Panasonic Corporation and Sanyo Electric Co., Ltd; Analysis of Agreement Containing Consent Orders to Aid Public Comment, 62778-62780 [E9-28745]

Download as PDF 62778 Federal Register / Vol. 229, No. 74 / Tuesday, December 1, 2009 / Notices Address: 2914 North Calvert Street, Baltimore, MD 21218. Date Revoked: October 28, 2009. Reason: Failed to maintain a valid bond. License Number: 004044NF. Name: Intermar International Inc. Address: 1882–90 NW 82nd Ave., Miami, FL 33126. Date Revoked: September 23, 2009 (NVOCC and October 26, 2009 (OFF). Reason: Failed to maintain valid bonds. License Number: 003081F. Name: SMS Express Company, Inc. dba Dyna Freight Inc. Address: 2415 So. Sequoia Dr., Compton, CA 90220. Date Revoked: October 29, 2009. Reason: Failed to maintain a valid bond. Sandra L. Kusumoto, Director, Bureau of Certification and Licensing. [FR Doc. E9–28754 Filed 11–30–09; 8:45 am] BILLING CODE 6730–01–P FEDERAL TRADE COMMISSION [File No. 091 0050] Panasonic Corporation and Sanyo Electric Co., Ltd; Analysis of Agreement Containing Consent Orders to Aid Public Comment Federal Trade Commission. Proposed Consent Agreement. AGENCY: mstockstill on DSKH9S0YB1PROD with NOTICES ACTION: SUMMARY: The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent order — embodied in the consent agreement — that would settle these allegations. DATES: Comments must be received on or before December 24, 2009. ADDRESSES: Interested parties are invited to submit written comments electronically or in paper form. Comments should refer to ‘‘Panasonic Sanyo, File No. 091 0050’’ to facilitate the organization of comments. Please note that your comment — including your name and your state — will be placed on the public record of this proceeding, including on the publicly accessible FTC website, at (http:// www.ftc.gov/os/publiccomments.shtm). Because comments will be made public, they should not include any sensitive personal information, such as VerDate Nov<24>2008 20:14 Nov 30, 2009 Jkt 220001 an individual’s Social Security Number; date of birth; driver’s license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. Comments also should not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, comments should not include any ‘‘[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential. . . .,’’ as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled ‘‘Confidential,’’ and must comply with FTC Rule 4.9(c), 16 CFR 4.9(c).1 Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comments in electronic form. Comments filed in electronic form should be submitted by using the following weblink: (https:// public.commentworks.com/ftc/0910050) and following the instructions on the web-based form. To ensure that the Commission considers an electronic comment, you must file it on the webbased form at the weblink: (https:// public.commentworks.com/ftc/ 0910050). If this Notice appears at (http://www.regulations.gov/search/ index.jsp), you may also file an electronic comment through that website. The Commission will consider all comments that regulations.gov forwards to it. You may also visit the FTC website at (http://www.ftc.gov/) to read the Notice and the news release describing it. A comment filed in paper form should include the ‘‘Panasonic Sanyo, File No. 091 0050’’ reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex D), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area 1The comment must be accompanied by an explicit request for confidential treatment, including the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. The request will be granted or denied by the Commission’s General Counsel, consistent with applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 4.9(c). PO 00000 Frm 00045 Fmt 4703 Sfmt 4703 and at the Commission is subject to delay due to heightened security precautions. The Federal Trade Commission Act (‘‘FTC Act’’) and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives, whether filed in paper or electronic form. Comments received will be available to the public on the FTC website, to the extent practicable, at (http://www.ftc.gov/os/ publiccomments.shtm). As a matter of discretion, the Commission makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC website. