several additional obstacles. First, manufacturers of
large aircraft are more likely to purchase THSAs from those firms
already supplying THSAs for other large aircraft. The important
connection between THSAs and aircraft safety drives aircraft
manufacturers toward suppliers experienced with production of THSAs of
the relevant type and size. While some companies may have demonstrated
experience in THSAs for smaller aircraft, such experience is not
considered by customers to be as relevant as experience in THSAs for
large aircraft. A new entrant would face significant costs and time to
be considered a potential alternative to the existing suppliers.
26. Substantial time and significant financial investment would be
required for a company to design and develop a THSA for large aircraft.
Even companies that already make other types of THSAs would require
years of effort and an investment of many millions of dollars to
develop a product that is competitive with those offered by existing
large aircraft THSA suppliers.
27. As a result of these barriers, entry into the market for THSAs
for large aircraft would not be timely, likely, or sufficient to defeat
the substantial lessening of competition that would likely result from
Safran's acquisition of certain assets from RTX's Collins Aerospace
business.
VI. Violations Alleged
28. Safran's acquisition of certain assets from RTX's Collins
Aerospace business likely would lessen competition substantially in the
development, manufacture, and sale of THSAs for large aircraft, in
violation of Section 7 of the Clayton Act, 15 U.S.C. 18.
29. Unless enjoined, the proposed acquisition likely would have the
following anticompetitive effects relating to THSAs for large aircraft,
among others:
(a) actual and potential competition between Safran and RTX would
be eliminated;
(b) competition likely would be substantially lessened; and
(c) prices would likely increase, contractual terms likely would be
less favorable to the customers, quality
[[Page 29036]]
would likely be reduced, and innovation likely would decrease.
VII. Request for Relief
30. The United States requests that this Court:
(a) adjudge and decree that Safran's acquisition of certain assets
from RTX's Collins Aerospace business would be unlawful and violate
Section 7 of the Clayton Act, 15 U.S.C. 18;
(b) preliminarily and permanently enjoin and restrain Defendants
and all persons acting on their behalf from consummating the proposed
acquisition of certain assets from RTX's Collins Aerospace business by
Safran, or from entering into or carrying out any other contract,
agreement, plan, or understanding, the effect of which would be to
combine Safran with certain assets from RTX's Collins Aerospace
business;
(c) award the United States its costs for this action; and
(d) award the United States such other and further relief as the
Court deems just and proper.
Dated: June 17, 2025.
Respectfully submitted,
For Plaintiff United States of America:
Abigail A. Slater (D.C. Bar #90027189) Assistant Attorney General.
Roger P. Alford (D.C. Bar #445158) Principal Deputy Assistant
Attorney General.
William J. Rinner (D.C. Bar #997485) Deputy Assistant Attorney
General.
Ryan Danks Director of Civil Enforcement.
Soyoung Choe Acting Chief, Defense, Industrials, and Aerospace
Section.
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Daniel Monahan * Trial Attorney.
U.S. Department of Justice, Antitrust Division, Defense,
Industrials, and Aerospace Section, 450 Fifth Street NW, Suite 8700,
Washington, DC 20530, Tel.: 202-598-8774, Fax: 202-514-9033 Email:
<a href="/cdn-cgi/l/email-protection#82e6e3ecebe7eeacefedece3eae3ecc2f7f1e6ede8ace5edf4"><span class="__cf_email__" data-cfemail="076366696e626b296a6869666f666947727463686d29606871">[email protected]</span></a>
*Lead Attorney To Be Noticed
United States District Court for the District Of Columbia
UNITED STATES OF AMERICA, Plaintiff, v. Safran, S.A., Safran USA
Inc., and RTX Corporation, Defendants.
No. 1:25-cv-01897-CRC
Judge: Christopher R. Cooper
Proposed Final Judgment
Whereas, Plaintiff, United States of America, filed its Complaint
on June 17, 2025;
And Whereas, the United States and Defendants, Safran S.A., Safran
USA Inc., and RTX Corporation, have consented to entry of this Final
Judgment without the taking of testimony, 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 relating to
any issue of fact or law;
And Whereas, Defendant Safran agrees to make a divestiture to
remedy the loss of competition alleged in the Complaint;
And Whereas, Defendants represent that the divestiture and other
relief required by this Final Judgment can and will be made and that
Defendants will not later raise a claim of hardship or difficulty as
grounds for asking the Court to modify any provision of this Final
Judgment;
Now Therefore, It Is Ordered, Adjudged, And Decreed:
I. Jurisdiction
The Court has jurisdiction over the subject matter of, and each of
the parties to, this action. The Complaint states a claim upon which
relief may be granted against Defendants under Section 7 of the Clayton
Act (15 U.S.C. 18).
II. Definitions
As used in this Final Judgment:
A. ``Safran'' means Defendant Safran S.A., a French corporation
with its headquarters in Paris, France, its successors and assigns, and
its subsidiaries, including Defendant Safran USA Inc., divisions,
groups, affiliates, partnerships, and joint ventures, and their
directors, officers, managers, agents, and employees.
B. ``RTX'' means Defendant RTX Corporation, a Delaware corporation
with its headquarters in Arlington, Virginia, its successors and
assigns, and its subsidiaries, divisions, groups, affiliates,
partnerships, and joint ventures, and their directors, officers,
managers, agents, and employees.
C. ``Woodward'' means Woodward, Inc., a Delaware corporation with
its headquarters in Fort Collins, Colorado, its successors and assigns,
and its subsidiaries, divisions, groups, affiliates, partnerships, and
joint ventures, and their directors, officers, managers, agents, and
employees.
D. ``Acquirer'' means Woodward.
E. ``Divestiture Business'' means (1) Safran's North American
actuation business, including the entirety of the business activities
and assets engaged in the development, manufacture, and sale of
trimmable horizontal stabilizer actuators (``THSAs''), secondary flight
control actuation products and nose-wheel steering gearboxes; and (2)
Safran Electronics & Defense, Canada Inc. (``SEDC''), Safran's Canada-
based electronic control units business.
F. ``Divestiture Assets'' means all of Defendant Safran's rights,
titles, and interests in and to all property and assets related to the
Divestiture Business, tangible and intangible, wherever located,
relating to or used in connection with the Divestiture Business,
including:
1. the long-term leases for the facilities located at 2000 and 2020
Fisher Dr., Peterborough, ON K9J 6X6, Canada;
2. the Transitional Safran Brands License;
3. all other real property, including fee simple interests, real
property leasehold interests and renewal rights thereto, improvements
to real property, and options to purchase any adjoining or other
property, together with all buildings, facilities, and other
structures;
4. all tangible personal property, including fixed assets,
machinery and manufacturing equipment, tools, vehicles, inventory,
materials, office equipment and furniture, computer hardware, and
supplies;
5. all contracts, contractual rights, and customer relationships
(including contracts for the supply of THSAs to Airbus, S.E), and all
other agreements, commitments, and understandings, including supply
agreements, teaming agreements, and leases, and all outstanding offers
or solicitations to enter into a similar arrangement;
6. all licenses, permits, certifications, approvals, consents,
registrations, waivers, and authorizations, including those issued or
granted by any governmental organization, and all pending applications
or renewals;
7. all records and data, including (a) customer lists, accounts,
sales, and credits records, (b) production, repair, maintenance, and
performance records, (c) manuals and technical information Defendant
Safran provides to its own employees, customers, suppliers, agents, or
licensees, (d) records and research data concerning historic and
current research and development activities, including designs of
experiments and the results of successful and unsuccessful designs and
experiments, and (e) drawings, blueprints, and designs;
8. all intellectual property owned, licensed, or sublicensed,
either as licensor or licensee, including (a) patents, patent
applications, and inventions and discoveries that may be patentable,
(b) registered and unregistered copyrights and copyright applications,
and (c) registered and unregistered trademarks, trade dress, service
marks, trade names, and trademark applications; and
9. all other intangible property, including (a) commercial names
and d/b/a names, (b) technical information, (c)
[[Page 29037]]
computer software and related documentation, know-how, trade secrets,
design protocols, specifications for materials, specifications for
parts, specifications for devices, safety procedures (e.g., for the
handling of materials and substances), quality assurance and control
procedures, (d) design tools and simulation capabilities, and (e)
rights in internet websites and internet domain names.
Provided, however, that the assets specified in Paragraphs II.F.1-9
above do not include the Excluded Assets.
G. ``Divestiture Date'' means the date on which the Divestiture
Assets are divested to Acquirer pursuant to this Final Judgment.
