Gulf & Western Industries, Inc

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IN THE MATTER OF GULF & WESTERN INDUSTRIES, INC.

CONSENT ORDER, ETC. , IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT AND SEC. 7 OF THE CLAYTON ACT Docket 9153. Complaint, March 25, 1981-Decision April 1983 This consent order requires a New York City corporation engaged in the b1:rial casket industry, among other things, to timely divest to a Commission-approved buyer Alabama Indiana Metal Products, Inc., located in Anniston, Alabama. The order also requires the corporation to permit prospective purchasers to inspet the AnnistoD facility and supply them with information concerning the facility s operation. Further, the corporation is barred from acquiring any stock or interest in any concern engaged in the manufacture or sale of burial caskets or their components without prior Commission approval for a period of ten years. Appearances For the Commission: Robert W Doyle, Jr., Michael E. Antalics Debra A. Simmons and Randall D. Marks. For the respondent: Robert L. Jones in-house counsel, New York City and Charles E. Koob, Simpson, Thacher Bartlett New York City.

COMPLAINT The Federal Trade Commission, having reason to believe that the above-named respondent, subject to the jurisdiction of the Commission, has acquired the stock or assets, as hereinafter described, of corporations subject to the jurisdiction of the Commission, in violation of Section 7 of the Clayton Act, as amended (15 U . C. 18), and Section 5 of the Federal Trade Commission Act, as amended (15 U. 45), and that a proceeding in respect thereof would be in the public interest, hereby issues its Complaint pursuant to Section 11 of the Clayton Act (15 U. C. 21), and Section 5(b) of the Federal Trade Commission Act (15 U. C. 45(b)), stating its charges as follows: I. DEFINITIONS (1 For the purposes of this Complaint, the following definitions shall apply:

708 EDERAL TRADE COMMISSION DECISIONS Gomplain 101 F.

(a) A burial casket is a container used to display, transport and bury the deceased.

(b) A burial casket metal knockdown (KD) is an unassembled metal casket side, end, bottom, top or lid, and bridge, which, when assembled, is referred to as a burial casket shell. 11. GULF & WESTERN INDUSTRIES, INC.

(2) Respondent, Gulf & Western Industries, Inc. ("G& W"), is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business located at 1 Gulf & Western Plaza, New York, New York.

(3) G& W achieved entry into the burial casket industry in 1978 through its acquisition of Simmons Company and its subsidiary, Simmons Casket Company ("Simmons (4) Prior to its acquisition by G&W, Simmons Company was a Delaware corporation with its principal place of business located at Jones Bridge Road, Box 49000, Atlanta, Georgia. (5) In 1979 G&W, ranking 52nd on Fortune magazine s list of the 500 largest industrial corporations, had sales in excess of$5.2 billon assets in excess of $5.1 billon, and net income in excess of $227 million.

(6) In 1979 G&W was the second largest manufacturer of burial caskets in the United States, with sales of approximately $57 millon and was also a substantial manufacturer of KDs. (7) At all times relevant herein, G&W sold or shipped its products and services throughout the United States, was engaged in or affected commerce within the meaning of the Clayton Act, as amended, and was engaged in or affected commerce within the meaning of the Federal Trade Commission Act, as amended.

COUNT I III. NATIONAL CASKET CO.

(8) Prior to its acquisition by G&W, National Casket Co. ("National Casket") was a wholly-owned subsidiary of Walco National Corporation ("Walco ). W alco is a corporation organized and existing under the laws ofthe State of New York, with its principal place of business located at 743 Fifth Avenue, New York, New York. The principal place of business of National Casket is located at 355 Commonwealth Avenue, Boston, Massachusetts.

(9) Prior to its acquisition by G&W, National Casket was engaged in the manufacture ofits and in the manufacture and sale of burial .. , . .

\.UDJ.' tJ rrJ.IJJ.J..lU, u,.."-'- 707 Complaint caskets. In 1979 National Casket ",as the third largest manufacturer of burial caskets with sales of approximately $25.5 milion and was a substantial manufacturer of KDs.

(10) At all times relevant herein, National Casket sold or shipped its products and services throughout the United States, was engaged in or affected commerce within the meaning of the Clayton Act, as amended, and was engaged in or affected commerce within the meaning of the Federal Trade Commission Act, as amended. IV. THE ACQUISITION (11) On or about April 17, 1980, G&W acquired the burial casket business ofWalco for approximately $12.5 milion. Under the terms of the agreement, G&W purchased all of the principal assets ofNational Casket, including inventory, manufacturing equipment and accounts receivable. The sale also included the transfer ofleasehold rights to National Casket's manufacturing facility located in Lancaster, Kentucky and its various warehouses and sales outlets. v. TRADE AND COMMERCE the relevant lines of (12) For purposes of Count I of this Complaint, commerce are the following:

(a) The manufacture and sale of burial caskets in the United States the burial casket market"); and (b) The production ofits in the United States by KD manufacturers, including burial casket manufacturers ("the KD production market").

