9910237

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
RHODIA, a corporation,
DONAU CHEMIE AG, a corporation, and
ALBRIGHT & WILSON PLC, a corporation.

Docket No. C-3930
ORDER TO MAINTAIN ASSETS

The Federal Trade Commission ("Commission"), having initiated an investigation of the proposed acquisition by Rhodia of Albright & Wilson PLC, a subsidiary of Donau Chemie AG, 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 Order ("Consent Agreement"), containing an admission by Respondents 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 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 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 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 determined to accept the executed Agreement Containing Consent Orders and to place such 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:

• Rhodia is a corporation organized, existing and doing business under and by virtue of the laws of France, with its office and principal place of business located at 26, quai Alphonse Le Gallo, 92512 Boulogne-Billancourt Cédex, France.
• Donau is a corporation organized, existing and doing business under and by virtue of the laws of Austria, with its office and principal place of business located at Am Heumarkt 10, A-1037, Vienna, Austria.
• Albright & Wilson 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 210-222 Hagley Road West, Oldbury, West Midlands, B68 ONN, England.
• The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of Respondents, and the proceeding is in the public interest.

ORDER
I.

IT IS ORDERED that, as used in this Order to Maintain Assets, the following definitions shall apply:

A. "Rhodia" means Rhodia, its directors, officers, employees, agents, representatives, successors, and assigns; its subsidiaries, divisions, groups, and affiliates controlled by Rhodia, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

B. "Albright & Wilson" means Albright & Wilson PLC, its directors, officers, employees, agents, representatives, successors, and assigns; its subsidiaries, divisions, groups, and affiliates controlled by Albright & Wilson, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

C. "Donau" means Donau Chemie AG, its directors, officers, employees, agents, representatives, successors, and assigns; its subsidiaries, divisions, groups, and affiliates controlled by Donau, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

D. "Commission" means the Federal Trade Commission.

E. "Respondents" means Rhodia, Albright & Wilson, and Donau, respectively and collectively.

F. "Acquisition" means the Proposed Acquisition by Rhodia of Albright & Wilson as described in the March 30, 1999 Heads of Agreement and March 30, 1999 Call Option Agreement between Rhodia and Donau.

G. "PCS" means Potash Corporation of Saskatchewan Inc., its subsidiaries, divisions, groups, and affiliates controlled by PCS, including, but not limited to, PCS Phosphate Company, Inc.

H. "Purified Acid Joint Venture" or "Joint Venture" means the joint venture between Albright & Wilson and PCS, established pursuant to the July 29, 1988, General Partnership Agreement between Albright & Wilson Americas Inc. and Texasgulf, Inc., as amended.

I. "Aurora Plant" means the Joint Venture's plant in Aurora, North Carolina which manufactures purified phosphoric acid.

J. "Cincinnati Plant" means the Joint Venture's manufacturing plant in Cincinnati, Ohio which manufactures phosphate salts and blends of phosphoric acid.

K. "Joint Venture Phosphoric Acid" means the phosphoric acid that is produced at the Aurora Plant and sold by the Purified Acid Joint Venture, including all grades and types of phosphoric acid that are or have been produced and sold by the Joint Venture.

L. "Cincinnati Products" means the phosphoric acid blends and phosphate salts produced at the Cincinnati Plant.

M. "Albright & Wilson Phosphate Salts" means phosphate salts that currently are or have been manufactured and/or sold by Albright & Wilson.

N. "Joint Venture Products" Means Joint Venture Phosphoric Acid and Cincinnati Products.

O. "Albright & Wilson Interest" means the interest in the Purified Acid Joint Venture that is owned or controlled by Albright & Wilson.

P. "PCS Divestiture Agreement" means the agreements between Rhodia, Albright & Wilson, PCS and the Joint Venture by which Albright & Wilson has agreed to sell and PCS has agreed to acquire the Assets To Be Divested.

Q. "Intellectual Property" means any form of intellectual property relating to the research, development, manufacture or sale of Joint Venture Products, including, but not limited to, trademarks, patents, trade secrets, research materials, technical information, management information systems, software, inventions, test data, technological know-how, licenses, registrations, submissions, approvals, technology, specifications, designs, drawings, processes, recipes, protocols, formulas, customer lists, vendor lists, catalogs, sales promotion literature, advertising materials, quality control data, books, records, and files.