H. ``Excluded Assets'' means (1) the interests in the facilities
located at Av. Sierra San Agust[iacute]n 2498, Col el Porvenir, Parque
Industrial Progreso, and 21185 Mexicali, B.C., Mexico and 1833 Alton
Parkway, Irvine, California, United States; (2) any intellectual
property associated with the brand names Safran and SEDA; and (3) the
contracts to supply: (i) Virgin Galactic with the mechanical portion of
an electromechanical THSA actuator (on a build to print basis), (ii)
the signal interface unit for user (``SIFU'') remote data concentrator
for Archer Aviation, Inc., (iii) the French legacy THSA activity
consisting of original equipment THSAs produced at Safran's facilities
in Mantes, Foug[egrave]res, Montlu[ccedil]on, and Auxerre, France, for
the Embraer KC-390 Millenium, the Bombardier CL650, the Pilatus PC-24
and the Piaggio P.180; (iv) the maintenance, repair, and operation
services and related spare parts for the Mitsubishi Heavy Industries
(MHI) CRJ family; and (v) Bell with actuation products unrelated to
THSAs for helicopters.
I. ``Including'' means including, but not limited to.
J. ``Regulatory Approvals'' means (1) any approvals or clearances
from the Committee on Foreign Investment in the United States
(``CFIUS'') or under antitrust or competition laws that are required
for the Transaction to proceed; and (2) any approvals or clearances
under antitrust or competition laws that are required for Acquirer's
acquisition of the Divestiture Assets to proceed.
K. ``Relevant Personnel'' means (1) all full-time, part-time, or
contract employees, wherever located, whose job responsibilities relate
in any way to the Divestiture Business at any time between June 14,
2023, and the Divestiture Date and (2) the employees in the positions
listed in Schedule A. The United States, in its sole discretion, will
resolve any disagreement relating to which employees are Relevant
Personnel.
L. ``Transaction'' means the proposed acquisition of part of
Collins Aerospace flight control and actuation business from RTX by
Safran.
M. ``Transitional Safran Brands License'' means a non-exclusive,
non-transferrable, non-sublicensable, fully paid-up, worldwide license
to use the marks ``Safran'' and ``SEDA'' in connection with the
products and services provided under the agreements described in
Section IV.K for a time period equal to the duration of those
agreements and any extensions approved by the United States and a non-
exclusive, non-transferrable, non-sublicensable, fully paid-up,
worldwide license to use the name ``SEDC'' for 180 days from the
Divestiture Date.
N.
III. Applicability
A. This Final Judgment applies to Safran and RTX, as defined above,
and all other persons in active concert or participation with any
Defendant who receive actual notice of this Final Judgment.
B. If, prior to complying with Section IV of this Final Judgment,
Defendants sell or otherwise dispose of all or substantially all of
their assets or of business units that include the Divestiture Assets,
Defendants must require any purchaser to be bound by the provisions of
this Final Judgment. Defendants need not obtain such an agreement from
Acquirer.
IV. Divestiture
A. Defendants are ordered and directed, within 90 calendar days
after the Court's entry of the Asset Preservation and Hold Separate
Stipulation and Order in this matter or within 90 calendar days after
Regulatory Approvals are received, whichever is later, to divest the
Divestiture Assets in a manner consistent with this Final Judgment to
Woodward. The United States, in its sole discretion, may agree to one
or more extensions of this time period and will notify the Court of any
extension.
B. For all contracts, agreements, and customer or supplier
relationships (or portions of such contracts, agreements, and customer
or supplier relationships) included in the Divestiture Assets,
Defendant Safran must assign or otherwise transfer all contracts,
agreements, and customer or supplier relationships, including contracts
for the supply of THSAs to Airbus, SE, to Acquirer; provided, however,
that for any contract or agreement that requires the consent of another
party to assign or otherwise transfer, Defendant Safran must use best
efforts to accomplish the assignment or transfer. Defendants must not
interfere with any negotiations between Acquirer and a contracting
party.
C. Defendants must use best efforts to divest the Divestiture
Assets as expeditiously as possible. Defendants must take no action
that would jeopardize the completion of the divestiture ordered by the
Court, including any action to impede the permitting, operation, or
divestiture of the Divestiture Assets.
D. Unless the United States otherwise consents in writing,
divestiture pursuant to this Final Judgment must include the entire
Divestiture Assets and must be accomplished in such a way as to satisfy
the United States, in its sole discretion, that the Divestiture Assets
can and will be used by Acquirer as part of a viable, ongoing business
for the development, manufacture, and sale of THSAs and that the
divestiture to Acquirer will remedy the competitive harm alleged in the
Complaint.
E. The divestiture must be made to an Acquirer that, in the United
States' sole judgment, has the intent and capability, including the
necessary managerial, operational, technical, and financial capability,
to compete effectively in the development, manufacture, and sale of
THSAs.
F. The divestiture must be accomplished in a manner that satisfies
the United States, in its sole discretion, that none of the terms of
any agreement between Acquirer and Defendants give Defendants the
ability unreasonably to raise Acquirer's costs, to lower Acquirer's
efficiency, or otherwise interfere in the ability of Acquirer to
compete effectively in the development, manufacture, and sale of THSAs.
G. Defendant Safran must provide Acquirer with (1) access to make
inspections of the Divestiture Assets; (2) access to all environmental,
zoning, and other permitting documents and information relating to the
Divestiture Assets; and (3) access to all financial, operational, or
other documents and information relating to the Divestiture Assets that
would customarily be provided as part of a due diligence process.
Defendants also must disclose all encumbrances on any part of the
Divestiture Assets, including on intangible property.
H. Defendant Safran must cooperate with and assist Acquirer in
identifying and, at the option of Acquirer, hiring all Relevant
Personnel, including:
1. Within 10 business days following the filing of the Complaint in
this matter, Defendant Safran must identify
[[Page 29038]]
all Relevant Personnel to Acquirer and the United States, including by
providing organization charts covering all Relevant Personnel.
2. Within 10 business days following receipt of a request by
Acquirer, the United States, or the monitor, Defendant Safran must
provide to Acquirer, the United States, and the monitor additional
information relating to Relevant Personnel, including name, job title,
reporting relationships, past experience, responsibilities, training
and educational histories, relevant certifications, and job performance
evaluations. Defendant Safran must also provide to Acquirer, the United
States, and the monitor information relating to current and accrued
compensation and benefits of Relevant Personnel, including most recent
bonuses paid, aggregate annual compensation, current target or
guaranteed bonus, if any, any retention agreement or incentives, and
any other payments due, compensation or benefits accrued, or promises
made to the Relevant Personnel. If Defendant Safran is barred by any
applicable law from providing any of this information, Defendant Safran
must provide, within 10 business days following receipt of the request,
the requested information to the full extent permitted by law and also
must provide a written explanation of Defendant Safran's inability to
provide the remaining information, including specifically identifying
the provisions of the applicable laws.
3. At the request of Acquirer, Defendant Safran must promptly make
Relevant Personnel available for private interviews with Acquirer
during normal business hours at a mutually agreeable location.
4. Defendants must not interfere with any effort by Acquirer to
employ any Relevant Personnel. Interference includes offering to
increase the compensation or improve the benefits of Relevant Personnel
unless (a) the offer is part of a company-wide increase in compensation
or improvement in benefits that was announced prior to June 14, 2023,
or (b) the offer is approved by the United States in its sole
discretion. Defendants' obligations under this Paragraph IV.H.4. will
expire 180 calendar days after the Divestiture Date.
5. For Relevant Personnel who elect employment with Acquirer within
180 calendar days of the Divestiture Date, Defendant Safran must waive
all non-compete and non-disclosure agreements; vest and pay to the
Relevant Personnel (or to Acquirer for payment to the employee) on a
prorated basis any bonuses, incentives, other salary, benefits or other
compensation fully or partially accrued at the time of the transfer of
the employee to Acquirer; vest any unvested pension and other equity
rights; and provide all other benefits that those Relevant Personnel
otherwise would have been provided had the Relevant Personnel continued
employment with Defendant Safran, including any retention bonuses or
payments. Defendant Safran may maintain reasonable restrictions on
disclosure by Relevant Personnel of Defendant Safran's proprietary non-
public information that is unrelated to the Divestiture Assets and not
otherwise required to be disclosed by this Final Judgment.
