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1
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ORDER TO MAINTAIN ASSETS
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EXTRACTED KEY WORDS
ASSETS MONITOR TRUSTEE COMMISSION CONSENT CONSENT AGREEMENT COMPLIANCE REASON COMPLAINT ACT APPOINT BUSINESS PURSUANT COUNSEL PROVISIONS DIVESTITURE PARAGRAPH EXPENSES AUTHORITY REQUEST DUTIES LIABILITIES FEDERAL TRADE COMMISSION THEREAFTER VIOLATIONS EXECUTE JURISDICTIONAL FACTS LAWS MATTER UNITED KINGDOM |
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
COMMISSIONERS: Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
Thomas B. Leary
__________________________________ )
In the Matter of ))
Glaxo Wellcome plc, )
a corporation, ))
and )) Docket No. C-3990
SmithKline Beecham plc, )
a corporation. ))
__________________________________ )
ORDER TO MAINTAIN ASSETS
The Federal Trade Commission ("Commission") having initiated an investigation of the
proposed merger between Respondent Glaxo Wellcome plc ("Glaxo") and Respondent
SmithKline Beecham plc ("SB"), hereinafter referred to as "Respondents," and the Respondents
having been furnished thereafter with a copy of a draft of Complaint which the Bureau of
Competition presented to the Commission for its consideration and which, if issued by the
Commission, would charge the Respondents with violations of Section 7 of the Clayton Act, as
amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15
U.S.C. § 45; and
Respondents, their attorneys, and counsel for the Commission having thereafter executed
an Agreement Containing Consent Orders ("Consent Agreement"), containing the proposed
Decision and Order, an admission by the Respondents of all of the jurisdictional facts set forth in
the aforesaid draft of Complaint, a statement that the signing of said Consent Agreement is for
settlement purposes only and does not constitute an admission by the Respondents that the law
has been violated as alleged in such Complaint, or that the facts as alleged in such Complaint,
other than the jurisdictional facts, are true, 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 has
reason to believe that Respondents have violated the said Acts, and that a Complaint should issue
stating its charges in that respect, and having determined to accept the executed Consent
Agreement and to place the Consent Agreement on the public record for a period of thirty (30)
days, the Commission hereby issues its Complaint, makes the following jurisdictional findings and
issues this Order to Maintain Assets:
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2
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DECISION & ORDER
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EXTRACTED KEY WORDS
COMMISSION AGREEMENT GLAXO ASSETS COMMISSION-APPROVED ACQUIRER ASSET SALE AGREEMENT KYTRIL PENCICLOVIR FAMCICLOVIR EMPLOYEES MERGER SMITHKLINE BEECHAM CONFIDENTIAL BUSINESS INFORMATION DIVESTITURE AGREEMENT SMITHKLINE BEECHAM PLC FINISHED GOODS GLAXO WELLCOME FEDERAL TRADE COMMISSION COMPETITION MANUFACTURING FDA TAZICEF ASSETS DRUG MASTER FILES SUPPLY AGREEMENT JURISDICTION EMPLOYMENT INTELLECTUAL PROPERTY PRODUCT REGISTRATIONS PRODUCT TRADEMARKS |
001-0088
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
COMMISSIONERS: Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
Thomas B. Leary
__________________________________
)
In the Matter of )
)
Glaxo Wellcome plc, )
a corporation, )
)
and )
) Docket No. C-3990
SmithKline Beecham plc, ) DECISION AND ORDER
a corporation. )
)
__________________________________)
The Federal Trade Commission ("Commission") having initiated an investigation of the
proposed merger of Respondent Glaxo Wellcome plc ("Glaxo") and Respondent SmithKline
Beecham plc ("SB"), hereinafter referred to as "Respondents," and Respondents having been
furnished thereafter with a copy of a draft of Complaint that the Bureau of Competition presented
to the Commission for its consideration and which, if issued by the Commission, would charge
Respondents with violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and
Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and
