Allied Corporation

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IN THE MATTER OF ALLIED CORPORATION CONSENT ORDER IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT AND SEC. 7 OF THE CLAYTON ACT Docket C-3109. Complaint, May 1983-Decision, May, 1983 This consent order requires a Morristown, N.J. producer and seller ofthree high-purity acids, among other things, to divest Hi-Pure Chemicals, Inc. (Hi-Pure) within 15 months from the effective date of the order. Hi-Pure, acquired from Fisher Scientific Company (Fisher), must be divested absolutely and in good faith as a viable business conccrn to a Commission-approved buyer. Further, respondent is required to grant Hi-Pure s acquirer a ten-year royalty-free nonexclusive license to patents owned or applied for by Fisher which are used by Hi-Pure in the manufacturing or packaging of any of the three high-purity acids. Additionally, the company is barred for a period often years from acquiring any business entity engaged in the manufacturing or packaging of high-purity acids, without prior Commission approval Appearances For the Commission: Rendell A. Davis, Jr. For the respondent: Bertram M Kantor, Wachtel, Lipton, et aI. New York City and Brian C. Mohr, Shadden, Arps, Slate, Meager & Flam New York City.

COMPLAINT The Federal Trade Commission, having reason to believe that Allied Corporation ("Alled"), a corporation subject to the jurisdiction of the Commission, intends to acquire the Fisher Scientific Company ("Fisher ) and Fisher s wholly-owned subsidiary, Hi-Pure Chemicals, Inc. ("Hi-Pure ), both corporations 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 ofthe Federal Trade Commission Act, as amended, 15 U. C. 45, and that a proceeding in respect thereof would be in the public interest, hereby issues this complaint, pursuant to Section 11 of the Clayton Act, as amended, 15 C. , and Section 5(b) of the Federal Trade Commission Act, as amended, 15 U. 45(b), stating its charges as follows:

Complaint 101 F.

I. Definition 1. For the purposes of this complaint the following definition shall apply: high-purity acid means any nitric acid, hydrochloric acid, or hydrofluoric acid which is suitable for use in laboratories or in semiconductor manufacturing facilities.

II. Alled 2. Allied is a corporation organized and existing under the laws of the State of New York with its principal offce at Columbia Road and Park Ave., Morristown, N.

3. Alled is a diversified company engaged in the production and sale of chemicals, plastics, oil, gas, electrical products, refractories seat belts and other products.

4. Allied is one ofthe leading manufacturers in the production and sale of high-purity acid in the United States. 5. In 1980, Allied had total sales of approximately $5.5 bilion and total assets of approximately $4.5 bilion. III. Fisher 6. Fisher is a corporation organized and existing under the laws of the Commonwealth of Pennsylvania with its principal offce at 711 Forbes Avenue, Pittsburgh, Pennsylvania.

7. Fisher produces and sells laboratory equipment and laboratory chemicals.

8. In 1980, Fisher had net sales of approximately $424 milion and total assets of approximately $190 milion. IV. Hi-Pure 9. Hi-Pure is a corporation organized and existing under the laws of the Commonwealth of Pennsylvania with its principal offce at R.D. No. 3 (Edelman), Nazareth, Pennsylvania.

10. Hi-Pure is a wholly-owned subsidiary of Fisher. 11. Hi-Pure manufactures and sells substantial quantities of highpurity acid.

12. In 1980, Hi-Pure had net sales of approximately $4.5 million (including sales to Fisher) and total assets of approximately $1.9 million.

V. Jurisdiction 13. At all times relevant herein Allied, Fisher, and Hi-Pure have been engaged in the production and sale of high-purity acid in interstate commerce and Alled, Fisher, and Hi-Pure are engaged in commerce as "commerce" is defined in the Clayton Act, as amended, 15 ALLIED CORP. 723 721 Complaint U . C. 12 et seq. and each is a corporation whose business is in or affects commerce as "commerce" is defined in the Federal Trade Commission Act, as amended, 15 U. C. 41 et seq. VI. The Acquisition 14. On or about July 30, 1981, Alled announced a tender offer for 47% ofthe outstanding common stock and all ofthe 8-1/2% convertible subordinated debentures of Fisher. On or about July 30, 1981 Alled and Fisher entered into an agreement which provides inter alia for the acquisition of Fisher by Allied. VII. Trade and Commerce 15. The relevant lines of commerce are the manufacture and sale of high-purity nitric acid, the manufacture and sale of high-purity hydrochloric acid, and the manufacture and sale of high-purity hydrofluoric acid.