R. "Assets To Be Divested" means the assets, properties, business and goodwill, tangible and intangible, of the Joint Venture or of Albright & Wilson that relate to Joint Venture Products, including, but not limited to:

1. the Albright &Wilson Interest;

2. the Aurora Plant and the Cincinnati Plant, including all machinery, furniture, fixtures, tools and other tangible personal property;

3. all other assets, properties, business and goodwill, tangible and intangible, owned, leased or possessed by Albright & Wilson relating to Joint Venture Phosphoric Acid, including, but not limited to:

a. a royalty-free, non-exclusive license to all rights, title, and interest in and to Intellectual Property;

b. all rights, title, and interest in and to inventories of products, raw materials (to the extent requested by the acquirer), supplies and parts, including work-in-process and finished goods, relating to the research, design, development, manufacture, marketing or sale of Joint Venture Phosphoric Acid;

c. all rights, title, and interest in and to agreements, express or implied, relating to the research, design, development, manufacture, distribution, marketing or sale of Joint Venture Phosphoric Acid, regardless of whether such agreements relate exclusively to such purposes, including, but not limited to, warranties, guarantees, and contracts with joint venture partners, suppliers, sales representatives, distributors, agents, personal property lessors, personal property lessees, licensors, licensees, consignors, consignees, and customers; provided that, to the extent that any agreements relating to the sale of Joint Venture Phosphoric Acid also relate to the sale of phosphate salts, Respondents are not required to divest those portions of such agreements that relate to the sale of Albright & Wilson Phosphate Salts;

d. all rights, title and interest in and to permits and approvals relating to the research, design, development, manufacture, distribution, marketing or sale of Joint Venture Phosphoric Acid, regardless of whether such permits and approvals relate exclusively to such purposes, to the extent permitted by law;

e. all customer and vendor lists, catalogs, sales promotion literature and advertising materials relating to the research, design, development, manufacture, distribution, marketing, or sale of Joint Venture Phosphoric Acid;

f. all equipment, vehicles and transportation facilities related to Joint Venture Phosphoric Acid, except to the extent that such assets relate exclusively to the marketing or sale of Albright & Wilson Phosphate Salts;

g. all storage capacity related to Joint Venture Phosphoric Acid;

h. all rights, title and interest in and to owned or leased real property, together with appurtenances, licenses and permits related to Joint Venture Phosphoric Acid;

i. all rights under warranties and guarantees, express or implied, related to Joint Venture Phosphoric Acid;

j. all books, records, and files related to Joint Venture Phosphoric Acid; and

k. all items of prepaid expense related to Joint Venture Phosphoric Acid;

4. all other assets, properties, business and goodwill, tangible and intangible, owned, leased or possessed by Albright & Wilson relating to Cincinnati Products, including, but not limited to:

a. a royalty-free, non-exclusive license to all rights, titles, and interest in and to Intellectual Property;

b. all rights, title, and interest in and to inventories of products, raw materials (to the extent requested by the Acquirer), supplies and parts, including work-in-process and finished goods, relating to the research, design, development or manufacture of Cincinnati Products; provided, however, that Respondents are not required to divest inventories of finished and packaged Albright & Wilson Phosphate Salts;

c. all rights, title, and interest in and to agreements, express or implied, relating to the research, design, development or manufacture of Cincinnati Products, regardless of whether such agreements relate exclusively to such purposes, including, but not limited to, warranties, guarantees, and contracts with joint venture partners, suppliers, sales representatives, distributors, agents, personal property lessors, personal property lessees, licensors, licensees, consignors, consignees, and customers;

d. all rights, title and interest in and to permits and approvals relating to the research, design, development or manufacture of Cincinnati Products, regardless of whether such permits and approvals relate exclusively to such purposes, to the extent permitted by law;

e. all equipment, vehicles and transportation facilities related to Cincinnati Products, except to the extent that such assets are used exclusively in the marketing or sale of Albright & Wilson Phosphate Salts;

f. all storage capacity related to Cincinnati Products, except to the extent that such assets are used exclusively in the marketing or sale of Albright & Wilson Phosphate Salts;

g. all rights, titles and interests in and to owned or leased real property, together with appurtenances, licenses and permits related to Cincinnati Products, except to the extent that such assets are used exclusively in the marketing or sale of Albright & Wilson Phosphate Salts;

h. all rights under warranties and guarantees, express or implied, related to Cincinnati Products;

i. all books, records, and files related to Cincinnati Products, except to the extent that such assets are used exclusively in the marketing or sale of Albright & Wilson Phosphate Salts; and

j. all items of prepaid expense related to Cincinnati Products.

S. "Support Services" means those services provided by Albright & Wilson to the Assets To Be Divested, as requested by the Commission-approved acquirer, including, but not limited to, accounting and administrative Support Services, customer order entry, freight and transportation scheduling, information services, product storage and handling services, and product support.

II.