Respondents, their attorneys, and counsel for the Commission having thereafter executed
an Agreement Containing Consent Orders ("Consent Agreement"), containing an admission by
Respondents of all the jurisdictional facts set forth in the aforesaid draft of Complaint, a
that the signing of said Consent 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, or that the facts as alleged in such Complaint, other than jurisdictional facts, are
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 Respondents have violated the said Acts, and that a Complaint should issue
stating its charges in that respect, and having thereupon issued its Complaint and an Order to
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3
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COMPLAINT
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EXTRACTED KEY WORDS
TREATMENT HERPES MARKET GLAXO ANTIVIRALS SALE HERPES VACCINES PRESCRIPTION COMMISSION ACT TOPOISOMERASE INHIBITORS MIGRAINE HEADACHES HHI MERGER UNITED STATES CEFTAZIDIME SECOND GENERATION PROPHYLACTIC HERPES CANCER TRIPTAN DRUGS TOPICAL PRESCRIPTION IBS OTC H-2 BLOCKERS MERGED ENTITY PRICES ANTIEMETIC DRUGS PHARMACEUTICALS INTRAVENOUS ANTIVIRAL DRUGS |
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
__________________________________
)
In the Matter of )
)
Glaxo Wellcome plc, )
a corporation, )
)
and )
) Docket No. C-3990
SmithKline Beecham plc, )
a corporation. )
)
__________________________________)
COMPLAINT
The Federal Trade Commission ("Commission"), having reason to believe that
Respondent Glaxo Wellcome plc ("Glaxo"), a corporation subject to the jurisdiction of the
Commission, has agreed to merge with Respondent SmithKline Beecham plc ("SB"), a
corporation subject to the jurisdiction of the Commission, in violation of Section 7 of the Clayton
Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as
amended, 15 U.S.C. § 45, and it appearing to the Commission that a proceeding in respect thereof
would be in the public interest, hereby issues its Complaint, stating its charges as follows:
I. DEFINITIONS
1. "Commission" means the Federal Trade Commission.
2. "FDA" means the United States Food and Drug Administration.
3. "Ceftazidime" means any product that contains any form or formulation of the
compound ceftazidime, any of its constituent elements, active ingredients or intermediaries, and
all rights relating to the research, development, manufacture and sale of any such Product.
Ceftazidime is a semisynthetic, broad-spectrum antibacterial derived from cephaloridine and used
especially for pseudomonas and other gram-negative infections in hospitalized patients.
4. "5HT-3 antiemetic drug" means any 5HT-3 receptor antagonist prescription
pharmaceutical compound indicated for the prevention and treatment of nausea and vomiting
associated with medical treatment, including chemotherapy, radiation therapy, or surgery.
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4
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AGREEMENT CONTAINING CONSENT
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EXTRACTED KEY WORDS
CONSENT AGREEMENT ASSETS COMMISSION COMPLAINT GLAXO WELLCOME LAW PROCEEDING ACCEPTANCE PLC RELIEF BUSINESS FACTS DRAFT CONTEMPLATES COMPLIANCE PUBLIC RECORD SERVE SMITHKLINE BEECHAM DIVEST HEREBY COUNSEL UNITED KINGDOM PURSUANT REPORTS MANNER MIDDLESEX ENGLAND JURISDICTIONAL FACTS THEREAFTER |
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
__________________________________
)
In the Matter of )
)
Glaxo Wellcome, PLC, )
a corporation, )
)
and )
) File No. 001 0088
SmithKline Beecham, PLC, )
a corporation. )
)
AGREEMENT CONTAINING CONSENT ORDERS
The Federal Trade Commission ("Commission"), having initiated an investigation of the
proposed merger between Glaxo Wellcome, PLC, ("Glaxo") and SmithKline Beecham, PLC,
("SKB"), and it now appearing that Glaxo and Warner, hereinafter sometimes referred to as
"Proposed Respondents," are willing to enter into this Agreement Containing Consent Orders
("Consent Agreement") 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 Glaxo is a corporation 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 Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex, UB6
ONN, England.
