FTC Approves BASF's Application to Extend Manufacturing Agreement Related to 2009 Acquisition of Ciba; FTC Approves ConocoPhillips' Application to Modify Final Commission Order and to Amend Licensing Agreements with Holly Corp.

FTC Approves BASF's Application to Extend Manufacturing Agreement Related to 2009 Acquisition of Ciba

The Federal Trade Commission has approved an application by global chemical company BASF SE to extend a manufacturing agreement, entered into in compliance with a 2009 settlement order, which imposed certain requirements on BASF's acquisition of rival Ciba Holding, Inc.

BASF had requested FTC approval to extend an agreement with Dominion Colour Corp., which acquired Ciba's indanthrone blue (IB) high performance pigment business in January 2010. The FTC settlement order required that the Ciba IB pigment business be sold in order to resolve competition concerns about BASF's purchase of Ciba. The order also required BASF to enter an agreement – known as a toll manufacturing agreement – to make IB pigment for the acquiring company for up to 30 months to help the acquirer transition production to its own facility.

The FTC approved Dominion as the acquirer of the IB pigment business on December 4, 2009, and also approved the toll manufacturing agreement between BASF and Dominion. The toll agreement will expire in the near future unless it is extended, and the two companies have agreed on an extension. Under the settlement, an extension requires the FTC approval.

The Commission vote approving the application was 4-0. Copies of BASF's application can be found on the FTC's website. (FTC File No. 081-0265; Docket No. C-4253; the staff contact is Daniel P. Ducore, Bureau of Competition, 202-326-2526; see press release April 2, 2009.)

FTC Approves ConocoPhillips' Application to Modify Final Commission Order and to Amend Licensing Agreements with Holly Corp.

The Federal Trade Commission has approved an application by ConocoPhillips to reopen and modify a final FTC order that settled the agency's competition concerns arising from Conoco Inc.'s 2002 merger with Phillips Petroleum Company. The FTC has also approved a change to the license agreement that ConocoPhillips has with Holly Corporation, an independent oil refining company. The changes approved by the Commission allow ConocoPhillips and Holly to make the licensing of the "Phillips" and "Phillips 66" brands non-exclusive in two states for the last two years of the FTC-required agreement between them.

As described in the application, the Commission's order required ConocoPhillips to sell to Holly Corp. a petroleum refinery in Woods Cross, Utah, and to enter into a 10-year exclusive license allowing Holly to use "Phillips," "Phillips 66," and related brands at retail gasoline stations in Utah, Idaho, Wyoming, and Montana. ConocoPhillips sold the Woods Cross refinery to Holly in compliance with the FTC order, and the current agreements between ConocoPhillips and Holly include the required exclusive rights.

According to the application, ConocoPhillips and Holly have negotiated an extended agreement that continues the license agreement for seven years in the four states on a non-exclusive basis. As part of those negotiations, Holly and ConocoPhillips entered into an amended agreement that would convert Holly's Commission-ordered license in Wyoming and Montana from an exclusive license to a non-exclusive license for the two years remaining in the current license. Accordingly, ConocoPhillips requested that the FTC reopen and modify the order to match the terms of the new agreement with Holly by removing the exclusivity requirement in Wyoming and Montana and approve the new agreement. Holly supported the application, which the FTC has now approved.

The Commission vote approving the application was 4-0. (FTC File No. 021-0040, Docket No. C-4058; the staff contact is Daniel P. Ducore, Bureau of Competition, 202-326-2526; see press release dated June 27, 2011.)

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(FYI 44.5.2011.wpd)