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, at (http://www.ftc.gov/ftc/ privacy.shtm). FOR FURTHER INFORMATION CONTACT: Brendan McNamara (202-326-3703), Bureau of Competition, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580. Pursuant to section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and § 2.34 the Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for November 24, 2009), on the World Wide Web, at (http:// www.ftc.gov/os/actions.shtm). A paper copy can be obtained from the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580, either in person or by calling (202) 326-2222. Public comments are invited, and may be filed with the Commission in either paper or electronic form. All comments should be filed as prescribed in the ADDRESSES section above, and must be received on or before the date specified in the DATES section. SUPPLEMENTARY INFORMATION: E:\FR\FM\01DEN1.SGM 01DEN1 Federal Register / Vol. 229, No. 74 / Tuesday, December 1, 2009 / Notices batteries, semiconductors, capacitors, small motors, and optical pickups. I. Introduction The Federal Trade Commission (‘‘Commission’’) has accepted from Panasonic Corporation (‘‘Panasonic’’), subject to final approval, an Agreement Containing Consent Orders (‘‘Consent Agreement’’), which is designed to remedy the anticompetitive effects resulting from Panasonic’s proposed acquisition of 100% of the voting securities of Sanyo Electric Co., Ltd. (‘‘Sanyo’’). Under the terms of the Consent Agreement, Sanyo will divest its assets relating to the manufacture and sale of portable NiMH batteries to FDK Corporation (‘‘FDK’’), a subsidiary of Fujitsu, Ltd. The proposed Consent Agreement has been placed on the public record for 30 days to solicit comments from interested persons. Comments received during this period will become part of the public record. After 30 days, the Commission will again review the proposed Consent Agreement, and will decide whether it should withdraw from the proposed Consent Agreement or make final the accompanying Decision and Order (‘‘Order’’). Pursuant to an agreement concluded on December 19, 2008 (the ‘‘Agreement’’), Panasonic announced its intention to commence a cash tender offer to acquire 100 percent of the voting securities of Sanyo for an aggregate purchase price of approximately $9 billion (the ‘‘Acquisition’’). The Commission’s complaint alleges the facts described below and that the proposed Acquisition, if consummated, would violate 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, by lessening competition in the market for portable NiMH batteries. mstockstill on DSKH9S0YB1PROD with NOTICES Analysis of Agreement Containing Consent Order to Aid Public Comment III. Portable NiMH Batteries There are three rechargeable battery chemistries: nickel cadmium (‘‘NiCd’’), nickel metal hydride (‘‘NiMH’’) and lithium-ion (‘‘Li-ion’’). While each battery chemistry is used in varying degrees to power batteries for portable electronic devices, the evidence shows that portable NiMH batteries are a relevant antitrust market. First of all, there are a number of products, most notably two-way radios, that have a large installed base of customers that cannot switch to another type of rechargeable battery because the products were designed specifically to accommodate portable NiMH batteries. Second, even for customers who use NiMH batteries but are not locked in to purchasing them, there is a strong preference for portable NiMH batteries for performance and cost reasons. Both sets of customers would not switch to a different battery technology in response to a five to ten percent increase in the price of portable NiMH batteries. The relevant geographic market for portable NiMH batteries is worldwide. Manufacturing of portable NiMH batteries is concentrated in Asia, and orders are shipped to customers located throughout the world. Panasonic and Sanyo produce the highest quality portable NiMH batteries, and consequently the two firms are uniquely close competitors. The remaining suppliers of portable NiMH batteries produce lower quality batteries and are therefore more distant competitors to Panasonic and Sanyo. As the only suppliers of high quality portable NiMH batteries, Panasonic and Sanyo control the vast majority of the market. The lower quality suppliers have fringe positions and do not affect competition between Panasonic and Sanyo. As each other’s most significant competitors for portable NiMH batteries, Panasonic and Sanyo respond directly to competition from each other with lower prices, better services and improved products, to the benefit of consumers. By eliminating this direct and substantial competition, the proposed acquisition would allow Panasonic to exercise market power unilaterally, thereby increasing the likelihood that purchasers of portable NiMH batteries would be forced to pay higher prices and restraining the direct competition that promoted innovation and high quality service. The proposed acquisition eliminates a competitor to which customers otherwise could have diverted their sales – in a market where II. The Parties Panasonic, headquartered in Osaka, Japan, is a leading manufacturer of consumer electronics such as televisions, DVD players, and computers. Panasonic’s Components and Devices Division produces rechargeable batteries, as well as semiconductors and mechanical components. Headquartered in