2. Proposed respondent SKB is a corporation 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 3 New Horizons Court, Brentford, Middlesex, TW8 9EP, England.
3. Proposed Respondents admit all the jurisdictional facts set forth in the draft of Complaint
here attached.
Agreement Containing Consent Orders Page 2 of 4
4. Proposed Respondents waive:
a. any further procedural steps;
b. the requirement that the Commission's Order to Maintain Assets and Decision and
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5
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ATTACHMENT 3
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EXTRACTED KEY WORDS
AGREEMENT ACQUIRER FDA APPROVALS COMMISSION RESPONDENTS UNITED STATES PLANS REPORTS PARTIES OBLIGATIONS TRUST AGREEMENT BUSINESS REASON PURPOSE CONFIDENTIALITY APPROVAL ASSETS RELATING REQUEST MEETINGS DISCLOSE EMPLOYEE RECIPIENT CONSENT AGREEMENT EXECUTE PRIOR THIRD PARTY PREPARATION ORDINARY COURSE TIMELY MANNER |
ATTACHMENT 3
This Agreement entered into this ______ day of December 2000 between FRANCIS J.
CIVILLE (the "Monitor Trustee") and ABBOTT LABORATORIES (the "Acquirer"), referred to
herein collectively as "the parties," provides as follows:
WHEREAS the Federal Trade Commission (the "Commission") has accepted or will
shortly accept for Public Comment an Agreement Containing Consent Orders ("Consent
Agreement") with SmithKline Beecham plc ("SB") and Glaxo Wellcome plc ("GW") (where
"Respondents," as used herein, means SB and GW, individually and collectively), that contains an
Order to Maintain Assets and a Decision and Order, collectively hereinafter referred to as the
"Orders," which provide for, among other things, the appointment of a Monitor Trustee to ensure
that Respondents fully perform their obligations with respect to the Approval Assets (as defined in
the related Trust Agreement) under the Orders, and, at Respondents' expense, to monitor the
efforts of certain of the Acquirers of the Approval Assets to obtain all FDA approvals necessary
to manufacture any Product included within the Approval Assets in or into the United States ("the
Relevant Product(s)") in a diligent manner,
WHEREAS, the Orders further provide that Respondents shall execute a trust agreement
("Trust Agreement"), subject to the prior approval of the Commission, and confer all the rights,
authority and powers necessary to permit the Monitor Trustee to monitor the Respondents'
compliance with the terms of the Order and certain activities of the Acquirer, as may be
determined by the Commission, related to the transfer of the Relevant Products; and
WHEREAS, the parties to this Agreement intend to be legally bound;
NOW, THEREFORE, the parties agree as follows:
1. The Acquirer shall:
a. Provide the following to the Monitor Trustee no later than ninety (90) days after the
Closing Date:
i. the Acquirer's plan to obtain all necessary FDA approvals to manufacture the Relevant
Product(s) divested pursuant to the Orders; and
ii. the Acquirer's annual production forecasts and planned activities relating to
manufacture with respect to the Relevant Product(s), including any such activities
contracted to a third party.
b. To the extent the following are prepared in the ordinary course of Acquirer's business,
provide the following to the Monitor Trustee in a timely manner but no later than thirty
(30) days after the preparation of the document:
-1-
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6
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ATTACHMENT 2
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EXTRACTED KEY WORDS
AGREEMENT ACQUIRER FDA APPROVALS COMMISSION RESPONDENTS UNITED STATES PLANS SELL BUSINESS PARTIES OBLIGATIONS TRUST AGREEMENT REPORTS REASON PURPOSE CONFIDENTIALITY APPROVAL ASSETS RELATING REQUEST MEETINGS DISCLOSE EMPLOYEE CONSENT AGREEMENT EXECUTE PRIOR MANUFACTURING THIRD PARTY ORDINARY COURSE TIMELY MANNER |
ATTACHMENT 2
This Agreement entered into this ______ day of December 2000 between FRANCIS J.