(13) In 1979 approximately 1.8 milion burial caskets were sold to funeral directors in the United States. Total 1979 dollar sales ofburial caskets to funeral directors were approximately $543 milion. (14) Prior to the National Casket acquisition, G&W and National Casket were substantial actual competitors in the burial casket market.

(15) In 1979 G& W was the second largest manufacturer and seller of burial caskets, with a market share of approximately 10%. (16) In 1979 National Casket was the third largest manufacturer and seller of burial caskets, with a market share of approximately 5%.

(17) Concentration in the burial casket market is high. (18) There is a trend toward increasing concentration in the burial casket market and the acquisition of National Casket by G&W has increased the level of concentration in the market. Complaint 101 F.

(19) Barriers to entry into the burial casket market are substantial. (20) Within the KD production market, the value of all KDs produced in 1979 was in excess of approximately $70 milion. (21) Within the KD production market, G&W and National Casket were substantial actual competitors prior to the acquisition, with approximately 22.4 and 5.6 percent of 1979 KD production, respectively.

(22) Within the KD production market, concentration is high. (23) Within the KD production market, there is a trend toward increasing concentration and the acquisition of National Casket by G&W has increased the level of concentration. (24) Barriers to entry into the KD production market are substantial.

VI. EFFECTS OF THE ACQUISITION (25) The effect of the aforesaid acquisition may be substantially to lessen competition or to tend to create a monopoly in the burial casket market and in the KD production market in violation of Section 7 of the Clayton Act, as amended (15 U. C. 18), and Section 5 of the Federal Trade Commission Act, as amended (15 U. C. 45), in the following ways, among others:

(a) The ability ofG&W' s competitors to compete in the burial casket market and in the KD production market has been or may be substantially diminished;

(b) Substantial actual and potential competition in the burial casket market and in the KD production market between G&W and National Casket has been or may be eliminated;

(c) G&W's position in the burial casket market and in the KD production market has been or may be further strengthened and entrenched at the expense ofG&W' s actual and potential competitors; (d) Barriers to entry into the burial casket market and into the KD production market have been or may be significantly raised; and (e) The levels of concentration in the burial casket market and in the KD production market have been or may be increased, and the trends toward increased concentration in these markets have been or may be accelerated.

VII. THE VIOLATION CHARGED (26) The aforesaid acquisition constitutes a violation of Section 7 of the Clayton Act, as amended, and Section 5 of the Federal Trade Commission Act, as amended.

lJUL.r 00 "LJ"-"' ~h. --- 707 Complaint COUNT II VIII. WALLACE METAL PRODUCTS, INC.

(27) Prior to its acquisition by G&W, Wallace Metal Products, Inc. Wallace ), a corporation organized under the laws of the State of Indiana, was engaged in the manufacture and sale of KDs. Wallace principal place of business is South Eighth & 0 Street, Box 70, Richmond, Indiana.

(28) Prior to its acquisition by G&W, Wallace was engaged in the manufacture and sale of KDs. In 1979 Wallace had KD sales of approximately $10.1 milion.

(29) At all times relevant hereto, Wallace sold or shipped its products throughout the United States and was engaged in or affected commerce within the meaning of the Clayton Act, as amended, and was engaged in or affected commerce within the meaning of the Federal Trade Commission Act, as amended.

IX. THE ACQUISITION (30) On or about October 2, 1979 G& W acquired substantially all of the assets of Wallace, for approximately $4.0 milion, including inventory, machinery and equipment, accounts receivable and real property located at its two KD manufacturing plants in Richmond, Indiana and Anniston, Alabama. G&W assumed certain of Wallace s liabilties amounting to approximately $5.0 milion. x. TRADE AND COMMERCE (31) For the purposes of Count II ofthis Complaint, the relevant line of commerce is the production of KDs in the United States by KD manufacturers, including burial casket manufacturers ("the KD production market"

(32) Within the KD production market, the value of all KDs produced in 1979 was in excess of approximately $70 million. (33) Within the KD production market, G&W and Wallace were substantial actual competitors prior to the acquisition, accounting for approximately 9.3 and 13.1 percent of the 1979 KD production market, respectively.