Osaka, Japan, Sanyo Electric Co., Ltd., is a leading producer of electronic devices and components, including digital cameras, televisions, car navigation systems, home appliances, and consumer electronics. Sanyo’s rechargeable battery business is operated out of its Components Division, which also manufacturers VerDate Nov<24>2008 20:14 Nov 30, 2009 Jkt 220001 PO 00000 Frm 00046 Fmt 4703 Sfmt 4703 62779 the alternative sources of supply are usually not viable options. Neither new entry nor repositioning and expansion sufficient to deter or counteract the anticompetitive effects of the proposed acquisition in the portable NiMH market is likely to occur within two years. Existing competitors would have to significantly improve their portable NiMH production facilities, improve the quality of their portable NiMH batteries, and overcome the resistance of customers to switch to a portable NiMH battery supplier that lacks the track record of effectively meeting the needs of those customers served by Panasonic and Sanyo. Also, because NiMH is an older battery technology, it has a relatively small growth potential for the sale of portable NiMH batteries, so it is unlikely that a potential competitor would be able to justify the investments necessary to enter the market for portable NiMH batteries. IV. The Consent Agreement The proposed Order eliminates the competitive concerns raised by Panasonic’s proposed acquisition of Sanyo by requiring the divestiture of Sanyo’s assets relating to the manufacture and sale of portable NiMH batteries to FDK Corporation (‘‘FDK’’), a subsidiary of Fujitsu, Ltd. This divestiture must occur with fifteen days after the Acquisition but may be extended an additional thirty days, if necessary, to allow European Commission approval of the divestiture to FDK. FDK has the industry experience, reputation, and resources to replace Sanyo as an effective competitor in the portable NiMH battery market. Headquartered in Tokyo, Japan, FDK manufactures and sells electronic components and batteries worldwide, and is a subsidiary of Fujitsu, a multinational computing, telecommunications and electronics company. FDK does not currently compete against Panasonic and Sanyo in the sale of portable NiMH batteries, but it does manufacture and sell alkaline batteries. FDK also sources and resells a broad range of batteries, including carbon-zinc, lithium primary, and manganese batteries. Pursuant to the Order, FDK would receive all the assets necessary to operate Sanyo’s current portable NiMH battery business, including most importantly, the NiMH battery manufacturing facility in Takasaki, Japan (‘‘Takasaki plant’’). The Takasaki plant is a premier manufacturing facility for portable NiMH batteries, producing approximately 30 percent of the E:\FR\FM\01DEN1.SGM 01DEN1 mstockstill on DSKH9S0YB1PROD with NOTICES 62780 Federal Register / Vol. 229, No. 74 / Tuesday, December 1, 2009 / Notices portable NiMH batteries worldwide. The Order also requires Sanyo to supply to FDK sizes Sub C/D portable NiMH batteries, which are the only sizes of Sanyo’s portable NiMH batteries not produced at the Takasaki plant and account for a tiny fraction of Sanyo’s overall portable NiMH sales. In addition to the employees of the Takasaki plant, who would automatically transfer to FDK, the Order requires Sanyo to provide FDK access to certain other key Sanyo employees needed to successfully operate the business. The Order also requires Sanyo to transfer all intellectual property necessary to make and sell portable NiMH batteries, including Sanyo patents and licenses related to portable NiMH batteries. A divestiture of Sanyo’s portable NiMH assets will ensure that FDK has a full line of high-quality portable NiMH batteries, enabling it to compete immediately with the merged entity. The Commission has appointed Philip Comerford, Jr., Managing Director of ING Capital LLC and Head of the Mergers & Acquisitions Group, as the interim monitor to oversee the divestiture of the NiMH battery business. In order to ensure that the Commission remains informed about the status of the proposed divestitures, the proposed Consent Agreement requires the parties to file periodic reports with the Commission until the divestiture is accomplished. If the Commission determines that FDK is not an acceptable purchaser, or the manner of the divestiture is not acceptable, the parties must unwind the sale to FDK and divest the portable NiMH battery assets within six months of the date the Order becomes final to another Commission-approved acquirer. If the parties fail to divest within six months, the Commission may appoint a trustee to divest the portable NiMH battery assets. The purpose of this analysis is to facilitate public comment on the Consent Agreement, and it is not intended to constitute an official