CIVILLE (the "Monitor Trustee") and NOVARTIS PHARMACEUTICALS CORPORATION
(the "Acquirer"), referred to herein collectively as "the parties," provides as follows:
WHEREAS the Federal Trade Commission (the "Commission") has accepted or will
shortly accept for Public Comment an Agreement Containing Consent Orders ("Consent
Agreement") with SmithKline Beecham plc ("SB") and Glaxo Wellcome plc ("GW") (where
"Respondents," as used herein, means SB and GW, individually and collectively), that contains an
Order to Maintain Assets and a Decision and Order, collectively hereinafter referred to as the
"Orders," which provide for, among other things, the appointment of a Monitor Trustee to ensure
that Respondents fully perform their obligations with respect to the Approval Assets (as defined in
the related Trust Agreement) under the Orders, and, at Respondents' expense, to monitor the
efforts of certain of the Acquirers of the Approval Assets to obtain all FDA approvals necessary
to manufacture and sell any Product included within the Approval Assets in or into the United
States ("Relevant Product(s)") in a diligent manner,
WHEREAS, the Orders further provide that Respondents shall execute a trust agreement
("Trust Agreement"), subject to the prior approval of the Commission, and confer all the rights,
authority and powers necessary to permit the Monitor Trustee to monitor the Respondents'
compliance with the terms of the Order and certain activities of the Acquirer, as may be
determined by the Commission, related to the transfer of the Relevant Products; and
WHEREAS, the parties to this Agreement intend to be legally bound;
NOW, THEREFORE, the parties agree as follows:
1. The Acquirer shall:
a. Provide the following to the Monitor Trustee no later than sixty (60) days after the
Closing Date:
i. the Acquirer's plan to obtain all necessary FDA approvals to manufacture and sell the
Relevant Product(s) divested pursuant to the Orders; and
ii. the Acquirer's business plan for developing, manufacturing and marketing of the
Relevant Product(s) in or into the United States, together with any timetables and
projections, including but not limited to, the Acquirer's annual production forecasts
and planned activities relating to manufacture with respect to the Relevant Product(s),
including any such activities contracted to a third party.
b. To the extent the following are prepared in the ordinary course of Acquirer's business,
-1-
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7
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ATTACHMENT 1
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EXTRACTED KEY WORDS
AGREEMENT ACQUIRER FDA APPROVALS COMMISSION SELL RESPONDENTS UNITED STATES PLANS BUSINESS PARTIES OBLIGATIONS TRUST AGREEMENT REPORTS REASON PURPOSE CONFIDENTIALITY APPROVAL ASSETS RELATING REQUEST MEETINGS DISCLOSE EMPLOYEE EXECUTE PRIOR MANUFACTURING THIRD PARTY PREPARATION ORDINARY COURSE TIMELY MANNER |
ATTACHMENT 1
This Agreement entered into this _______ day of December 2000 between FRANCIS J.
