001 0186
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of
Metso Oyj, a corporation, and Svedala
Industri AB, a corporation.
Docket No. C-4024
COMPLAINT
The Federal Trade Commission ("Commission"), having
reason to believe that Respondents Metso Oyj ("Metso"), a corporation subject to
the jurisdiction of the Commission, and Svedala Industri AB ("Svedala"), a
corporation subject to the jurisdiction of the Commission, have entered into an agreement
whereby Metso would acquire all of the issued and outstanding securities and convertible
debentures of Svedala in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C.
§ 18, and Section 5 of the Federal Trade Commission Act ("FTC Act"), as
amended, 15 U.S.C. § 45, and it appearing to the Commission that a proceeding in respect
thereof would be in the public interest, hereby issues its Complaint, stating its charges
as follows:
I. RESPONDENTS
- 1. Respondent Metso is a corporation organized, existing and
doing business under and by virtue of the laws of Finland, with its office and principal
place of business located at Fabianinkatu 9 A, P.O. Box 1220, FIN-00101, Helsinki,
Finland. Metso's principal subsidiary in the United States is located at 133 Federal
Street, Suite 302, Boston, MA 02110.
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- 2. Respondent Svedala is a corporation organized, existing and
doing business under and by virtue of the laws of Sweden, with its office and principal
place of business located at Kaptensgatan 1, Box 4004, SE-203, 11 Malmö, Sweden.
Svedala's principal subsidiary in the United States is located at 20965 Crossroads Circle,
Waukesha, WI 53186.
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- 3. Respondent Metso, through its Metso Minerals subsidiary
(formerly known as Nordberg), and Respondent Svedala are engaged in, among other things,
the research, development, manufacture and sale of rock and mineral processing equipment,
including but not limited to cone crushers, jaw crushers, primary gyratory crushers and
grinding mills.
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- 4. Respondents are, and at all times herein have been, engaged
in commerce, as "commerce" is defined in Section 1 of the Clayton Act as
amended, 15 U.S.C. § 12, and are corporations whose business is in or affects commerce,
as "commerce" is defined in Section 4 of the Federal Trade Commission Act, as
amended, 15 U.S.C. § 44.
II. THE PROPOSED ACQUISITION
- 5. On June 21, 2000, Metso announced a cash tender offer to
acquire all of the issued and outstanding shares and convertible debentures of Svedala
("Acquisition"). The transaction is valued at approximately $1.6 billion.
III. THE RELEVANT MARKETS
- 6. For the purposes of this Complaint, the relevant lines of
commerce in which to analyze the effects of the Acquisition are:
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- a. the research, development, manufacture and sale of cone
crushers;
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- b. the research, development, manufacture and sale of jaw
crushers;
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- c. the research, development, manufacture and sale of primary
gyratory crushers; and
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- d. the research, development, manufacture and sale of grinding
mills.
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- 7. For the purposes of this Complaint, the world is the
relevant geographic area in which to analyze the effects of the Acquisition in the
relevant lines of commerce.
IV. THE STRUCTURE OF THE MARKETS
- 8. The market for the research, development, manufacture and
sale of cone crushers is highly concentrated whether measured by the Herfindahl-Hirschman
Index ("HHI") or by concentration ratios. Metso and Svedala are the two leading
suppliers of cone crushers in the world.
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- 9. The market for the research, development, manufacture and
sale of jaw crushers is highly concentrated whether measured by the HHI or by
concentration ratios. Metso and Svedala are the two leading suppliers of jaw crushers in
the world.
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- 10. The market for the research, development, manufacture and
sale of primary gyratory crushers is highly concentrated whether measured by the HHI or by
concentration ratios. Metso and Svedala are two of the leading suppliers of primary
gyratory crushers in the world.
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- 11. The market for the research, development, manufacture and
sale of grinding mills is highly concentrated whether measured by the HHI or by
concentration ratios. Metso and Svedala are two of the leading suppliers of grinding mills
in the world.
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- 12. Metso and Svedala are actual competitors in each of the
relevant markets for the research, development, manufacture and sale of cone crushers, jaw
crushers, primary gyratory crushers and grinding mills.
V. ENTRY CONDITIONS
- 13. Entry into each of the relevant markets identified in
Paragraphs 6 and 7 is unlikely and would not occur in a timely manner to deter or
counteract the adverse competitive effects described in Paragraph 14, because of, among
other things, the time and expense necessary to develop new rock processing equipment and
gain customer acceptance for the equipment.
VI. EFFECTS OF THE ACQUISITION
- 14. The effects of the Acquisition, if consummated, may be to
substantially lessen competition and to tend to create a monopoly in the relevant markets
in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5
of the FTC Act, as amended, 15 U.S.C. § 45, in the following ways, among others:
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- a. by eliminating actual, direct, and substantial competition
between Metso and Svedala in each of the relevant markets;
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- b. by increasing the likelihood that Metso will unilaterally
exercise market power in each of the relevant markets;
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- c. by increasing the likelihood of coordinated interaction in
each of the relevant markets; and
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- d. by increasing the likelihood that customers of cone
crushers, jaw crushers, primary gyratory crushers and grinding mills would be forced to
pay higher prices.
VII. VIOLATIONS CHARGED
- 15. The cash tender offer described in Paragraph 5 constitutes
a violation of Section 5 of the FTC Act, as amended, 15 U.S.C. § 45.
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- 16. The Acquisition described in Paragraph 5, if consummated,
would constitute a violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18,
and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45.
WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade
Commission on this seventh day of September, 2001, issues its Complaint against said
Respondents.
By the Commission, Chairman Muris not participating.
Donald S. Clark
Secretary |