interpretation of the proposed Decision and Order or the Order To Maintain Assets, or to modify their terms in any way. By direction of the Commission. Donald S. Clark Secretary. [FR Doc. E9–28745 Filed 11–30–09: 8:45 am] BILLING CODE 6750–01–S VerDate Nov<24>2008 21:16 Nov 30, 2009 Jkt 220001 OFFICE OF GOVERNMENT ETHICS Agency Information Collection Activities; Submission for OMB Review; Proposed Collection; Comment Request for Unmodified Qualified Trust Model Certificates and Model Trust Documents AGENCY: Office of Government Ethics (OGE). ACTION: Notice. The Office of Government Ethics is publishing this second round notice and requesting comment on the twelve executive branch OGE model certificates and model documents for qualified trusts. OGE intends to submit these forms for extension of approval (up to three years) by the Office of Management and Budget (OMB) under the Paperwork Reduction Act. OGE is proposing no changes to these forms at this time. As in the past, OGE will notify filers of an update to the privacy information contained in the existing forms, and will post a notification thereof on its Web site. DATES: Written comments by the public and the agencies on this proposed extension are invited and must be received by December 31, 2009. ADDRESSES: Comments may be submitted, identified by the title of the information collection activity, to the Office of Information and Regulatory Affairs, Attn: Ms. Sharon Mar, OMB Desk Officer for the Office of Government Ethics, by any of the following two methods within 30 days from the date of publication in this Federal Register: FAX: 202–395–6974, Attn: Ms. Sharon Mar, OMB Desk Officer for the Office of Government Ethics; E-mail: smar@omb.eop.gov. FOR FURTHER INFORMATION CONTACT: Paul D. Ledvina, Records Officer, Office of Government Ethics; Telephone: 202– 482–9247; TTY: 800–877–8339; FAX: 202–482–9237; E-mail: pdledvin@oge.gov. The model certificates of independence and compliance for qualified trusts are codified in appendixes A, B, and C to 5 CFR part 2634. Copies of the model trust documents are available as one set of OGE publications through the Ethics Documents section of OGE’s Web site at http://www.usoge.gov. Copies of the qualified trust model certificates and the model trust documents may also be obtained, without charge, by contacting Mr. Ledvina. SUPPLEMENTARY INFORMATION: The Office of Government Ethics intends to submit, shortly after this second round notice, SUMMARY: PO 00000 Frm 00047 Fmt 4703 Sfmt 4703 all twelve qualified trust model certificates and model documents described below (all of which are included under OMB paperwork control number 3209–0007) for a three-year extension of approval by OMB under the Paperwork Reduction Act (44 U.S.C. chapter 35). OGE is proposing no changes to the twelve qualified trust certificates and model trust documents at this time. Privacy Act Statement In 2003, OGE updated the OGE/ GOVT–1 system of records notice (covering SF 278 Public Financial Disclosure Reports and other nameretrieved ethics program records), including the addition of the three new routine uses and the modification of one of the existing routine uses. See 68 FR 3097–3109 (January 22, 2003), as corrected at 68 FR 24744 (May 8, 2003). As a result, the Privacy Act Statement on each of the qualified trust model certificates and documents, which includes paraphrases of the routine uses, is affected. OGE has not incorporated this update into the qualified trust model certificates and documents at this time, since a more thorough revision of these information collections is planned within the next three years. Upon distribution of the trust model certificates and documents, OGE will continue to inform users of the update to the Privacy Act Statement. OGE will also post a notification thereof on its Web site to accompany the model certificates and documents. Model Trust Form Users OGE is the supervising ethics office for the executive branch of the Federal Government under the Ethics in Government Act of 1978 (Ethics Act). Presidential nominees to executive branch positions subject to Senate confirmation and any other executive branch officials may seek OGE approval for Ethics Act qualified blind or diversified trusts as one means to be used to avoid conflicts of interest. OGE is the sponsoring agency for the model certificates and model trust documents for qualified blind and diversified trusts of executive branch officials set up under section 102(f) of the Ethics Act, 5 U.S.C. app. § 102(f), and OGE’s implementing financial disclosure regulations at subpart D of 5 CFR part 2634. The various model certificates and model trust documents are utilized by OGE and settlors, trustees and other fiduciaries in establishing and administering these qualified trusts. E:\FR\FM\01DEN1.SGM 01DEN1