CIVILLE (the "Monitor Trustee") and HOFFMANN-LA ROCHE INC.(the "Acquirer"), referred
to herein collectively as "the parties," provides as follows:
WHEREAS the Federal Trade Commission (the "Commission") has accepted or will
shortly accept for Public Comment an Agreement Containing Consent Orders ("Consent
Agreement") with SmithKline Beecham plc ("SB") and Glaxo Wellcome plc ("GW") (where
"Respondents," as used herein, means SB and GW, individually and collectively), that contains an
Order to Maintain Assets and a Decision and Order, collectively hereinafter referred to as the
"Orders," which provide for, among other things, the appointment of a Monitor Trustee to ensure
that Respondents fully perform their obligations with respect to the Approval Assets (as defined in
the related Trust Agreement) under the Orders, and, at Respondents' expense, to monitor the
efforts of certain of the Acquirers of the Approval Assets to obtain all FDA approvals necessary
to manufacture and sell any Product included within the Approval Assets in or into the United
States ("Relevant Product(s)") in a diligent manner,
WHEREAS, the Orders further provide that Respondents shall execute a trust agreement
("Trust Agreement"), subject to the prior approval of the Commission, and confer all the rights,
authority and powers necessary to permit the Monitor Trustee to monitor the Respondents'
compliance with the terms of the Order and certain activities of the Acquirer, as may be
determined by the Commission, related to the transfer of the Relevant Products; and
WHEREAS, the parties to this Agreement intend to be legally bound;
NOW, THEREFORE, the parties agree as follows:
1. The Acquirer shall:
a. Provide the following to the Monitor Trustee no later than sixty (60) days after the
Closing Date:
i. the Acquirer's plan to obtain all necessary FDA approvals to manufacture and sell the
Relevant Product(s) divested pursuant to the Orders; and
ii. the Acquirer's business plan for developing, manufacturing and marketing of the
Relevant Product(s) in or into the United States, together with any timetables and
projections, including but not limited to, the Acquirer's annual production forecasts
and planned activities relating to manufacture with respect to the Relevant Product(s),
including any such activities contracted to a third party.
b. To the extent the following are prepared in the ordinary course of Acquirer's business,
-1-
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8
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TRUST AGREEMENT
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EXTRACTED KEY WORDS
RESPONDENTS TRUST AGREEMENT COMMISSION ASSETS PURSUANT OBLIGATIONS APPROVAL ASSETS CONSENT DIVESTITURE COMPLIANCE FRANCIS CIVILLE GLAXO WELLCOME PLC COMMISSION-APPROVED ACQUIRERS RESPONSIBILITIES UNITED STATES APPOINTMENT CONFIDENTIALITY FDA APPROVALS SMITHKLINE BEECHAM FEDERAL TRADE COMMISSION ASSETS PENDING INVENTORY PARAGRAPHS ORAL COMMUNICATION STATUTORY LAW DISAGREEMENT LIABILITY BINDING ARBITRATION |
TRUST AGREEMENT
This Trust Agreement ("Trust Agreement") entered into this ______day of
_______________________ by and among Francis J. Civille, SmithKline Beecham plc ("SB"),
and Glaxo Wellcome plc ("GW") (where "Respondents," as used herein, means SB and GW,
individually and collectively), provides as follows:
WHEREAS, the United States Federal Trade Commission (the "Commission") has
accepted or will shortly accept for Public Comment an Agreement Containing Consent Orders
incorporating a Decision and Order ("Decision and Order") and an Order to Maintain Assets, with
SB and GW (collectively, the "Orders"), which, among other things, require Respondents to
divest or transfer certain defined assets and maintain those assets pending such divestiture or
transfer, and provide for the appointment of one or more Monitor Trustees to ensure that
Respondents comply with their obligations under the Orders;
WHEREAS, the Commission may appoint Francis J. Civille as such trustee (the "Monitor
Trustee") pursuant to the Orders to monitor Respondents' compliance with the terms of the
Consent Agreement and Orders and with each of the Divestiture Agreements referenced in the
Orders, and to monitor the efforts of certain of the Commission-approved Acquirers (as defined in
the Orders) to obtain all necessary FDA approvals, as applicable, and Francis J. Civille has
consented to such appointment;
WHEREAS, the Orders further provide or will provide that Respondents shall execute a
trust agreement, subject to the prior approval of the Commission, conferring all the rights, powers
and authority necessary to permit the Monitor Trustee to carry out such duties and responsibilities
pursuant to the Orders;
WHEREAS, this Trust Agreement, although executed by the Monitor Trustee and SB and
GW is not effective for any purpose, including but not limited to imposing rights and
responsibilities on Respondents or the Monitor Trustee under the Orders, until it has been
approved by the Commission; and
WHEREAS, the parties to this Trust Agreement intend to be legally bound;
NOW, THEREFORE, the parties agree as follows:
1. Capitalized terms used herein and not specifically defined herein shall have the respective
definitions given to them in the Consent Agreement and the Orders. The term "Trust Assets"
means the assets identified in Paragraphs II.A., III.A., IV.A., V.A., VI.A., VII.A., VIII.A.,
and IX.A. of the Decision and Order. The term "Approval Assets" means the Kytril Assets,
the Famciclovir and Penciclovir Assets, and the Tazicef Assets.