6. For a period of 12 months from the Divestiture Date, Defendant
Safran may not solicit to rehire Relevant Personnel who were hired by
Acquirer within 180 calendar days of the Divestiture Date unless (a) an
individual is terminated or laid off by Acquirer or (b) Acquirer agrees
in writing that Defendant Safran may solicit to re-hire that
individual. Nothing in this Paragraph IV.H.6. prohibits Defendants from
advertising employment openings using general solicitations or
advertisements and re-hiring Relevant Personnel who apply for an
employment opening through a general solicitation or advertisement.
I. Defendant Safran must warrant to Acquirer that (1) the
Divestiture Assets will be operational and without material defect on
the date of their transfer to Acquirer; (2) there are no material
defects in the environmental, zoning, or other permits relating to the
operation of the Divestiture Assets; and (3) Defendant Safran has
disclosed all encumbrances on any part of the Divestiture Assets,
including on intangible property. Following the sale of the Divestiture
Assets, Defendants must not undertake, directly or indirectly,
challenges to the environmental, zoning, or other permits relating to
the operation of the Divestiture Assets.
J. Defendant Safran must use best efforts to assist Acquirer to
obtain all necessary licenses, registrations, and permits to operate
the Divestiture Business. Until Acquirer obtains the necessary
licenses, registrations, and permits, Defendant Safran must provide
Acquirer with the benefit of Defendant Safran's licenses,
registrations, and permits to the full extent permissible by law.
K. At the option of Acquirer, subject to approval by the United
States in its sole discretion, on or before the Divestiture Date,
Defendant Safran must enter into a contract or contracts for the
operation of the portion of the Divestiture Assets located at Av.
Sierra San Agust[iacute]n 2498, Col el Porvenir, Parque Industrial
Progreso, and 21185 Mexicali, B.C., Mexico, facilities, sufficient to
meet Acquirer's needs, as determined by Acquirer, for a period of up to
24 months, on terms and conditions reasonably related to market
conditions for such asset operation. At the option of Acquirer, subject
to approval by the United States in its sole discretion, Defendant
Safran must enter into one or more extensions of any such contracts for
a total of up to an additional 12 months, on terms and conditions
reasonably related to market conditions for such asset operation. Any
amendment to or modification of any provision of any such contract or
extension must first be approved by the United States, in its sole
discretion. If Acquirer seeks an extension of the term of any such
contract, Defendant Safran must notify the United States in writing at
least 30 days prior to the date the contract expires. Acquirer may
terminate such a contract (including an extension), or any portion of
such a contract (including an extension), without cost or penalty upon
60 calendar days' written notice. The employees of Defendant Safran
tasked with operation of the Divestiture Assets located in Mexicali
must not share any competitively sensitive information of Acquirer with
any employee of Defendants other than those tasked with providing
operation services.
L. At the option of Acquirer, and subject to approval by the United
States in its sole discretion, on or before the Divestiture Date,
Defendant Safran must enter into a contract to provide transition
services for back office, human resources, accounting, employee health
and safety, and information technology services and support for a
period of up to 24 months, on terms and conditions reasonably related
to market conditions for the provision of the transition services. At
the option of Acquirer, subject to approval by the United States in its
sole discretion, Defendant Safran must enter into one or more
extensions of any contracts to provide transition services for a total
of up to an additional 12 months, on terms and conditions reasonably
related to market conditions for the provision of the transition
services. Any amendment to or modification of any provision of a
contract or extension to provide transition services must first be
approved by the United States, in its sole discretion. If Acquirer
seeks an extension of the term of any contract for transition services,
Defendants must notify the United States in writing at least 30
calendar days prior to the date
[[Page 29039]]
the contract expires. Acquirer may terminate a contract (including an
extension) for transition services, or any portion of a contract
(including an extension) for transition services, without cost or
penalty at any time upon 30 calendar days' written notice. The
employees of Defendant Safran tasked with providing transition services
must not share any competitively sensitive information of Acquirer with
any other employee of Defendants, other than those tasked with
providing transition services.
M. At the option of Acquirer, and subject to approval by the United
States in its sole discretion, on or before the Divestiture Date,
Defendants must enter into a lease or assignment of a lease for Suite
3, Section 1 on the first floor of 1733 Alton Parkway, Irvine,
California 92614 for a period of up to 12 months, on terms and
conditions reasonably related to market conditions for such leases. At
the option of Acquirer, subject to approval by the United States in its
sole discretion, Defendants must enter into one or more extensions of
any lease for a total of up to an additional 12 months, on terms and
conditions reasonably related to market conditions for such leases. Any
amendment to or modification of any provision of a lease or extension
must first be approved by the United States, in its sole discretion. If
Acquirer seeks an extension of the term of any lease, Defendants must
notify the United States in writing at least 30 calendar days prior to
the date the lease expires. Acquirer may terminate a lease (including
an extension), or any portion of a lease (including an extension),
without cost or penalty at any time upon 30 calendar days' written
notice.
N. If any term of an agreement between Defendants and Acquirer,
including an agreement to effectuate the divestiture required by this
Final Judgment, varies from a term of this Final Judgment, to the
extent that Defendants cannot fully comply with both, this Final
Judgment determines Defendants' obligations.
V. Financing
Defendants may not finance all or any part of Acquirer's purchase
of all or part of the Divestiture Assets.
VI. Asset Preservation and Hold Separate
Defendants must take all steps necessary to comply with the Asset
Preservation and Hold Separate Stipulation and Order entered by the
Court.
VII. Affidavits
A. Within 20 calendar days of the filing of the Complaint in this
matter, and every 30 calendar days thereafter until the divestiture
required by this Final Judgment has been completed, each Defendant must
deliver to the United States an affidavit, signed by each Defendant's
Chief Financial Officer and General Counsel, describing in reasonable
detail the fact and manner of that Defendant's compliance with this
Final Judgment. The United States, in its sole discretion, may approve
different signatories for the affidavits.
B. Defendants must keep all records of any efforts made to divest
the Divestiture Assets until one year after the Divestiture Date.
C. Within 20 calendar days of the filing of the Complaint in this
matter, Defendants must deliver to the United States an affidavit
signed by Defendants' Chief Financial Officer and General Counsel that
describes in reasonable detail all actions that Defendant Safran has
taken and all steps that Defendants have implemented on an ongoing
basis to comply with Section VI of this Final Judgment. The United
States, in its sole discretion, may approve different signatories for
the affidavits.
D. If a Defendant makes any changes to actions and steps described
in affidavits provided pursuant to Paragraph VII.C., the Defendant
must, within 15 calendar days after any change is implemented, deliver
to the United States an affidavit describing those changes.
E. Defendants must keep all records of any efforts made to comply
with Section VI until one year after the Divestiture Date.
VIII. Appointment of Monitor
A. Upon application of the United States in its sole discretion,
which Defendants may not oppose, the Court will appoint a monitor
selected by the United States and approved by the Court. Defendants may
propose candidates for the monitor appointment to the United States.
Once approved, the court-appointed monitor should be considered by the
United States and Defendants to be an arm and representative of the
Court.
B. The monitor will have the power and authority to monitor
Defendants' compliance with the terms of this Final Judgment and the
Asset Preservation and Hold Separate Stipulation and Order entered by
the Court and will have other powers as the Court deems appropriate.
The monitor will have no responsibility or obligation for operation of
the Divestiture Assets.
C. The monitor must investigate and report on Defendants'
compliance with this Final Judgment and the Asset Preservation and Hold
Separate Stipulation and Order, including Paragraphs IV.H, IV.K., IV.L,
IV.M. and Section X. The monitor must provide periodic reports to the
United States setting forth Defendants' efforts to comply with their
obligations under this Final Judgment and under the Asset Preservation
and Hold Separate Stipulation and Order. The United States, in its sole
discretion, will set the frequency of the monitor's reports.
D. The monitor will have the authority to take such steps as, in
the monitor's discretion and the United States' view, may be necessary
to accomplish the monitor's responsibilities. The monitor may seek
information from Defendants' personnel, including in-house counsel,
compliance personnel, and internal auditors. Defendants must establish
a policy, annually communicated to all employees, that employees may
disclose any information to the monitor without reprisal for such
disclosure. Defendants must not retaliate against any employee or third
party for disclosing information to the monitor.
E. Defendants may not object to actions taken by the monitor in
fulfillment of the monitor's responsibilities under any Order of the
Court on any ground other than malfeasance by the monitor.
Disagreements between the monitor and Defendants related to the scope
of the monitor's responsibilities do not constitute malfeasance.
Objections by Defendants must be conveyed in writing to the United
States and the monitor within 10 calendar days of the monitor's action
that gives rise to Defendants' objection or the objection is waived.