Agencies

[Federal Register Volume 74, Number 229 (Tuesday, December 1, 2009)]
[Notices]
[Pages 62778-62780]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-28745]


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FEDERAL TRADE COMMISSION

[File No. 091 0050]


Panasonic Corporation and Sanyo Electric Co., Ltd; Analysis of 
Agreement Containing Consent Orders to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint and the terms of the consent order -- embodied in the consent 
agreement -- that would settle these allegations.

DATES: Comments must be received on or before December 24, 2009.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``Panasonic 
Sanyo, File No. 091 0050'' to facilitate the organization of comments. 
Please note that your comment -- including your name and your state -- 
will be placed on the public record of this proceeding, including on 
the publicly accessible FTC website, at (http://www.ftc.gov/os/publiccomments.shtm).
    Because comments will be made public, they should not include any 
sensitive personal information, such as an individual's Social Security 
Number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. Comments also 
should not include any sensitive health information, such as medical 
records or other individually identifiable health information. In 
addition, comments should not include any ``[t]rade secret or any 
commercial or financial information which is obtained from any person 
and which is privileged or confidential. . . .,'' as provided in 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which 
confidential treatment is requested must be filed in paper form, must 
be clearly labeled ``Confidential,'' and must comply with FTC Rule 
4.9(c), 16 CFR 4.9(c).\1\
---------------------------------------------------------------------------

    \1\The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 
4.9(c).
---------------------------------------------------------------------------

    Because paper mail addressed to the FTC is subject to delay due to 
heightened security screening, please consider submitting your comments 
in electronic form. Comments filed in electronic form should be 
submitted by using the following weblink: (https://public.commentworks.com/ftc/0910050) and following the instructions on 
the web-based form. To ensure that the Commission considers an 
electronic comment, you must file it on the web-based form at the 
weblink: (https://public.commentworks.com/ftc/0910050). If this Notice 
appears at (http://www.regulations.gov/search/index.jsp), you may also 
file an electronic comment through that website. The Commission will 
consider all comments that regulations.gov forwards to it. You may also 
visit the FTC website at (http://www.ftc.gov/) to read the Notice and 
the news release describing it.
    A comment filed in paper form should include the ``Panasonic Sanyo, 
File No. 091 0050'' reference both in the text and on the envelope, and 
should be mailed or delivered to the following address: Federal Trade 
Commission, Office of the Secretary, Room H-135 (Annex D), 600 
Pennsylvania Avenue, NW, Washington, DC 20580. The FTC is requesting 
that any comment filed in paper form be sent by courier or overnight 
service, if possible, because U.S. postal mail in the Washington area 
and at the Commission is subject to delay due to heightened security 
precautions.
    The Federal Trade Commission Act (``FTC Act'') and other laws the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding as appropriate. The Commission will 
consider all timely and responsive public comments that it receives, 
whether filed in paper or electronic form. Comments received will be 
available to the public on the FTC website, to the extent practicable, 
at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of 
discretion, the Commission makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC website. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm).

FOR FURTHER INFORMATION CONTACT: Brendan McNamara (202-326-3703), 
Bureau of Competition, 600 Pennsylvania Avenue, NW, Washington, D.C. 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 the 
Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that 
the above-captioned consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of thirty (30) days. The following Analysis to Aid Public 
Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for November 24, 2009), on the World Wide Web, at (http://www.ftc.gov/os/actions.shtm). A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington, 
D.C. 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. All comments should be filed as 
prescribed in the ADDRESSES section above, and must be received on or 
before the date specified in the DATES section.

