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1
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DECISION & ORDER
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EXTRACTED KEY WORDS
APP COMMISSION AGREEMENT RESPONDENTS CONSENT ORDER PLC PATENT REF COUNTRY GRANT APPLICANT BEARINGS ASSETS GLACIER METAL COMPANY COMPETITIVENESS UNITED KINGDOM SEPARATE AGREEMENT FEDERAL TRADE COMMISSION FEDERAL-MOGUL CORPORATION TRADE COMMISSION ACT ACQUISITION BEARING MATERIALS DIVESTITURE INDEPENDENT AUDITOR EROSION RESISTANT UNITED STATES MANAGEMENT TEAM THEREAFTER EMPLOYMENT |
B248725
9810011
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
COMMISSIONERS:
Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
In the Matter of
FEDERAL-MOGUL CORPORATION,
a corporation, DOCKET NO. C-3836
and DECISION AND ORDER
T&N PLC,
a corporation.
The Federal Trade Commission ("the Commission"), having initiated an investigation of the
proposed acquisition by Federal-Mogul Corporation of T&N plc, hereinafter sometimes referred
to as the "respondents," and having been furnished thereafter with a copy of a draft of complaint
which the Bureau of Competition proposed to present to the Commission for its consideration
and which, if issued by the Commission, would charge respondent with a violation of Section 5 of
the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, and a violation of Section 7 of
the Clayton Act, as amended, 15 U.S.C. § 18; and
The respondents, their attorneys, and counsel for the Commission having thereafter
executed an agreement containing a consent order, an admission by the respondents of all the
jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of
agreement is for settlement purposes only and does not constitute an admission by respondents
that the law has been violated as alleged in such complaint, and waivers and other provisions as
required by the Commission's Rules; and
The Commission, having thereafter considered the matter and having determined that it had
reason to believe that the respondents have violated the said Acts, and that a complaint should
issue stating its charges in that respect, and having thereupon accepted the executed consent
agreement and placed such agreement on the public record for a period of sixty (60) days, and
having duly considered the comments filed thereafter by interested persons pursuant to § 2.34 of
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2
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COMPLAINT
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EXTRACTED KEY WORDS
ENGINE FEDERAL-MOGUL SALE DUTY ENGINE BEARINGS UNITED STATES THINWALL BEARINGS COMPETITION HEAVY DUTY AFTERMARKET MARKET LIGHT DUTY CUSTOMERS OEMS ENTRY RESPONDENT ACT MANUFACTURERS PROPOSED ACQUISITION TRUCK DESIGN COMMISSION COMMERCE BEARINGS SOLD FTC ACT AUTOMOBILE INDUSTRY CONCENTRATION CONSUMER HHI PROPOSED MERGER |
B248725
9810011
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of
FEDERAL-MOGUL CORPORATION, a corporation, and
T&N PLC, a corporation.
Docket No. C-3836
COMPLAINT
The Federal Trade Commission ("Commission"), having reason to believe
that respondent Federal-Mogul Corporation ("Federal-Mogul"), a
corporation subject to the jurisdiction of the Commission, has made a
cash tender offer to acquire all of the common stock of T&N plc
("T&N"), an entity subject to the jurisdiction of the Commission, in
violation of the provisions of Section 7 of the Clayton Act, as
amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission
Act ("FTC Act"), as amended, 15 U.S.C. § 45, and it appearing to the
Commission that a proceeding by it in respect thereof would be in the
public interest, hereby issues its Complaint, stating its charges as
follows:
I. THE RESPONDENTS
1. Respondent Federal-Mogul Corporation ("Federal-Mogul") is a
corporation organized, existing and doing business under and by virtue
of the laws of the State of Michigan, with its office and principal
place of business located at 26555 Northwestern Highway, Southfield,
Michigan 48034. In 1996, Federal-Mogul had worldwide net sales of
approximately $2 billion.
2. Respondent T&N plc ("T&N") is a corporation organized under the
laws of the United Kingdom, with its principal offices located at
Manchester International Office Center, Styal Road, Manchester M22
5TN, England. In 1995, T&N had worldwide revenue of approximately $3.2
billion, including sales in the United States totaling approximately
$877 million.