(34) Within the KD production market, concentration is high. (35) Within the KD production market, there is a trend toward increasing concentration and the acquisition of Wallace by G&W has increased the level of concentration.

Decision Order 101 F. (36) Barriers to entry into the KD production market are substantial.

XI. EFFECTS OF THE ACQUISITION (37) The effect of the aforesaid acquisition may be substantially to lessen competition or to tend to create a monopoly in- the KD production market and the finished burial casket market in violation of Section 7 ofthe Clayton Act, as amended (15 U.s.C. 18), and Section 5 ofthe Federal Trade Commission Act, as amended (15 U. C. 45), in the following ways, among others:

(a) The ability of G&W's competitors to compete in the production market has been or may be substantially diminished; (b) Substantial actual and potential competition in the production market between G&W and Wallace has been or may be eliminated;

(c) G&W' s position in the KD production market and in the burial casket market has been or may be further strengthened and entrenched at the expense ofG&W's actual and potential competitors; (d) Barriers to entry into the KD production market have been or may be significantly raised; and (e) The level of concentration in the KD production market has been or may be increased, and the trend toward increased concentration in this market has been or may be accelerated. XII. THE VIOLATION CHARGED (38) The aforesaid acquisition constitutes a violation of Section 7 of the Clayton Act, as amended, and Section 5 of the Federal Trade Commission Act, as amended.

DECISION AND ORDER The Commission having heretofore issued its complaint charging the respondent named in the caption hereof with violation of Section 7 of the Clayton Act, as amended, and Section 5 ofthe Federal Trade Commission Act, as amended, and the respondent having been served with a copy of that complaint, together with a notice of contemplated relief; and The respondent, its attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the complaint, a statement that the signing or said agreement is for GULF & WESTERN INDUSTRIES, INC. 713 707 Decision -and Order settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complait, and waivers and other provisions as required by the Commission s Rules; and The Secretary ofthe Commission having thereafter withdrawn thi matter from adjudication in accordance with Section 3.25(c) of its Rules; and The Commission having considered the matter and having thereupon accepted the executed consent agreement and placed such ageement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 3.25(f) of its Rules, the Commission hereby makes the following jurisdictional findings and enters the following order:

1. Respondent Gulf & Western Industries, Inc. is a corporation organized, existing and doing business under and by virtue ofthe laws of the State of Delaware, with its offce and principal place of busines located at 1 Gulf & Western Plaz, in the City of New York, State of New York.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER It is ordered That for the purpos of this Order the following definitions shall apply:

1. G& or Respondent means Gulf & Western Industries, Inc., a corporation organized, existing, and doing business under the laws of the State of Delaware, with its principal offces at 1 Gulf & Western Plaz, New York, New York, as well as its offcers, employees, agents its parents, diviions, subsidiaries, affiliates! successors, assign, and the offcers, employees or agents ofG&W' s parents, divisions, subsidiaries, affiliates, successors, or asig.

2. Gulf & Western Casket Corporation, a subsidiary of G&W, is engaged in the burial casket industry through various subsidiaries and divisions.

3. Anniston means the Anniston, Alabama facilty of Alabama- I For puroses of this Order, the termaffliafes shall mean any entity over wllch Gulf & Western IndUBes, Inc. exercises control. The tenncontrol shal mean the diredion or causing the direction Qrthe management and policies of an entity, in any way.

Decision and Order 101 F.T.C Indiana Metal Products, Inc., a subsidiary ofG&W. Anniston, at the time of divestiture, shall include the assets listed in Appendix A. 4. The term burial casket means a container used to display, transport and bury the deceased.

5. The term KD means an unassembled metal burial casket side end, bottom, top or lid, and bridge which when assembled is referred to as a burial casket shell.

6. The term burial casket shell means a metal burial casket which has not been finished or trimmed with the requisite cloth interiors decorative exterior hardware, and other finishings. 7. Eligible person means any individual, corporation (including subsidiaries thereof), partnership, joint venture, trust, unincorporated association, other business or legal entity, or any combination thereof approved in advance by the Commission.

II.

It is further ordered That G&W shall divest absolutely and unqualifiedly the Anniston facility to an eligible person within one hundred and eighty (180) days from the date of the issuance of this Order. II.

It is further ordered That divestiture under Paragraph II shall be in a manner which preserves the assets and business divested as a viable, ongoing, competitor in the KD market. IV.

It is further ordered, That, pending the divestiture required by Paragraph II of this Order, G&W wil continue to operate Anniston and shall not take any action, other than in the ordinary course of business, without the consent of the Federal Trade Commission, to inhibit the ability of Anniston to operate as a viable competitor in the KD market.