[[Page 62779]]

Analysis of Agreement Containing Consent Order to Aid Public Comment

I. Introduction

    The Federal Trade Commission (``Commission'') has accepted from 
Panasonic Corporation (``Panasonic''), subject to final approval, an 
Agreement Containing Consent Orders (``Consent Agreement''), which is 
designed to remedy the anticompetitive effects resulting from 
Panasonic's proposed acquisition of 100% of the voting securities of 
Sanyo Electric Co., Ltd. (``Sanyo''). Under the terms of the Consent 
Agreement, Sanyo will divest its assets relating to the manufacture and 
sale of portable NiMH batteries to FDK Corporation (``FDK''), a 
subsidiary of Fujitsu, Ltd.
    The proposed Consent Agreement has been placed on the public record 
for 30 days to solicit comments from interested persons. Comments 
received during this period will become part of the public record. 
After 30 days, the Commission will again review the proposed Consent 
Agreement, and will decide whether it should withdraw from the proposed 
Consent Agreement or make final the accompanying Decision and Order 
(``Order'').
    Pursuant to an agreement concluded on December 19, 2008 (the 
``Agreement''), Panasonic announced its intention to commence a cash 
tender offer to acquire 100 percent of the voting securities of Sanyo 
for an aggregate purchase price of approximately $9 billion (the 
``Acquisition''). The Commission's complaint alleges the facts 
described below and that the proposed Acquisition, if consummated, 
would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. Sec.  
18, and Section 5 of the Federal Trade Commission Act, as amended, 15 
U.S.C. Sec.  45, by lessening competition in the market for portable 
NiMH batteries.

II. The Parties

    Panasonic, headquartered in Osaka, Japan, is a leading manufacturer 
of consumer electronics such as televisions, DVD players, and 
computers. Panasonic's Components and Devices Division produces 
rechargeable batteries, as well as semiconductors and mechanical 
components.
    Headquartered in Osaka, Japan, Sanyo Electric Co., Ltd., is a 
leading producer of electronic devices and components, including 
digital cameras, televisions, car navigation systems, home appliances, 
and consumer electronics. Sanyo's rechargeable battery business is 
operated out of its Components Division, which also manufacturers 
batteries, semiconductors, capacitors, small motors, and optical 
pickups.

III. Portable NiMH Batteries

    There are three rechargeable battery chemistries: nickel cadmium 
(``NiCd''), nickel metal hydride (``NiMH'') and lithium-ion (``Li-
ion''). While each battery chemistry is used in varying degrees to 
power batteries for portable electronic devices, the evidence shows 
that portable NiMH batteries are a relevant antitrust market. First of 
all, there are a number of products, most notably two-way radios, that 
have a large installed base of customers that cannot switch to another 
type of rechargeable battery because the products were designed 
specifically to accommodate portable NiMH batteries. Second, even for 
customers who use NiMH batteries but are not locked in to purchasing 
them, there is a strong preference for portable NiMH batteries for 
performance and cost reasons. Both sets of customers would not switch 
to a different battery technology in response to a five to ten percent 
increase in the price of portable NiMH batteries.
    The relevant geographic market for portable NiMH batteries is 
worldwide. Manufacturing of portable NiMH batteries is concentrated in 
Asia, and orders are shipped to customers located throughout the world.
    Panasonic and Sanyo produce the highest quality portable NiMH 
batteries, and consequently the two firms are uniquely close 
competitors. The remaining suppliers of portable NiMH batteries produce 
lower quality batteries and are therefore more distant competitors to 
Panasonic and Sanyo. As the only suppliers of high quality portable 
NiMH batteries, Panasonic and Sanyo control the vast majority of the 
market. The lower quality suppliers have fringe positions and do not 
affect competition between Panasonic and Sanyo.
    As each other's most significant competitors for portable NiMH 
batteries, Panasonic and Sanyo respond directly to competition from 
each other with lower prices, better services and improved products, to 
the benefit of consumers. By eliminating this direct and substantial 
competition, the proposed acquisition would allow Panasonic to exercise 
market power unilaterally, thereby increasing the likelihood that 
purchasers of portable NiMH batteries would be forced to pay higher 
prices and restraining the direct competition that promoted innovation 
and high quality service. The proposed acquisition eliminates a 
competitor to which customers otherwise could have diverted their sales 
- in a market where the alternative sources of supply are usually not 
viable options.
    Neither new entry nor repositioning and expansion sufficient to 
deter or counteract the anticompetitive effects of the proposed 
acquisition in the portable NiMH market is likely to occur within two 
years. Existing competitors would have to significantly improve their 
portable NiMH production facilities, improve the quality of their 
portable NiMH batteries, and overcome the resistance of customers to 
switch to a portable NiMH battery supplier that lacks the track record 
of effectively meeting the needs of those customers served by Panasonic 
and Sanyo. Also, because NiMH is an older battery technology, it has a 
relatively small growth potential for the sale of portable NiMH 
batteries, so it is unlikely that a potential competitor would be able 
to justify the investments necessary to enter the market for portable 
NiMH batteries.

