Hannaford Bros. Co. (Hannaford) - Order to Maintain Assets

9910308

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

ETABLISSEMENTS DELHAIZE FRERES ET CIE "LE LION" S.A., a corporation; DELHAIZE AMERICA, INC., a corporation; and HANNAFORD BROS. CO., a corporation.

Docket No. C-3962

ORDER TO MAINTAIN ASSETS

The Federal Trade Commission ("Commission") having initiated an investigation of the proposed acquisition of Respondent Hannaford Bros. Co. (Hannaford) by Respondent Delhaize America, Inc, formerly Food Lion, Inc. ("Delhaize America"), of which Respondent Etablissements Delhaize Freres et Cie "Le Lion" S.A. ("Delhaize"), a Belgian company, is the majority owner, 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:

1. Respondent Delhaize is a corporation organized, existing and doing business under and by virtue of the laws of Belgium, with its office and principal place of business located at rue Osseghem, 1080 Brussels, Belgium.

2. Respondent Delhaize America is a corporation organized, existing and doing business under and by virtue of the laws of the State of North Carolina, with its principal place of business located at 2110 Executive Drive, Salisbury, North Carolina 28145.

3. Respondent Hannaford is a corporation organized, existing and doing business under and by virtue of the laws of the State of Maine, with its office and principal place of business located in Portland, Maine.

4. 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

IT IS ORDERED that, as used in this Order to Maintain Assets, the definitions used in the Consent Agreement and the attached Decision and Order shall apply.

II.

IT IS FURTHER ORDERED that from the date this Order to Maintain Assets becomes final:

A. Respondents shall maintain the viability, marketability, and competitiveness of the Schedule A Assets, Schedule B Assets, and Schedule C Assets, hereinafter collectively and individually referred to as the "Assets To Be Maintained," pending their divestiture, and shall not cause the wasting or deterioration of the Assets To Be Divested, nor shall they cause the Assets To Be Divested to be operated in a manner inconsistent with applicable laws, nor shall they sell, transfer, encumber or otherwise impair the viability, marketability or competitiveness of the Assets To Be Divested. Respondents shall comply with the terms of this Paragraph until such time as Respondents have divested the Assets To Be Divested pursuant to the terms of this Order. 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 the existing relationships with suppliers, customers, employees, and others having business relations with the Assets To Be Divested in the ordinary course of business and in accordance with past practice. Respondents shall not terminate the operation of any of the Assets To Be Divested. Respondents shall continue to maintain the inventory of each of the Assets To Be Divested at levels and selections (e.g., stock-keeping units) consistent with those maintained by such Respondent(s) at such Supermarket in the ordinary course of business consistent with past practice. Respondents shall use best efforts to keep the organization and properties of each of the Assets To Be Divested intact, including current business operations, physical facilities, working conditions, and a work force of equivalent size, training, and expertise associated with the Supermarket. Included in the above obligations, Respondents shall, without limitation:

1. maintain operations and departments and not reduce hours at each of the Assets To Be Divested;

2. not transfer inventory from any of the Assets To Be Divested other than in the ordinary course of business consistent with past practice;

3. make any payment required to be paid under any contract or lease when due, and otherwise pay all liabilities and satisfy all obligations, in each case in a manner consistent with past practice;

4. maintain the books and records of each of the Assets To Be Divested;

5. not display any signs or conduct any advertising (e.g., direct mailing, point-of-purchase coupons) that indicates that any Respondent is moving its operations to another location, or that indicates any of the Assets To Be Divested will close;

6. not remove the trade marks, trade dress, service marks, or trade names of Respondents at any of the Assets To Be Divested;

7. not conduct any "going out of business," "close-out," "liquidation" or similar sales or promotions at or relating to any of the Assets To Be Divested; and

8. not change or modify in any material respect the existing advertising practices, programs and policies for any of the Assets To Be Divested, other than changes in the ordinary course of business consistent with past practice for Supermarkets of the Respondents not being closed or relocated.

B. Pending the divestiture or transfer of each of the respective Assets, Respondents shall adhere to and abide by the Kroger Agreement, the Lowe's Agreement and the Sylvester Group Agreement, which agreements are incorporated by reference into this Order to Maintain Assets and made a part hereof, and are also appended to the attached Decision and Order.

III.

IT IS FURTHER ORDERED that at any time after the Commission issues this Order to Maintain Assets, the Commission may appoint an Interim Trustee as provided in the attached Decision and Order.

IV.

IT IS FURTHER ORDERED that Respondents shall notify the Commission at least thirty (30) days prior to any proposed change in Respondents that may affect compliance obligations arising out of this Order to Maintain Assets, such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in the corporation.

IT IS FURTHER ORDERED that for the purposes of determining or securing compliance with this Order to Maintain Assets, and subject to any legally recognized privilege, and upon written request with reasonable notice to Respondents made to their principal United States office, Respondents shall permit any duly authorized representatives of the Commission:

A. Access, during office hours of Respondents and in the presence of counsel, to all facilities, and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda, and all other records and documents in the possession or under the control of the Respondents relating to compliance with this Order to Maintain Assets; and

B. Upon five (5) days' notice to Respondents and without restraint or interference from Respondents, to interview officers, directors, or employees of Respondents, who may have counsel present, regarding such matters.

VI.

IT IS FURTHER ORDERED that this Order to Maintain Assets shall terminate on the earlier of:

A. Three (3) business days after the Commission withdraws its acceptance of the Consent Agreement pursuant to the provisions of Commission Rule 2.34, 16 C.F.R. § 2.34; or

B. The day after all of the divestitures or transfers of the Assets, as described in and required by the Decision and Order contained in the Consent Agreement, are completed.

By the Commission.

Donald S. Clark
Secretary

SEAL

ISSUED: July 24, 2000