F. The monitor will serve at the cost and expense of Defendant
Safran pursuant to a written agreement, on terms and conditions,
including confidentiality requirements and conflict of interest
certifications, approved by the United States in its sole discretion.
If the monitor and Defendant Safran are unable to reach such a written
agreement within 14 calendar days of the Court's appointment of the
monitor, or if the United States, in its sole discretion, declines to
approve the proposed written agreement, the United States, in its sole
discretion, may take appropriate action, including making a
recommendation to the Court, which may set the terms and conditions for
the monitor's work, including the monitor's compensation.
G. The monitor may hire, at the cost and expense of Defendant
Safran, any
[[Page 29040]]
agents and consultants, including investment bankers, attorneys, and
accountants, that are reasonably necessary in the monitor's judgment to
assist with the monitor's duties. These agents or consultants will be
directed by and solely accountable to the monitor and will serve on
terms and conditions, including confidentiality requirements and
conflict-of-interest certifications, approved by the United States in
its sole discretion. Within three business days of hiring any agents or
consultants, the monitor must provide written notice of the hiring and
the rate of compensation to Defendant Safran and the United States. The
compensation of the monitor and agents or consultants retained by the
monitor must be on reasonable and customary terms commensurate with the
individuals' experience and responsibilities. The monitor must account
for all costs and expenses incurred.
H. Defendant Safran's failure to promptly pay the monitor's
invoices and accounted-for costs and expenses, including for agents and
consultants, will constitute a violation of this Final Judgment and may
result in sanctions imposed by the Court. If Defendant Safran makes a
timely objection in writing to the United States to any part of the
monitor's invoices or accounted-for costs and expenses, Defendant
Safran must establish an escrow account into which Defendant Safran
must pay the disputed amount until the dispute is resolved.
I. Defendants must use best efforts to cooperate fully with the
monitor and to assist the monitor to monitor Defendants' compliance
with their obligations under this Final Judgment and the Asset
Preservation and Hold Separate Stipulation and Order. Subject to
reasonable protection for trade secrets, other confidential research,
development, or commercial information, or any applicable privileges,
Defendants must provide the monitor and agents or consultants retained
by the monitor with full and complete access to all personnel (current
and former), agents, consultants, books, records, and facilities of the
Divestiture Assets. Defendants may not take any action to interfere
with or to impede accomplishment of the monitor's responsibilities.
J. The monitor may communicate ex parte with the Court when, in the
monitor's sole discretion, the monitor believes such communication is
reasonably necessary to the monitor's duties under this Final Judgment,
including if Defendant Safran fails to timely pay the monitor's
invoices or accounted-for costs and expenses or if Defendants otherwise
violate this Final Judgment.
K. The monitor will serve until 180 calendar days after (1) the
expiration of the last contracts between Defendants and Acquirer
related to the operation of any of the Divestiture Assets pursuant to
Paragraph IV.K, the provision of any transition services pursuant to
Paragraph IV.L, the provision of any lease pursuant to Paragraph IV.M,
or any other obligations of Defendants to Acquirer, and (2) the
expiration of Defendants' obligations under Section X, unless the
United States, in its sole discretion, determines a different period is
appropriate.
L. If the United States determines that the monitor is not acting
diligently or in a reasonably cost-effective manner, or if the monitor
resigns or becomes unable to accomplish the monitor's duties, the
United States may recommend that the Court appoint a substitute
monitor.
IX. Compliance Inspection
A. For the purposes of determining or securing compliance with this
Final Judgment or of related orders such as the Asset Preservation and
Hold Separate Stipulation and Order or of determining whether this
Final Judgment should be modified or vacated, upon written request of
an authorized representative of the Assistant Attorney General for the
Antitrust Division, and reasonable notice to Defendants, Defendants
must permit, from time to time and subject to legally recognized
privileges, authorized representatives, including agents retained by
the United States:
1. to have access during Defendants' office hours to inspect and
copy, or at the option of the United States, to require Defendants to
provide electronic copies of all books, ledgers, accounts, records,
data, and documents, wherever located, 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, wherever located, who may have their
individual counsel present, relating to any matters contained in this
Final Judgment. The interviews must 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 for the Antitrust Division, Defendants must
submit written reports or respond to written interrogatories, under
oath if requested, relating to any matters contained in this Final
Judgment.
X. Firewalls
A. Defendant Safran must implement and maintain effective
procedures to prevent Acquirer's competitively sensitive information
from being shared or disclosed, by or through implementation and
execution of the obligations required by this Final Judgment and any
associated agreements, including agreements entered pursuant to
Paragraphs IV.K, IV.L, and IV.M, by the employees of Defendant Safran
tasked with (1) operating the Divestiture Assets at Av. Sierra San
Agust[iacute]n 2498, Col el Porvenir, Parque Industrial Progreso, and
21185 Mexicali, B.C., Mexico, facilities (``Mexicali Facilities'') for
Acquirer, or (2) providing transition services to Acquirer
(collectively, ``Firewall Employees'') and any other employees of
Defendants. In particular, no employee of Defendant Safran assigned to,
or with any management responsibility for, the Collins Aerospace flight
control and actuation business may be given, or have access to,
information about the production for Acquirer at the Mexicali
Facilities, including information about demand, product, sales, or
price.
B. Defendant Safran must, within thirty (30) calendar days of the
entry of the Asset Preservation Stipulation and Order, submit to the
United States and, if one has been appointed, to the monitor, a
compliance plan setting forth in detail the procedures Defendant Safran
proposes to implement to effect compliance with this Section X. The
United States must inform Defendant Safran within ten (10) business
days of receipt whether, in its sole discretion, the United States
approves or rejects Defendant Safran's compliance plan. Within ten (10)
business days of receiving a notice of rejection, Defendant Safran must
submit a revised compliance plan. The United States may request that
the Court determine whether Defendant Safran's proposed compliance plan
fulfills the requirements of this Section X.
C. At minimum, an effective compliance plan must include, for all
Firewall Employees, (1) initial written notice on or before the
Divestiture Date, (2) training within thirty (30) days of the
Divestiture Date followed by training on a yearly basis, and (3)
provision of written acknowledgment of the obligations of this Section
X within thirty (30) days of the Divestiture Date and on a yearly basis
thereafter. The form of all written notifications must first be
reviewed by the monitor, if one
[[Page 29041]]
has been appointed, and approved by the United States, in its sole
discretion. Defendant Safran must maintain complete records of all
written notices, training, employee acknowledgments, and all other
efforts made to comply with this Section X until the termination of all
contracts between Defendant Safran and Acquirer related to the
operation of, support of, or transition services for the Divestiture
Assets or five years after the Divestiture Date, whichever is later.
XI. No Reacquisition
Defendants may not reacquire any part of or any interest in the
Divestiture Assets during the term of this Final Judgment without prior
authorization of the United States.
XII. Public Disclosure
A. No information or documents obtained pursuant to any provision
of this Final Judgment, including reports the monitor provides to the
United States pursuant to Paragraph VIII.C, may be divulged by the
United States or the monitor 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, for the purpose of evaluating a
proposed Acquirer or securing compliance with this Final Judgment, or
as otherwise required by law.
B. In the event that the monitor receives a subpoena, court order,
or other court process seeking or requiring production of information
or documents obtained pursuant to any provision in this Final Judgment,
including reports the monitor provides to the United States pursuant to
Paragraph VIII.C, the monitor must notify the United States and
Defendants immediately and prior to any disclosure, so that Defendants
may address such potential disclosure and, if necessary, pursue
alternative legal remedies, including if deemed appropriate by
Defendants, intervention in the relevant proceedings.
C. In the event of a request by a third party, pursuant to the
Freedom of Information Act, 5 U.S.C. 552, for disclosure of information
obtained pursuant to any provision of this Final Judgment, the
Antitrust Division will act in accordance with that statute, and the
Department of Justice regulations at 28 CFR part 16, including the
provision on confidential commercial information, at 28 CFR 16.7.
Defendants submitting information to the Antitrust Division should
designate the confidential commercial information portions of all
applicable documents and information under 28 CFR 16.7. Designations of
confidentiality expire 10 years after submission, ``unless the
submitter requests and provides justification for a longer designation
period.'' See 28 CFR 16.7(b).
D. If at the time that Defendants furnish information or documents
to the United States pursuant to any provision of this Final Judgment,
Defendants represent and identify in writing information or documents
for 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,'' the United
States must give Defendants 10 calendar days' notice before divulging
the material in any legal proceeding (other than a grand jury
proceeding).