IV. The Consent Agreement

    The proposed Order eliminates the competitive concerns raised by 
Panasonic's proposed acquisition of Sanyo by requiring the divestiture 
of Sanyo's assets relating to the manufacture and sale of portable NiMH 
batteries to FDK Corporation (``FDK''), a subsidiary of Fujitsu, Ltd. 
This divestiture must occur with fifteen days after the Acquisition but 
may be extended an additional thirty days, if necessary, to allow 
European Commission approval of the divestiture to FDK.
    FDK has the industry experience, reputation, and resources to 
replace Sanyo as an effective competitor in the portable NiMH battery 
market. Headquartered in Tokyo, Japan, FDK manufactures and sells 
electronic components and batteries worldwide, and is a subsidiary of 
Fujitsu, a multinational computing, telecommunications and electronics 
company. FDK does not currently compete against Panasonic and Sanyo in 
the sale of portable NiMH batteries, but it does manufacture and sell 
alkaline batteries. FDK also sources and resells a broad range of 
batteries, including carbon-zinc, lithium primary, and manganese 
batteries.
    Pursuant to the Order, FDK would receive all the assets necessary 
to operate Sanyo's current portable NiMH battery business, including 
most importantly, the NiMH battery manufacturing facility in Takasaki, 
Japan (``Takasaki plant''). The Takasaki plant is a premier 
manufacturing facility for portable NiMH batteries, producing 
approximately 30 percent of the

[[Page 62780]]

portable NiMH batteries worldwide. The Order also requires Sanyo to 
supply to FDK sizes Sub C/D portable NiMH batteries, which are the only 
sizes of Sanyo's portable NiMH batteries not produced at the Takasaki 
plant and account for a tiny fraction of Sanyo's overall portable NiMH 
sales. In addition to the employees of the Takasaki plant, who would 
automatically transfer to FDK, the Order requires Sanyo to provide FDK 
access to certain other key Sanyo employees needed to successfully 
operate the business. The Order also requires Sanyo to transfer all 
intellectual property necessary to make and sell portable NiMH 
batteries, including Sanyo patents and licenses related to portable 
NiMH batteries. A divestiture of Sanyo's portable NiMH assets will 
ensure that FDK has a full line of high-quality portable NiMH 
batteries, enabling it to compete immediately with the merged entity.
    The Commission has appointed Philip Comerford, Jr., Managing 
Director of ING Capital LLC and Head of the Mergers & Acquisitions 
Group, as the interim monitor to oversee the divestiture of the NiMH 
battery business. In order to ensure that the Commission remains 
informed about the status of the proposed divestitures, the proposed 
Consent Agreement requires the parties to file periodic reports with 
the Commission until the divestiture is accomplished.
    If the Commission determines that FDK is not an acceptable 
purchaser, or the manner of the divestiture is not acceptable, the 
parties must unwind the sale to FDK and divest the portable NiMH 
battery assets within six months of the date the Order becomes final to 
another Commission-approved acquirer. If the parties fail to divest 
within six months, the Commission may appoint a trustee to divest the 
portable NiMH battery assets.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement, and it is not intended to constitute an official 
interpretation of the proposed Decision and Order or the Order To 
Maintain Assets, or to modify their terms in any way.
    By direction of the Commission.

Donald S. Clark
Secretary.
[FR Doc. E9-28745 Filed 11-30-09: 8:45 am]
BILLING CODE 6750-01-S