16. The relevant section ofthe country is the entire United States. VIII. Actual Competition 17. Alled and Hi-Pure are now and have been for many years actual competitors in the manufacture and sale of high-purity acid. IX. Effects 18. The effects of the proposed acquisition may be substantially to lessen competition or to tend to create a monopoly in the relevant markets in violation of Section 7 of the Clayton Act, as amended, 15 C. 18, and the acquisition constitutes an unfair method of competition and unfair act or practice within the meaning of Section 5 of the Federal Trade Commission Act, as amended, 15 U. C. 45, in the following ways, among others:

(a) substantial actual competition between Alled and Hi-Pure in the relevant markets may be eliminated;

(b) substantial actual competition among competitors generally in the relevant markets may be lessened;

(c) concentration in the relevant markets may be increased and the possibilities for eventual deconcentration may be diminished; (d) mergers or acquisitions between other high-purity acid producers in the relevant markets may be fostered, thus causing a fur.h substantial lessening of competition or tendency toward monopoly in such markets; and (e) barriers to entry into the relevant markets may be increased. Decision and Order 101 F. X. Violations Charged 19. By reason of the foregoing, the proposed acquisition by Allied asof Fisher constitutes a violation of Section 7 of the Clayton Act, amended, 15 C. , and of Section 5 of the Federal Trade Commission Act, as amended, 15 U. C. 45.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of the acquisition of Fisher Scientific Company by Alled Corporation and the respondent 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 violation of the Clayton Act and the Federal Trade Commission Act; 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 aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent 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 respondent has violated the said Acts and that 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 fied thereafter by interested persons pursuant to Section 2. of its Rules, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Alled Corporation is a corporation organized, existing, and doing business under and by virtue ofthe laws ofthe State of New York with its offces and principal place of business located at Columbia Road & Park Ave., Morristown, N.

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.

. ._ 721 Decision and Order ORDER For purposes of this Order (a) respondent means Alled Corporation, its subsidiaries, affliates divisions, successors, and assigns;

(b) Hi-Pure means Hi-Pure Chemicals, Inc. and also means all assets of Fisher Scientific Company, and its subsidiaries, affliates, and divisions, which are located at Nazareth, Pennsylvania and which are used in the manufacture or sale of high-purity acid; (c) Fisher Scientific Companymeans Fisher Scientific Company and its subsidiaries, affliates and divisions; and (d) high-purity acid means any nitric acid, hydrochloric acid, or hydrofluoric acid which is suitable for use in laboratories or in semiconductor manufacturing facilties.

It is ordered, That, within 15 months from the date on which this Order becomes final and subject to the prior approval of the Federal Trade Commission, respondent shall divest absolutely and in good faith all of Hi-Pure as a viable business concern to a third party that represents that it intends to use the assets of Hi-Pure in the manufacture, distribution or sale of high-purity acid in the United States. Pending divestiture, respondent shall neither make nor permit any deterioration of Hi-Pure, except for normal wear and tear, that may impair its operating abilities, competitive viability or market value. It is further ordered, That in connection with any divestiture made pursuant to Paragraph I of this Order, respondent wil grant to the acquirer of Hi-Pure a royalty-free nonexclusive license for a term of ten years to all patents owned or applied for by Fisher Scientific Company on the date that this Order becomes final and which on said date are used by Hi-Pure in the manufacture or packaging of highpurity acid.

It is further ordered, That respondent, for a period often (10) years from the date this Order shall become final, shall not acquire, directly or indirectly, without the prior approval of the Federal Trade Commission, any assets of Or any stock interest in any company engaged Decision and Order 101 F. in the manufacture of high-purity acid in the United States (other than products, machinery, and equipment sold by any such company in the normal course of business and nonexclusive patent and knowhow licenses); provided, however nothing in this Paragraph III prohibits respondent from acquiring stock for investment purposes only which does not exceed one (1) percent of the outstanding shares of equity securities in any such corporation. As used in the preceding sentence, the phrase assets shall refer to assets relating to the manufacture or sale of high-purity acid in or to the United States. It is further ordered That within sixty (60) days after the date this Order becomes final, and every sixty (60) days thereafter until respondent has fully complied with the provisions of Paragraph I of this Order, respondent shall submit to the Federal Trade Commission a verified written report setting forth in detail the manner and form in which it intends to comply with, is complying with, or has complied with that provision. All such reports shall include, among other things that are required from time to time, a full description of contacts or negotiations with any party for the sale of properties specified in Paragraph I of this Order, and the identity of all such parties. Respondent shall furnish to the Commission copies of all written communications to and from such parties, and all internal memoran- , reports, and recommendations concerning divestiture. On the first anniversary of the date this Order becomes final and on every anniversary date thereafter for the following nine (9) years respondent shall submit to the Commission a verified written report setting forth the manner and form in which it has complied or is complying with this Order.

It is further ordered That respondent notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent, such as dissolution, assignment or sale resulting in the emergence of a successor corporation, or any other proposed change in the corporation, which may affect compliance obligations arising out of this Order.

Commissioner Douglas did not participate. Chairman Miller voted in the negative.

727 Modifying Order