IT IS FURTHER ORDERED that:

1. The purpose of this Order is to: (i) preserve the Assets To Be Divested as a viable, competitive, and ongoing business; (ii) assure that no material confidential information is exchanged between the respective businesses of Rhodia and Albright & Wilson; and (iii) prevent interim harm to competition.
2. Respondents shall take such actions as are necessary to maintain the viability, competitiveness, and marketability of the Assets To Be Divested; Respondents shall not sell, transfer, or encumber the Assets To Be Divested or other assets related to the Assets To Be Divested; and Respondents shall not cause or permit the destruction, removal, wasting, or deterioration, or otherwise impair the viability, competitiveness, or marketability of the Assets To Be Divested or other assets related to the Assets To Be Divested, except for ordinary wear and tear.
3. Respondents shall conduct or cause to be conducted the business of the Assets To Be Divested in the regular and ordinary course and in accordance with past practice (including regular repair and maintenance efforts) and shall use their best efforts to preserve existing relationships with suppliers, customers, employees, and others having business relations with the Assets to Be Divested.
4. Prior to the transfer of the Assets To Be Divested, Respondents shall ensure that a sufficient inventory of Joint Venture Phosphoric Acid is maintained and built up, consistent with past and/or projected demand, so as to assure that no shortages of such products occur at any time.
5. Except as required by law, and except to the extent necessary information is exchanged in the course of evaluating the Acquisition, defending investigations or litigation, obtaining legal advice, negotiating agreements to divest assets, or complying with the Decision & Order or this Order to Maintain Assets, Rhodia shall not receive or have access to any competitively sensitive or proprietary information that relates to the Assets To Be Divested, including, but not limited to, customer lists, price lists, marketing methods, patents, technologies, processes or other trade secrets, not independently known to Rhodia from sources other than Albright & Wilson.

III.

IT IS FURTHER ORDERED that Respondents shall maintain facilities and a work force sufficient to provide Support Services to the Assets To Be Divested. Such Support Services shall be equivalent to those currently supplied by Albright & Wilson to the Joint Venture. Respondents shall provide all employees providing Support Services as of January 1, 2000, to the Assets To Be Divested with incentives to continue in their employment positions and shall not terminate them (except for cause) or transfer them to other duties during the period covered by this Order to Maintain Assets. Such incentives shall include, but not be limited to:

1. continuation of all employee benefits offered by Albright & Wilson until the transfer of functions provided for in the Commission-approved divestiture agreement is completed; and
2. a bonus, equal to five (5) percent of the employee's annual salary (including any other bonuses except for the portion of any bonus payable solely as a result of Albright & Wilson's guaranteed bonus program) as of the date this Order to Maintain Assets is issued by the Commission to those Albright & Wilson employees identified in Schedule A of this Order to Maintain Assets, hereto attached, that continue their employment with Albright & Wilson until the completion of the transfer of functions provided for in the Commission-approved divestiture agreement described in the Consent Agreement and Decision and Order.

Provided, however, that Respondents' obligations under this Paragraph III shall cease as to any employee or Support Service upon notice from the buyer of the Assets To Be Divested that an employee or a Support Service is no longer required.

IV.

IT IS FURTHER ORDERED that:

1. Respondents shall not make employment offers to any individual listed in Schedule A to the Decision & Order for a period of one (1) year after this Order has been issued if such individual has accepted an employment offer from the Commission-approved acquirer. Respondents may make employment offers fifteen (15) days after this Order to Maintain Assets has been issued to any individual listed in Schedule A of the Decision & Order who has not accepted an employment offer from the Commission-approved acquirer.
2. Respondents shall not interfere with the employment by the Commission-approved acquirer of the individuals listed in Schedule A to the Decision & Order; shall not offer any incentive to such employees to decline employment with the Commission-approved acquirer or to accept other employment with the Respondents; and shall remove any impediments that may deter such employees from accepting employment with the Commission-approved acquirer, including, but not limited to, any non-compete or confidentiality provisions of employment or other contracts with the Respondents that would affect the ability of those individuals to be employed by the Commission-approved acquirer. Provided, however, that any such waiver is limited to employment with the Commission-approved acquirer.
3. No later than the date on which a divestiture agreement is signed with the proposed acquirer, Respondents shall provide the proposed acquirer with a complete list of all non- clerical employees of Albright & Wilson who have been or were engaged in the research, development, manufacture or sale of Joint Venture Phosphoric Acid, or the research, development or manufacture of Cincinnati Products, at any time during the period from January 1, 1999, until the date of such divestiture agreement. Such list shall state each such individual's name, position, address, current or last known business telephone number and a description of the duties and work performed by the individual in connection with Joint Venture Products.
4. Respondents shall provide the proposed acquirer the opportunity to enter into employment contracts with those non clerical employees described in Paragraph IV.C., above, and shall remove any impediments that may deter such employees from accepting employment with the Commission-approved acquirer, including, but not limited to, any non-compete or confidentiality provisions of employment or other contracts with the Respondents that would affect the ability of those individuals to be employed by the Commission-approved acquirer. Provided, however, that any such waiver is limited to employment with the Commission-approved acquirer.

V.

Donald S. Clark
Secretary
SEAL
ISSUED: March 13, 2000