XIII. Retention of Jurisdiction
The Court retains jurisdiction to enable any party to this Final
Judgment to apply to the 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. Enforcement of Final Judgment
A. If any time during the five years from entry of this Final
Judgment, the United States determines in its sole discretion that the
Final Judgment has failed to fully redress the violations alleged in
the Complaint, then the United States may re-open this proceeding to
seek additional relief, including divestiture of additional assets.
Such additional relief may be ordered by this Court upon a finding by a
preponderance of the evidence that there is a reasonable probability
that the proposed Final Judgment did not fully redress the violations
alleged in the Complaint.
B. The United States retains and reserves all rights to enforce the
provisions of this Final Judgment, including the right to seek an order
of contempt from the Court. Defendants agree that in a civil contempt
action, a motion to show cause, or a similar action brought by the
United States relating to an alleged violation of this Final Judgment,
the United States may establish a violation of this Final Judgment and
the appropriateness of a remedy therefor by a preponderance of the
evidence, and Defendants waive any argument that a different standard
of proof should apply.
C. This Final Judgment should be interpreted to give full effect to
the procompetitive purposes of the antitrust laws and to restore the
competition the United States alleges was harmed by the challenged
conduct. Defendants agree that they may be held in contempt of, and
that the Court may enforce, any provision of this Final Judgment that,
as interpreted by the Court in light of these procompetitive principles
and applying ordinary tools of interpretation, is stated specifically
and in reasonable detail, whether or not it is clear and unambiguous on
its face. In any such interpretation, the terms of this Final Judgment
should not be construed against either party as the drafter.
D. In an enforcement proceeding in which the Court finds that
Defendants have violated this Final Judgment, the United States may
apply to the Court for an extension of this Final Judgment, together
with other relief that may be appropriate. In connection with a
successful effort by the United States to enforce this Final Judgment
against a Defendant, whether litigated or resolved before litigation,
that Defendant agrees to reimburse the United States for the fees and
expenses of its attorneys, as well as all other costs including
experts' fees, incurred in connection with that effort to enforce this
Final Judgment, including in the investigation of the potential
violation.
E. For a period of four years following the expiration of this
Final Judgment, if the United States has evidence that a Defendant
violated this Final Judgment before it expired, the United States may
file an action against that Defendant in this Court requesting that the
Court order: (1) Defendant to comply with the terms of this Final
Judgment for an additional term of at least four years following the
filing of the enforcement action; (2) all appropriate contempt
remedies; (3) additional relief needed to ensure the Defendant complies
with the terms of this Final Judgment; and (4) fees or expenses as
called for by this Section XIV.
XV. Expiration of Final Judgment
Unless the Court grants an extension, this Final Judgment will
expire 10 years from the date of its entry, except that after five
years from the date of its entry, this Final Judgment may be terminated
upon notice by the United States to the Court and Defendants that the
divestiture has been completed and continuation of this Final Judgment
is no longer necessary or in the public interest.
[[Page 29042]]
XVI. Public Interest Determination
Entry of this Final Judgment is in the public interest. The parties
have complied with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16, including by making available to the
public copies of this Final Judgment and the Competitive Impact
Statement, public comments thereon, and any response to comments by the
United States. Based upon the record before the Court, which includes
the Competitive Impact Statement and, if applicable, any comments and
response to comments filed with the Court, entry of this Final Judgment
is in the public interest.
Date:------------------------------------------------------------------
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. 16
-----------------------------------------------------------------------
United States District Judge
Schedule A
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
SR. ELECTRO-MECHANICAL DESIGNER SafranEDA Irvine, CA.
SR PROJECT ENGINEER SafranEDA Irvine, CA.
SR PROJECT ENGINEER SafranEDA Irvine, CA.
SR. ENGINEERING PROJECT ASSISTANT SafranEDA Irvine, CA.
SR. ELECTRONICS TECHNICIAN SafranEDA Irvine, CA.
PR SYSTEMS ENGINEER SafranEDA Irvine, CA.
SENIOR ACCOUNTANT SafranEDA Irvine, CA.
PR SYSTEMS SAFETY ENGINEER SafranEDA Irvine, CA.
CONTRACTS MANAGER SafranEDA Irvine, CA.
DIRECTOR OF PROGRAM MANAGEMENT (ELLINGTON) SafranEDA Irvine, CA.
MECHANICAL ENGINEER SafranEDA Irvine, CA.
Sr. Program Manager SafranEDA Irvine, CA.
SR QUALITY ENGINEER SafranEDA Irvine, CA.
DIRECTOR--ENGINEERING (ELLINGTON) SafranEDA Irvine, CA.
SR STRESS ENGINEER SafranEDA Irvine, CA.
SR. SUPPLIER RELATIONSHIP MANAGER SafranEDA Irvine, CA.
SR. MECHANICAL ENGINEER SafranEDA Irvine, CA.
SR. ELECTRONICS TECHNICIAN SafranEDA Irvine, CA.
PR SYSTEMS ENGINEER SafranEDA Irvine, CA.
SR ELECTRICAL ENGINEER SafranEDA Irvine, CA.
----------------------------------------------------------------------------------------------------------------
United States District Court for the District of Columbia
United States of America, Plaintiff, v. Safran, S.A., Safran USA
Inc., and RTX Corporation, Defendants.
1:25-cv-01897-CRC
Judge: Christopher R. Cooper
I. Competitive Impact Statement
In accordance with the Antitrust Procedures and Penalties Act, 15
U.S.C. 16(b)-(h) (the ``APPA'' or ``Tunney Act''), the United States of
America files this Competitive Impact Statement related to the proposed
Final Judgment filed in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
On July 20, 2023, Safran S.A. (``Safran'') agreed to acquire
certain assets of the Collins Aerospace business from RTX Corporation
(``RTX'') for approximately $1.8 billion. The United States filed a
civil antitrust Complaint on June 17, 2025, seeking to enjoin the
proposed acquisition. The Complaint alleges that the likely effect of
this acquisition would be to substantially lessen competition for the
development, manufacture, and sale of trimmable horizontal stabilizer
actuators (``THSAs'') for large aircraft in the worldwide market in
violation of Section 7 of the Clayton Act, 15 U.S.C. 18.
At the same time the Complaint was filed, the United States filed a
proposed Final Judgment and an Asset Preservation and Hold Separate
Stipulation and Order (``Stipulation and Order''), which are designed
to remedy the loss of competition alleged in the Complaint.
Under the proposed Final Judgment, which is explained more fully
below, Defendant Safran is required to divest its North American
actuation business, including the development, manufacture, and sale of
THSAs; secondary flight control actuation products and nose-wheel
steering gearboxes; and Safran's Canada-based electronic control units
business, to Woodward, Inc. (``Woodward'').
The Stipulation and Order requires Defendants to take certain steps
to operate, preserve, and maintain the full economic viability,
marketability, and competitiveness of the assets that must be divested
pending entry of the Final Judgment by this Court. In addition,
management, sales, and operations of the assets that must be divested
must be held entirely separate, distinct and apart from Defendants'
other operations. The purpose of these terms in the Stipulation and
Order is to ensure that competition is maintained during the pendency
of the required divestiture.
The United States and Defendants have stipulated that the proposed
Final Judgment may be entered after compliance with the APPA. Entry of
the proposed Final Judgment will terminate this action, except that the
Court will retain jurisdiction to construe, modify, or enforce the
provisions of the proposed Final Judgment and to punish violations
thereof.
II. Description of Events Giving Rise to the Alleged Violation
A. The Defendants and the Proposed Transaction
Safran S.A. is incorporated in France and has its headquarters in
Paris, France. Safran produces a wide range of products for the
aerospace industry and other industries, including THSAs for large
aircraft. Safran USA, Inc. is a US-based subsidiary of Safran
headquartered in Alexandria, Virginia. In 2024, Safran had revenues of
approximately [euro]27 billion.
RTX is incorporated in Delaware and is headquartered in Arlington,
Virginia. RTX is a major provider of aerospace and defense electronics
systems. RTX produces, among other products, THSAs for large aircraft.
In 2024, RTX had revenues of approximately $80 billion.
Pursuant to an asset purchase agreement dated July 20, 2023,
Defendant Safran proposes to acquire
[[Page 29043]]
certain assets from Defendant RTX's Collins Aerospace business. The
transaction is valued at approximately $1.8 billion.
