Emerson Electric Co. and Pentair plc; Analysis To Aid Public Comment, 20889-20892 [2017-08965]

Download as PDF Federal Register / Vol. 82, No. 85 / Thursday, May 4, 2017 / Notices This meeting will be closed to the public. ITEMS TO BE DISCUSSED: Compliance matters pursuant to 52 U.S.C. 30109. Matters relating to internal personnel decisions, or internal rules and practices. Information the premature disclosure of which would be likely to have a considerable adverse effect on the implementation of a proposed Commission action. Matters concerning participation in civil actions or proceedings or arbitration. * * * * * PERSON TO CONTACT FOR INFORMATION: Judith Ingram, Press Officer, Telephone: (202) 694–1220. STATUS: Dayna C. Brown, Secretary and Clerk of the Commission. [FR Doc. 2017–09070 Filed 5–2–17; 11:15 am] BILLING CODE 6715–01–P FEDERAL RESERVE SYSTEM pmangrum on DSK3GDR082PROD with NOTICES Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board’s Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)). The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than May 18, 2017. A. Federal Reserve Bank of Philadelphia (William Spaniel, Senior Vice President) 100 North 6th Street, Philadelphia, Pennsylvania 19105– 1521. Comments can also be sent electronically to Comments.applications@phil.frb.org: 1. Firetree, Ltd., Williamsport, Pennsylvania, individually and as part of a group acting in concert with Firetree, Ltd., William Brown, Muncy, Pennsylvania; Donna Spitler, and Thomas Spitler, both of Wooster, Ohio; and Perter Went, Jersey City, New Jersey; to retain voting shares of Woodlands Financial Services Company, Williamsport, Pennsylvania, VerDate Sep<11>2014 14:39 May 03, 2017 Jkt 241001 and thereby retain shares of Woodlands Bank, Williamsport, Pennsylvania. Board of Governors of the Federal Reserve System, April 28, 2017. Yao-Chin Chao, Assistant Secretary of the Board. [FR Doc. 2017–08960 Filed 5–3–17; 8:45 am] BILLING CODE 6210–01–P FEDERAL TRADE COMMISSION [File No. 161 0221; Docket No. C–4615] Emerson Electric Co. and Pentair plc; Analysis To Aid Public Comment Federal Trade Commission. Proposed consent agreement. AGENCY: ACTION: The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders—embodied in the consent agreement—that would settle these allegations. DATES: Comments must be received on or before May 30, 2017. ADDRESSES: Interested parties may file a comment at https:// ftcpublic.commentworks.com/ftc/ emersonelectricconsent online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write ‘‘In the Matter of Emerson Electric Co. and Pentair plc, File No. 161 0221’’ on your comment and file your comment online at https:// ftcpublic.commentworks.com/ftc/ emersonelectricconsent by following the instructions on the web-based form. If you prefer to file your comment on paper, write ‘‘In the Matter of Emerson Electric Co. and Pentair plc, File No. 161 0221’’ on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. FOR FURTHER INFORMATION CONTACT: Jonathan Platt (212–607–2819) or Ryan Harsch (212–607–2805), FTC, Northeast Region, One Bowling Green, Suite 318, New York, NY 10004. SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing 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 SUMMARY: FEDERAL RESERVE SYSTEM Formations of, Acquisitions by, and Mergers of Bank Holding Companies The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) (BHC Act), Regulation Y (12 CFR part 225), and all other applicable statutes and regulations to become a bank holding company and/or to acquire the assets or the ownership of, control of, or the power to vote shares of a bank or bank holding company and all of the banks and nonbanking companies owned by the bank holding company, including the companies listed below. The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States. Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than May 30, 2017. A. Federal Reserve Bank of St. Louis (David L. Hubbard, Senior Manager) P.O. Box 442, St. Louis, Missouri 63166–2034. Comments can also be sent electronically to Comments.applications@stls.frb.org: 1. Home Bancshares, Inc., Conway, Arkansas; to acquire 100 percent of Stonegate Bank, Pompano Beach, Florida. Board of Governors of the Federal Reserve System, April 28, 2017. Yao-Chin Chao, Assistant Secretary of the Board. [FR Doc. 2017–08959 Filed 5–3–17; 8:45 am] BILLING CODE 6210–01–P PO 00000 Frm 00026 Fmt 4703 Sfmt 4703 20889 E:\FR\FM\04MYN1.SGM 04MYN1 pmangrum on DSK3GDR082PROD with NOTICES 20890 Federal Register / Vol. 82, No. 85 / Thursday, May 4, 2017 / Notices complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for April 28, 2017), on the World Wide Web, at https://www.ftc.gov/ os/actions.shtm. You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before May 30, 2017. Write ‘‘In the Matter of Emerson Electric Co. and Pentair plc, File No. 161 0221’’ on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at https://www.ftc.gov/policy/ public-comments. As a matter of discretion, the Commission tries to remove individuals’ home contact information from comments before placing them on the Commission Web site. Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at https:// ftcpublic.commentworks.com/ftc/ emersonelectricconsent by following the instructions on the web-based form. If this Notice appears at https:// www.regulations.gov/#!home, you also may file a comment through that Web site. If you file your comment on paper, write ‘‘In the Matter of Emerson Electric Co. and Pentair plc, File No. 161 0221’’ on your comment and on the envelope, and mail it to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC–5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC. If possible, submit your paper comment to the Commission by courier or overnight service. Because your comment will be placed on the publicly accessible FTC Web site at www.ftc.gov, you are solely responsible for making sure that your comment does not include any sensitive or confidential information. In particular, your comment should not include any sensitive personal information, such as your or anyone else’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 VerDate Sep<11>2014 14:39 May 03, 2017 Jkt 241001 debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, your comment should not include any ‘‘trade secret or any commercial or financial information which . . . is privileged or confidential’’—as provided by Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)— including in particular competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names. Once your comment has been posted on the public FTC Web site—as legally required by FTC Rule 4.9(b)—we cannot redact or remove your comment from the FTC Web site, unless you submit a confidentiality request that meets the requirements for such treatment under FTC Rule 4.9(c), and the General Counsel grants that request in accordance with the law and the public interest. 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). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c). Visit the Commission Web site at https://www.ftc.gov to read this Notice and the news release describing it. The FTC Act and other laws that 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 on or before May 30, 2017. You can find more information, including routine uses permitted by the Privacy Act, in the Commission’s privacy policy, at https:// www.ftc.gov/site-information/privacypolicy. Analysis of Agreement Containing Consent Orders To Aid Public Comment I. Introduction The Federal Trade Commission (‘‘Commission’’) has accepted, subject to final approval, an Agreement Containing Consent Orders (‘‘Consent Agreement’’) from Emerson Electric Co. (‘‘Emerson’’) and Pentair plc (‘‘Pentair’’) (collectively, the ‘‘Respondents’’) that is designed to remedy the anticompetitive PO 00000 Frm 00027 Fmt 4703 Sfmt 4703 effects that would likely result from Emerson’s proposed acquisition of Pentair’s valves and controls business. Pursuant to a Share Purchase Agreement, dated as of August 18, 2016, Emerson proposes to acquire the equity interests of certain subsidiaries of Pentair in exchange for cash considerations of approximately $3.15 billion (the ‘‘Acquisition’’). The proposed Acquisition would combine the two largest suppliers of switchboxes, which are industrial valve control products, in the United States. The Commission’s Complaint alleges 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 substantially lessening competition in the United States market for switchboxes. The proposed Decision and Order (‘‘Order’’) requires Emerson to divest Pentair’s switchbox manufacturer subsidiary, Westlock Controls Corporation (‘‘Westlock’’), to Crane Co. (‘‘Crane’’) no later than ten days after the Acquisition is consummated. The divestiture requires Emerson to transfer to Crane all of the facilities, personnel, confidential information, and intellectual property associated with the design, manufacture, and sale of Westlock’s products, which will allow Crane to effectively compete in the switchbox market. The Commission has placed the Consent Agreement 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 Consent Agreement, along with any comments received, and decide whether it should withdraw from the Consent Agreement, modify