2. The Monitor Trustee shall have all of the powers and responsibilities conferred upon the
1
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9
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ANALYSIS
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EXTRACTED KEY WORDS
GLAXO DRUGS HERPES MERGER PROPOSED CONSENT ORDER CEFTAZIDIME INTELLECTUAL PROPERTY RIGHTS PROPHYLACTIC HERPES VACCINE AGREEMENT ANTICOMPETITIVE EFFECTS SMITHKLINE INTELLECTUAL PROPERTY ANTIEMETIC DRUGS NOVARTIS DENAVIR PHARMACEUTICALS WORLDWIDE RIGHTS INTELLECTUAL PROPERTY RELATING ABBOTT LABORATORIES OTC H-2 BLOCKER COMMISSION BASE ACTIVE INGREDIENT ORAL HERPES H-2 BLOCKER DEVELOPMENT EFFORTS DISC TECHNOLOGY IBS MIGRAINE HEADACHES COMPETITION |
_________________________________________________________________
ANALYSIS OF
PROPOSED CONSENT ORDER TO AID PUBLIC COMMENT
_________________________________________________________________
The Federal Trade Commission ("Commission") has accepted, subject to
final approval, an agreement containing a proposed Consent Order from
Glaxo Wellcome plc ("Glaxo") and SmithKline Beecham plc ("SB") which
is designed to remedy the anticompetitive effects of the merger of
Glaxo and SB. Under the terms of the agreement, the companies would be
required to: (1) divest all of SB's worldwide rights and intellectual
property relating to its antiemetic drug, Kytril, to F. Hoffman
LaRoche; (2) divest SB's intellectual property rights to manufacture
and market ceftazidime to Abbott Laboratories; (3) divest SB's
worldwide rights and intellectual property relating to its antiviral
drugs, Famvir and Denavir, including the rights to the base active
ingredients, penciclovir and famciclovir, to Novartis Pharm AG and
Novartis Pharmaceuticals Corporation; (4) return to Cantab
Pharmaceuticals plc all rights to use Cantab's DISC technology for the
development of a prophylactic herpes vaccine; (5) divest Glaxo's U.S.
and Canadian Zantac trademark rights to Pfizer (formerly
Warner-Lambert) and thereby remove restrictions on the ability of
Pfizer's Zantac 75 to compete in the over-the-counter ("OTC") H-2
blocker acid relief market; (6) assign all of SB's relevant
intellectual property rights and relinquish all options to the drug
renzapride, a drug to treat irritable bowel syndrome, to Alizyme plc;
(7) assign all of Glaxo's relevant intellectual property rights and
relinquish all of Glaxo's reversionary rights to GI147211C, a
topoisomerase I inhibitor to treat certain types of cancer, to Gilead
Sciences, Inc.; and (8) assign all of SB's relevant intellectual
property rights and relinquish all options to regain control over
frovatriptan, a drug to treat migraine headaches, to Vernalis Ltd.
The proposed Consent Order has been placed on the public record for
thirty (30) days for receipt of comments by interested persons.
Comments received during this period will become part of the public
record. After thirty (30) 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
Consent Order.
Pursuant to a scheme of arrangement announced on January 17, 2000,
Glaxo and SB propose to combine their two companies in a transaction
valued at approximately $182 billion. Thereafter, the merged entity
will be renamed Glaxo SmithKline plc. The proposed Complaint alleges
that the proposed merger, if consummated, would constitute a violation
of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and
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