B. Prior Divestiture in UTC-Rockwell Collins
On October 1, 2018, the Antitrust Division entered a consent decree
requiring United Technologies Corporation (``UTC'') to divest two
businesses critical to the safe operation of aircraft to resolve
competitive concerns raised by UTC's acquisition of Rockwell Collins,
Inc. (``Rockwell Collins''). One of the divestiture businesses
identified in the decree was Rockwell Collins's THSA business. Because
of the safety critical nature of THSAs, it was imperative that the
divesture buyer have an established presence in the aerospace industry
with well-established customer relationships. Ultimately, the Antitrust
Division approved Safran as the divestiture buyer and, since that time,
Safran has operated the divested business as a viable competitor in the
market for THSAs.
In April of 2020, following UTC's acquisition of Rockwell Collins,
UTC merged with Raytheon Company, forming the company now branded as
RTX. The Complaint alleges that Safran's proposed acquisition of RTX
would recombine the THSA assets that were divested to resolve the
Division's concerns with UTC's acquisition of Rockwell Collins.
C. The Competitive Effects of the Transaction
The Complaint alleges that the transaction will result in
anticompetitive effects in the market for the development, manufacture,
and sale of THSAs for large aircraft.
1. Relevant Product Market
Actuators are responsible for the proper positions of an aircraft
by manipulating the control surfaces on its wings and tail section. A
THSA is a type of actuator and helps an aircraft maintain the proper
altitude during flight by adjusting (``trimming'') the angle of the
horizontal stabilizer, the control surface of the aircraft's tail
responsible for aircraft pitch. This control surface is critical to the
safety and performance of the aircraft, as a loss of control could
cause the aircraft to crash. The stabilizer encounters significant
aerodynamic loads for extended periods of time, and the THSA must be
capable of handling these loads. THSAs thus tend to be the largest and
most technically demanding actuators on an aircraft.
THSAs vary in size, complexity, and cost based on the size and type
of aircraft on which they are used. Because large aircraft encounter
significantly higher aerodynamic loads than smaller aircraft, THSAs for
large aircraft are considerably larger, more complex, and more
expensive than those used on smaller aircraft. Large aircraft primarily
include commercial aircraft that seat at least six passengers abreast
(such as the Airbus A320 and A350 and the Boeing 737, 787, and 777x)
and military transport aircraft, but exclude regional aircraft,
business jets, and tactical military aircraft.
THSAs can also vary in the type of power source used to effect
actuation. Actuation can be effected using an electric or hydraulic
source of control. Typically, an aircraft uses only one type so that
all actuation on the aircraft, including THSAs, is controlled by either
electric or hydraulic means. At the design phase, large aircraft
manufacturers can choose either type of power source to control
actuation. Once a plane is designed, manufacturers are unable to switch
between electric or hydraulic actuation components, including THSAs,
due in part to the certification required for these components.
THSAs for large aircraft do not have technical substitutes. Large
aircraft manufacturers cannot switch to THSAs for smaller aircraft, or
actuators for other aircraft control surfaces, because those products
cannot adequately control the lift and manage the load generated by the
horizontal stabilizer of a large aircraft. A small but significant
increase in the price of THSAs for large aircraft would not cause
aircraft manufacturers to substitute THSAs designed for smaller
aircraft or actuators for other control surfaces in volumes sufficient
to make such a price increase unprofitable. Accordingly, THSAs for
large aircraft are a line of commerce and a relevant product market
within the meaning of Section 7 of the Clayton Act, 15 U.S.C. 18.
2. Relevant Geographic Market
The relevant geographic market within the meaning of Section 7 of
the Clayton Act, 15 U.S.C. 18 is worldwide. THSAs for large aircraft
are marketed internationally and may be sourced from suppliers globally
because transportation costs are a small proportion of the cost of the
product and, thus, are not a major factor in supplier selection.
3. Competitive Effects
Safran and RTX are two of the leading suppliers in the worldwide
market for the development, manufacture, and sale of THSAs for large
aircraft. Safran and RTX have respectively won two of the most
significant recent contract awards for THSAs for large aircraft: the
Boeing 777X and the Airbus A350. Boeing and Airbus are the world's
largest manufacturers of passenger aircraft, and these aircraft
represent two of only three THSA awards by these manufacturers in this
century. Other producers of THSAs tend to concentrate on THSAs for
smaller aircraft, such as business jets or regional jets, or to focus
on products for other aircraft control surfaces.
Safran and RTX view each other as a significant competitive threat
for the development, manufacture, and sale of THSAs worldwide for large
aircraft. The two companies are among the few that have demonstrated
expertise in designing and producing THSAs for large aircraft. Each
firm considers the other company's offering when planning bids.
Customers have benefitted from the competition between Safran and RTX
for the development, manufacture, and sale of THSAs worldwide for large
aircraft. Competition between two of the leading suppliers of a product
results in more favorable contractual terms, more innovative products,
and shorter delivery times. The combination of Safran and certain
assets from RTX's Collins Aerospace business would eliminate this
competition and its future benefits to customers. Post-acquisition,
Safran likely would have the incentive and the ability to increase
prices profitably and offer less favorable contractual terms.
Safran and RTX also invest significantly to remain leading
suppliers for the development, manufacture, and sale of THSAs worldwide
for large aircraft, and aircraft manufacturers expect them to remain
leading suppliers of new products in the future. The combination of
Safran and certain assets from RTX's Collins Aerospace business would
likely eliminate this competition, depriving large aircraft customers
of the benefit of future innovation and product development.
The proposed acquisition, therefore, likely would substantially
lessen competition for the development, manufacture, and sale of THSAs
worldwide for large aircraft in violation of Section 7 of the Clayton
Act.
4. Difficulty of Entry
Sufficient, timely entry of additional competitors into the market
for THSAs for large aircraft is unlikely to prevent the harm to
competition that is likely to result if the proposed transaction is
consummated.
[[Page 29044]]
Designing and developing a THSA for large aircraft is technically
difficult. Even manufacturers of THSAs for smaller aircraft face
significant technical hurdles in designing and developing THSAs for
large aircraft. As aerodynamic loads are a major design consideration
for THSAs, and such loads are tightly correlated with the size of the
aircraft, THSAs for large aircraft present more demanding technical
challenges than those for smaller aircraft.
Opportunities to enter are limited. Because certification of a THSA
is expensive and time-consuming, once a THSA is certified for a
particular aircraft type, it is rarely replaced in the aftermarket by a
different THSA. Accordingly, competition between suppliers of THSAs
generally only occurs when an aircraft manufacturer is designing a new
aircraft or an upgraded version of an existing aircraft, which are
infrequent occurrences because development costs for such aircraft can
be tens of billions of dollars. As a result, several years usually pass
between contract awards for THSAs for a new aircraft design.
Potential entrants into the production of THSAs for large aircraft
face several additional obstacles. First, manufacturers of large
aircraft are more likely to purchase THSAs from those firms already
supplying THSAs for other large aircraft. The important connection
between THSAs and aircraft safety drives aircraft manufacturers toward
suppliers experienced with production of THSAs of the relevant type and
size. While some companies may have demonstrated experience in THSAs
for smaller aircraft, such experience is not considered by customers to
be as relevant as experience in THSAs for large aircraft. A new entrant
would face significant costs and time to be considered a potential
alternative to the existing suppliers.
Substantial time and significant financial investment would be
required for a company to design and develop a THSA for large aircraft.
Even companies that already make other types of THSAs would require
years of effort and an investment of many millions of dollars to
develop a product that is competitive with those offered by existing
large aircraft THSA suppliers.
As a result of these barriers, entry into the market for THSAs for
large aircraft would not be timely, likely, or sufficient to defeat the
substantial lessening of competition that would likely result from
Safran's acquisition of certain assets from RTX's Collins Aerospace
business.
III. Explanation of the Proposed Final Judgment
Paragraph IV.A of the proposed Final Judgment requires Defendant
Safran, within 90 days after the entry of the Stipulation and Order by
the Court or within 90 days after regulatory approvals are received, to
divest Safran's North American actuation business, explained in further
detail below, including the development, manufacture, and sale of
THSAs, secondary flight control actuation products, and nose-wheel
steering gearboxes; and Safran's Canada-based electronic control units
business to Woodward. Defendants must take all reasonable steps
necessary to accomplish the divestiture quickly and must cooperate with
the acquirer. Regulatory approvals, as defined in Paragraph II.J,
include any approvals or clearances: (1) from the Committee on Foreign
Investment in the United States (``CFIUS'') or under antitrust or
competition laws that are required for the Safran-RTX transaction to
proceed; and (2) under antitrust or competition laws that are required
for Woodward's acquisition to proceed.