It is further ordered That G& W provide prospective purchasers with all information concerning the operations of Anniston requested by such purchasers and permit any inspections that may be required. 707 Decision and Order VI.

It is further ordered That, for a period of ten (10) years from the date of issuance of this Order, G& W shall not, directly or indirectly, acquire any stock or share capital of, interest in, or assets used in the manufacture of burial caskets or KDs in the United States by any concern, corporate or non-corporate, engaged in the manufacture or sale of burial caskets or KDs in the United States without the prior approval of the Federal Trade Commission. VII.

It is further ordered That G&W shall, within sixty (60) days from the date of issuance ofthis Order, and every sixty (60) days thereafter until the divestiture is completed, submit in writing to the Commission a report setting forth in detail the manner and form in which G&W intends to comply, is complying, and has complied with the terms of this Order and such additional information relating thereto as may from time to time reasonably be required. All such reports shall include a summary of contacts or negotiations with anyone for the specified assets, the identity of all such persons, and copies of all written communications to and from such persons. VII It is further ordered That for a period often (10) years from the date of issuance ofthis Order, G&W shall notify the Commission at least thirty (30) days prior to any change in G&W which affects compliance with the obligations arising out of this Order, such as dissolution asignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation.

APPENDIX A This Appendix A is annexed to and made a part of this Order in Docket No. 9153. For purposes of this Order, Anniston shall mean: all assets, properties, titles for properties, interests, rights and privileges of whatever nature, tangible and intangible, located at the Anniston facility on the date of this Order, including, but not limited to, all real property, buildings, machinery, equipment, raw materials, inventory, dies and flxtures as described below, presses, as well as all G& W customer lists relating to tile sale ofits, copies of all G&W KD sales invoices describing KD sales processed ough Anniston and every other G&W KD facility since January 1 1982, trade names, trademarks, patents, patent apphcations, orders for purchase, and all other property owned or operated at the Anniston facilty on said date, except that after the date of this Order, G&W may enter into transactions in the ordinary course of business. Decision and Order 101 F. On the date of the Order, the asets described above shall include, but shall not be limited to:

One Cincinnati 500-ton Press, serial number 38743 One Dallas Feeder for use in connection with the Cincinnati 500ton Press, serial number 38743 One Rowe Reel for use in connection with the Cincinnati 500-ton Press, serial number 38743 One Cincinnati 50D-ton Press, serial number 39051 One Version 1 OOOton Press, serial number 25172 One Niagara Shear, serial number 61373 One Tannwitz Saw, serial number 15883 One Foley Saw Filer, Model 387 One Rokwell Drill Press One Thorbob Bench Grinder One Peer Spot Welder, serial number 13435 One Lincoln Arc Welder, serial number 246886 One Lincoln Arc Welder, serial number 246794 One Quincy Air Compresor, scrial number 954830-L One Catch Hole Punch Press One Baron Blakelslee Degreascr One Chicago D&K 150-ton Flange Brake, serial number P96B7 One Chicago D&K Power Brake, serial number L17540 Three Semi-automatic Body Saws One Round Corner "A" Punch, serial number 40720 One Square Corner "A" Punch, serial number 50968 One Welty-Weigh Uncoiler, serial number UC7792 One Welty-Weigh Slitter, serial number 67707 One Welty-Weigh Stacker, serial number SC7703 One Boy Side Panel Punch Unit One Ingersoll Rand Air Compresor, serial number 23408 One stel coil crane system One basket and rack system One scrap conveyor system Five forklift Dies and fixtures suffcient to make the following part numbers, or such other dies and fixtures agee to by an eligible person: Tops Bodies Bridges 140 28 A Steel 427 Copper, Bronze 499 50 A Stel 700 Embosed Copper, Bronze 750 27 A Stel 70 Emboed 427 A Copper, Bronze 427 A Embossed 200 A Stel, Copper 32 A 490 A =# 1 Oversize 35 A 750 A 32 A 37 A 770 A 35 A 37 A Embossd 790 A 37 A 38A 809 A Steel 38 A 37 A Stanless Copper, Bronze Stel 990 Steel , \JUL.!' oc VVJ'.:IJ'n.l'j H'IUU.:1J:lJ'u, U'I\.. 707 Decision and Order Tops Boies Bridges Full Couch Cap Copper, Bronze Steel. Copper 427 A Stainless Stel Bronz 110 200 Half Couch Cap 120 # 1 Oversize 150 Cap ovals 28-AR 180 B09-AR and bottom filler plates Bottom Universal , Interlocutory Order 101 F.