II. JURISDICTION
3. At all times relevant here, Respondents have been, and are now,
corporations as "corporation" is defined in Section 4 of the FTC Act,
15 U.S.C. § 44; and at all times relevant herein, the respondents have
been, and are now, engaged in commerce as "commerce" is defined in
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3
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AGREEMENT CONTAINING CONSENT
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EXTRACTED KEY WORDS
AGREEMENT CONSENT ORDER COMMISSION RESPONDENTS FEDERAL-MOGUL BUSINESS PROPOSED RESPONDENTS FEDERAL-MOGUL CORPORATION DIVEST SEPARATE AGREEMENT FEDERAL TRADE COMMISSION COUNSEL ACQUISITION LAWS TRUSTEE INDEPENDENT AUDITOR DIVESTITURE THINWALL BEARINGS MANAGEMENT TEAM UNITED STATES EMPLOYMENT COMPETITIVENESS MATERIAL CONFIDENTIAL INFORMATION TRADE COMMISSION ACT COMPLIANCE PUBLIC RECORD REPRESENTATIVES ACCOMPLISH MCCONNELLSVILLE STRIP FACILITY |
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of
FEDERAL-MOGUL CORPORATION, a corporation, and T&N PLC, a corporation.
File No. 981 0011
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission ("Commission"), having initiated an
investigation of the proposed acquisition by Federal-Mogul Corporation
of T&N plc, and it now appearing that Federal-Mogul and T&N,
hereinafter sometimes referred to as "proposed respondents," are
willing to enter into an agreement containing an order to divest
certain assets and providing for other relief;
IT IS HEREBY AGREED by and between proposed respondents, by their duly
authorized officers and attorneys, and counsel for the Commission,
that:
1. Proposed respondent Federal-Mogul Corporation ("Federal-Mogul") is
a corporation organized, existing and doing business under and by
virtue of the laws of Michigan, with its office and principal place of
business located at 26555 Northwestern Highway, Southfield, Michigan
48034.
2. Proposed respondent T&N plc ("T&N) is a public limited company
organized, existing and doing business under and by virtue of the laws
of the United Kingdom, with its office and principal place of business
located at Manchester International Office Centre, Styal Road,
Manchester M22 5TN, England.
3. Proposed respondents admit all the jurisdictional facts set forth
in the draft complaint here attached.
4. Proposed respondents waive:
a. any further procedural steps;
b. the requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
c. all rights to seek judicial review or otherwise to challenge or
contest the validity of the Order entered pursuant to this
Agreement; and
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4
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ANALYSIS
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EXTRACTED KEY WORDS
PROPOSED ORDER FEDERAL-MOGUL ENGINE THINWALL BEARINGS DIVEST PRODUCERS BEARING BUSINESS ASSETS COMPETITION ALLEGES DUTY ENGINE PROPOSED COMPLAINT DAIDO AGREEMENT UNITED STATES HEAVY DUTY ENGINE AFTERMARKET OEMS MARKET PLANTS DRY BEARINGS SELL LIGHT DUTY MANUFACTURERS SALE ENGINE BEARINGS SOLD COOPERATION POLYMER BEARINGS ARRANGEMENTS |
ANALYSIS OF PROPOSED CONSENT ORDER
TO AID PUBLIC COMMENT
___________________________________
The Federal Trade Commission ("Commission") has accepted, subject to
final approval, an Agreement Containing Consent Order ("Agreement")
from Federal-Mogul Corporation ("Federal-Mogul") and T&N plc ("T&N").
The proposed Consent Order has been placed on the public record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
Agreement and the comments received and will decide whether it should
withdraw from the Agreement or make final the Agreement's proposed
Order.
Both Federal-Mogul, a Michigan corporation, and T&N, a corporation
organized under the laws of the United Kingdom, design, manufacture
and sell fluid film or "plain" thinwall bearings ("thinwall
bearings"). These are bearings that do not have roller or ball
elements, but have a surface coating of oil which reduces friction.
Among the thinwall bearings Federal-Mogul and T&N manufacture and sell
are thinwall bearings for use in automobile and light truck engines
("light duty engine bearings") and thinwall bearings for use in heavy
truck and heavy equipment engines ("heavy duty engine bearings"). Both
Federal-Mogul and T&N sell light duty and heavy duty engine bearings
to original equipment manufacturers ("OEMs"), which buy bearings and
use them to manufacture engines, and to aftermarket companies, which
buy bearings and use them to repair or service engines after the
engines' warranty periods have expired. Federal- Mogul and T&N are the
largest competitors in the manufacture and sale of thinwall bearings
to OEMs and the aftermarket in the United States. On October 16, 1997,
Federal-Mogul notified T&N of Federal-Mogul's intention to commence a
cash tender offer to acquire 100 percent of the voting securities of
T&N for approximately $2.4 billion.
The Proposed Complaint
The proposed complaint alleges that the proposed acquisition may
substantially lessen competition in the development, manufacture, and
sale of (1) thinwall bearings, (2) light duty engine bearings sold to
OEMs, (3) heavy duty engine bearings sold to OEMs, and (4) engine
bearings sold to the aftermarket. The proposed complaint also alleges
that the relevant geographic market for evaluating the acquisition's
effect on the thinwall bearings market is the world. Every engine has
a unique set of bearings which, with few exceptions, cannot be used in
any other engine. The bearings are engineered in terms of materials,
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