Defendant Safran is required to divest the Divestiture Assets,
which consist of all of its rights, titles, and interests in and to all
property and assets related to the Divestiture Business. The
Divestiture Business, defined in Paragraphs II.E, includes: (1)
Safran's North American actuation business, including the development,
manufacture, and sale of THSAs, secondary flight control actuation
products, and nose-wheel steering gearboxes; and (2) Safran Electronics
& Defense, Canada Inc., Safran's Canada-based electronic control units
business.
Paragraph II.F of the proposed Final Judgment identifies nine
categories of Divestiture Assets, including: (1) real property
interests at specified locations used in the Divestiture Business in
Peterborough, Canada; (2) a transitional Safran brands license; (3) all
other real property related to the Divestiture Business; (4) all
personal property, including machines, manufacturing equipment, tools,
inventory, and materials; (5) all contracts, contractual rights, and
customer relationships and all other agreements, commitments, and
understandings, including supply agreements; (6) all licenses, permits,
certifications, approvals, consents, registrations, waivers, and
authorizations; (7) all records and data; (8) all intellectual property
owned, licensed, or sublicensed, either as licensor or licensee; and
(9) all other intangible property. These Divestiture Assets are broadly
defined to ensure a complete divestiture of all assets needed for the
Divested Businesses. Any exceptions to the divestiture obligations are
specified in the proposed Final Judgment.
The Divestiture Assets do not include certain specified assets, as
defined in Paragraph II.H as Excluded Assets, including: (1) the
interests in specified facilities located in Mexicali, Mexico and
Irvine, California; (2) any intellectual property associated with the
brand names ``Safran'' and ``SEDA''; and (3) the contracts to supply
(i) Virgin Galactic with the mechanical portion of an electromechanical
THSA actuator (on a build to print basis); (ii) the signal interface
unit for user (``SIFU'') remote data concentrator for Archer Aviation,
Inc.; (iii) the French legacy THSA activity consisting of original
equipment THSAs produced at Safran's facilities in specified locations
in France, for a limited number of specified aircraft; (iv) the
maintenance, repair, and operation services and related spare parts for
the Mitsubishi Heavy Industries (MHI) CRJ family; and (v) the contract
to supply Bell with actuation products unrelated to THSA for
helicopters.
The proposed Final Judgment contains provisions intended to
facilitate the acquirer's efforts to hire certain employees.
Specifically, Paragraph IV.H of the proposed Final Judgment requires
Defendant Safran to identify all Relevant Personnel, including by
providing the acquirer and the United States with organization charts
and information relating to these employees and making them available
for interviews. It also provides that Defendants must not interfere
with any negotiations by the acquirer to hire these employees. In
addition, for employees who elect employment with the acquirer,
Defendant Safran must waive all non-compete and non-disclosure
agreements, vest all unvested pension and other equity rights, provide
any pay pro rata, provide all compensation and benefits that those
employees have fully or partially accrued, and provide all other
benefits that the employees would generally be provided had those
employees continued employment with Defendant Safran, including but not
limited to any retention bonuses or payments. This paragraph further
provides that Defendant Safran may not solicit to rehire any of those
employees who were hired by the acquirer, unless an employee is
terminated or laid off by the acquirer or the acquirer agrees in
writing that Defendant Safran may solicit to hire that individual. The
non-
[[Page 29045]]
solicitation period runs for one year from the date of the divestiture.
Paragraph IV.B of the proposed Final Judgment requires Defendant
Safran to transfer all contracts, agreements, and relationships to the
acquirer and to make best efforts to assign, subcontract, or otherwise
transfer contracts or agreements that require the consent of another
party before assignment, subcontracting, or other transfer. This
includes the transfer of customer contracts, such as a contract with
Airbus, SE for THSAs, and supplier contracts.
The proposed Final Judgment requires Defendant Safran to provide
certain transition services to maintain the viability and
competitiveness of the Divestiture Business during the transition to
the acquirer. Paragraph IV.L of the proposed Final Judgment requires
Defendant Safran, at the acquirer's option, to enter into a transition
services contract(s) for back office, billing, provisioning, human
resources, accounting, employee health and safety, and information
technology services and support for a period of up to 24 months. The
acquirer may terminate the transition services agreement, or any
portion of it, without cost or penalty at any time upon commercially
reasonable notice. The paragraph further requires Defendant Safran, at
the acquirer's option and subject to the United States's approval, in
its sole discretion, to enter into one or more extensions of this
transition services agreement for a total of up to an additional 12
months and that any amendments to or modifications of any provisions of
a transition services agreement are subject to approval by the United
States in its sole discretion. Paragraph IV.L also provides that
employees of Defendant Safran tasked with supporting this agreement
must not share any competitively sensitive information of the acquirer
with any other employee of Defendants, unless such sharing is for the
sole purpose of providing transition services to the acquirer.
Paragraph IV.K of the proposed Final Judgment requires Defendant
Safran, at the acquirer's option, to enter into a contract for
operation of the portion of the Divestiture Assets located at specified
locations in Mexicali, Mexico for a period of up to 24 months. The
acquirer may terminate the operation contract, or any portion of it,
without cost or penalty at any time upon commercially reasonable
notice. Upon the acquirer's request, the United States, in its sole
discretion, may approve one or more extensions of the operation
contract for up to an additional 12 months and that any amendments to
or modifications of any provisions of a supply contract are subject to
approval by the United States, in its sole discretion. Paragraph IV.K
also provides that employees of Defendant Safran tasked with supporting
this contract must not share any competitively sensitive information of
the acquirer with any other employee of Defendants, unless such sharing
is for the sole purpose of operation of the Divestiture Assets under
this contract.
Paragraph IV.M of the proposed Final Judgment requires Defendants,
at acquirer's option, to enter into a lease or assignment of a lease
for a specified location in Irvine, California, for a period of up to
12 months. The acquirer may terminate the lease, or any portion of it,
without cost or penalty at any time upon commercially reasonable
notice. The paragraph further provides that Defendants, at the
acquirer's option and subject to the approval of the United States, in
its sole discretion, must enter into one or more extensions of this
lease or assignment of a lease for a total of up to an additional 12
months and that any amendments to or modifications of any provisions of
a lease are subject to approval by the United States, in its sole
discretion.
Section VIII of the proposed Final Judgment provides that the
United States may appoint a monitor who will have the power and
authority to investigate and report on Defendants' compliance with the
terms of the Final Judgment and the Stipulation and Order, including
Paragraphs IV.H, IV.K., IV.L, IV.M. and Section X. The monitor will not
have any responsibility or obligation for the operation of Defendants'
businesses. The monitor will serve at Defendant Safran's expense, on
such terms and conditions as the United States approves, and Defendants
must assist the monitor in fulfilling his or her obligations. The
monitor will provide periodic reports to the United States and will
serve until 180 days after the expiration of the transition services
agreements, operation agreements, and lease, and the expiration of
Defendants' obligations in Section X of the proposed Final Judgment to
prevent Acquirer's competitively sensitive information from being
shared or disclosed by or through the implements of the obligations
required by the proposed Final Judgment.
Paragraph XIV.A of the proposed Final Judgment provides that, if at
any time during the five (5) year period following entry of the Final
Judgment, the United States determines at its sole discretion that the
Final Judgment has failed to fully redress the violations alleged in
the Complaint, then the United States may re-open the proceeding to
seek additional relief, including divestiture of additional assets.
Paragraph XIV.B of the proposed Final Judgment provides that the
United States retains and reserves all rights to enforce the Final
Judgment, including the right to seek an order of contempt from the
Court. Under the terms of this paragraph, Defendants have agreed that
in any civil contempt action, any motion to show cause, or any similar
action brought by the United States regarding an alleged violation of
the Final Judgment, the United States may establish the violation and
the appropriateness of any remedy by a preponderance of the evidence
and that Defendants have waived any argument that a different standard
of proof should apply. This provision aligns the standard for
compliance with the Final Judgment with the standard of proof that
applies to the underlying offense that the Final Judgment addresses.
Paragraph XIV.C of the proposed Final Judgment provides additional
clarification regarding the interpretation of the provisions of the
proposed Final Judgment. The proposed Final Judgment is intended to
remedy the loss of competition the United States alleges would
otherwise be harmed by the transaction. Defendants agree that they will
abide by the proposed Final Judgment and that they may be held in
contempt of the Court for failing to comply with any provision of the
proposed Final Judgment that is stated specifically and in reasonable
detail, as interpreted in light of this procompetitive purpose.
Paragraph XIV.D of the proposed Final Judgment provides that if the
Court finds in an enforcement proceeding that a Defendant has violated
the Final Judgment, the United States may apply to the Court for an
extension of the Final Judgment, together with such other relief as may
be appropriate. In addition, to compensate American taxpayers for any
costs associated with investigating and enforcing violations of the
Final Judgment, Paragraph XIV.D provides that, in any successful effort
by the United States to enforce the Final Judgment against a Defendant,
whether litigated or resolved before litigation, the Defendant must
reimburse the United States for attorneys' fees, experts' fees, and
other costs incurred in connection with that effort to enforce this
Final Judgment, including the investigation of the potential violation.
[[Page 29046]]
Paragraph XIV.E of the proposed Final Judgment states that the
United States may file an action against a Defendant for violating the
Final Judgment for up to four years after the Final Judgment has
expired or been terminated. This provision is meant to address
circumstances such as when evidence that a violation of the Final
Judgment occurred during the term of the Final Judgment is not
discovered until after the Final Judgment has expired or been
terminated or when there is not sufficient time for the United States
to complete an investigation of an alleged violation until after the
Final Judgment has expired or been terminated. This provision,
therefore, makes clear that, for four years after the Final Judgment
has expired or been terminated, the United States may still challenge a
violation that occurred during the term of the Final Judgment.
Finally, Section XV of the proposed Final Judgment provides that
the Final Judgment will expire ten (10) years from the date of its
entry, except that after five (5) years from the date of its entry, the
Final Judgment may be terminated upon notice by the United States to
the Court and Defendants that the divestiture has been completed and
continuation of the Final Judgment is no longer necessary or in the
public interest.
The relief required by the proposed Final Judgment is designed to
remedy the loss of competition alleged in the Complaint by establishing
an independent and economically viable competitor in the market for
THSAs for large aircraft. The assets referenced above must be divested
in such a way as to satisfy the United States, in its sole discretion,
that the assets can and are likely to be operated by the acquirer as a
viable, ongoing business that can compete effectively in the relevant
market.
IV. Remedies Available to Potential Private Plaintiffs
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 neither impairs
nor assists 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 and Defendants have stipulated that the proposed
Final Judgment may be entered by the Court after compliance with the
provisions of the APPA, provided that the United States has not
withdrawn its consent. The APPA conditions entry upon the Court's
determination that the proposed Final Judgment is in the public
interest.
The APPA provides a period of at least 60 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 60
days of the date of publication of this Competitive Impact Statement in
the Federal Register, or within 60 days of the first 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 U.S. Department of Justice, which remains
free to withdraw its consent to the proposed Final Judgment at any time
before the Court's entry of the Final Judgment. The comments and the
response of the United States will be filed with the Court. In
addition, the comments and the United States' responses will be
published in the Federal Register unless the Court agrees that the
United States instead may publish them on the U.S. Department of
Justice, Antitrust Division's internet website.
Written comments should be submitted in English to: Soyoung Choe,
Acting Chief, Defense, Industrials and Aerospace Section, Antitrust
Division, United States Department of Justice, 450 Fifth St. NW, Suite
8700, Washington, DC 20530, <a href="/cdn-cgi/l/email-protection#f0b1a4a2deb4b9b1ddb99e969f829d9184999f9eb08583949f9ade979f86"><span class="__cf_email__" data-cfemail="a8e9fcfa86ece1e985e1c6cec7dac5c9dcc1c7c6e8dddbccc7c286cfc7de">[email protected]</span></a>.
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
As an alternative to the proposed Final Judgment, the United States
considered a full trial on the merits against Defendants. The United
States could have continued the litigation and sought preliminary and
permanent injunctions against Safran's acquisition of certain assets of
the Collins Aerospace business from RTX. Under the circumstances
present here, however, the United States concludes that entry of the
proposed Final Judgment is in the public interest insofar as it 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
Under the Clayton Act and APPA, proposed Final Judgments, or
``consent decrees,'' in antitrust cases brought by the United States
are subject to a 60-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 (D.C. Cir. 1995); United States v.
U.S. Airways Grp., Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014)
(explaining that the ``court's inquiry is limited'' in Tunney Act
settlements); United States v. InBev N.V./S.A., No. 08-1965 (JR), 2009
U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a
court's review of a proposed Final 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'').
As the U.S. Court of Appeals for the District of Columbia Circuit
has held, under the APPA a court considers, among other things, the
relationship
[[Page 29047]]
between the remedy secured and the specific allegations in the
government's Complaint, whether the proposed Final Judgment is
sufficiently clear, whether its enforcement mechanisms are sufficient,
and whether it may positively harm third parties. See Microsoft, 56
F.3d at 1458-62. With respect to the adequacy of the relief secured by
the proposed Final Judgment, a court may not ``make de novo
determination of facts and issues.'' United States v. W. Elec. Co., 993
F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); see also
Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 F.
Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 F.
Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787, at
*3. Instead, ``[t]he balancing of competing social and political
interests affected by a proposed antitrust decree must be left, in the
first instance, to the discretion of the Attorney General.'' W. Elec.
Co., 993 F.2d at 1577 (quotation marks omitted). ``The court should
also bear in mind the flexibility of the public interest inquiry: the
court's function is not to determine whether the resulting array of
rights and liabilities is the one that will best serve society, but
only to confirm that the resulting settlement is within the reaches of
the public interest.'' Microsoft, 56 F.3d at 1460 (quotation marks
omitted); see also United States v. Deutsche Telekom AG, No. 19-2232
(TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More demanding
requirements would ``have enormous practical consequences for the
government's ability to negotiate future settlements,'' contrary to
congressional intent. Microsoft, 56 F.3d at 1456. ``The Tunney Act was
not intended to create a disincentive to the use of the consent
decree.'' Id.
The United States' predictions about the efficacy of the remedy are
to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at
1461 (recognizing courts should give ``due respect to the Justice
Department's . . . view of the nature of its case''); United States v.
Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In
evaluating objections to settlement agreements under the Tunney Act, a
court must be mindful that [t]he government need not prove that the
settlements will perfectly remedy the alleged antitrust harms[;] it
need only provide a factual basis for concluding that the settlements
are reasonably adequate remedies for the alleged harms.'' (internal
citations omitted)); United States v. Republic Servs., Inc., 723 F.
Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to
which the government's proposed remedy is accorded''); United States v.
Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A
district court must accord due respect to the government's prediction
as to the effect of proposed remedies, its perception of the market
structure, and its view of the nature of the case.''). The ultimate
question is whether ``the remedies [obtained by the Final Judgment are]
so inconsonant with the allegations charged as to fall outside of the
`reaches of the public interest.' '' Microsoft, 56 F.3d at 1461
(quoting W. Elec. Co., 900 F.2d at 309).
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 U.S. Airways,
38 F. Supp. 3d at 75 (noting that the court must simply determine
whether there is a factual foundation for the government's decisions
such that its conclusions regarding the proposed settlements are
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``[T]he
`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.
In its 2004 amendments to the APPA, Congress made clear its intent
to preserve the practical benefits of using judgments proposed by the
United States in antitrust enforcement, Public Law 108-237 Sec. 221,
and added 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); see also U.S. Airways, 38 F. Supp. 3d at 76
(indicating that a court is not required to hold an evidentiary hearing
or to permit intervenors as part of its review under the Tunney Act).
This language explicitly wrote into the statute what Congress intended
when it first enacted the Tunney Act in 1974. As Senator Tunney
explained: ``[t]he court is nowhere compelled to go to trial or to
engage in extended proceedings which might have the effect of vitiating
the benefits of prompt and less costly settlement through the consent
decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of Sen.
Tunney). ``A court can make its public interest determination based on
the competitive impact statement and response to public comments
alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova Corp., 107 F.
Supp. 2d at 17).
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: June 17, 2025.
Respectfully submitted,
For Plaintiff United States of America:
-----------------------------------------------------------------------
Daniel Monahan,
United States Department of Justice, Antitrust Division, Defense,
Industrials, and Aerospace Section, 450 Fifth St. NW, Suite 8700,
Washington, DC 20530, Telephone: 202-598-8774, Email:
<a href="/cdn-cgi/l/email-protection#f69297989f939ad89b9998979e9798b6838592999cd8919980"><span class="__cf_email__" data-cfemail="086c6966616d642665676669606966487d7b6c6762266f677e">[email protected]</span></a>.
[FR Doc. 2025-12329 Filed 7-1-25; 8:45 am]
BILLING CODE 4410-11-P
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