it, or make the Order final. II. The Respondents Emerson, headquartered in St. Louis, Missouri, is a diversified global manufacturing company that provides a variety of products and services for the industrial, commercial, and consumer markets. Through its Automated Solutions segment, Emerson is a leading manufacturer of industrial equipment and instrumentation, including valves, actuators, regulators, and switchboxes, which it sells to customers in, among others, the oil and gas, refining, chemical, and power generation industries. Pentair, headquartered in London, United Kingdom, with a main U.S. office located in Minneapolis, E:\FR\FM\04MYN1.SGM 04MYN1 Federal Register / Vol. 82, No. 85 / Thursday, May 4, 2017 / Notices pmangrum on DSK3GDR082PROD with NOTICES Minnesota, is a global water, fluid, thermal management, and equipment protection company. The Pentair Valves & Controls business manufactures valves, fittings, actuators, and controls, including switchboxes, for a broad array of industrial markets. III. The Relevant Markets The relevant product market at issue in this transaction is switchboxes. Switchboxes are devices that monitor and control isolation (or ‘‘on/off’’) valves, which control the flow of liquids or gases through pipes in industrial applications, including the oil and gas, chemical, petrochemical, and power generation industries. Switchboxes consist of a hard outer case, which often is made of explosion-proof material, containing switches and other electrical components that detect the position of a valve—that is, whether it is open or closed—and communicate that position via a visual display and/or digital signals to the facility’s workers and control room. Switchboxes are ancillary components that are typically bundled together with a valve, an actuator (a device that physically opens and closes a valve), and other control products into an ‘‘automated’’ isolation valve, which can open and close automatically without manual intervention. Because switchboxes perform a unique and essential role in the efficient and safe operation of industrial plants and facilities, there currently are no practical alternatives to switchboxes. The United States is the relevant geographic market in which to assess the competitive effects of the Acquisition. The United States operates distinctly compared to international markets. Unlike international markets, the domestic market relies heavily on distributors, so competition takes place at both the distributor and customer level. Moreover, customers in the United States have distinct brand preferences for leading switchbox brands. Because switchboxes are frequently used under hazardous conditions in which safety is critical, brand reputation and product reliability are very important to customers. As a result, U.S. customers are unlikely to turn to brands that are not well established in the United States in response to a small but significant nontransitory increase in price. Pentair’s ‘‘Westlock’’ and Emerson’s ‘‘TopWorx’’ switchbox businesses are the two largest suppliers of switchboxes in the United States, with a combined market share of approximately 60%. Other than Westlock and TopWorx, there are few suppliers with appreciable market shares. Each of these suppliers VerDate Sep<11>2014 14:39 May 03, 2017 Jkt 241001 has substantially smaller market shares than either Westlock or TopWorx. In addition, there is a fringe of small manufacturers with very small market shares. The switchboxes produced by these smaller suppliers are not widely accepted by customers in the United States. The Acquisition would substantially increase concentration levels in the U.S. switchbox market and would result in a highly concentrated market. Under the Horizontal Merger Guidelines, the increase in concentration would presumptively create or enhance market power. IV. Effects of the Acquisition Absent a divestiture, the proposed Acquisition would likely harm competition in the U.S. switchbox market. Emerson and Pentair are each other’s closest competitors in this market, and customers benefit from that competition through lower prices and increased product innovation. TopWorx and Westlock are the most widely used and highly regarded brands of switchboxes in the United States and, for many customers, are the only acceptable brands of switchboxes. By eliminating competition between Emerson and Pentair, the Acquisition likely would produce unilateral effects in the form of higher prices and reduced innovation. V. Entry Entry into the U.S. market for switchboxes would not be timely, likely, or sufficient in to deter or counteract the anticompetitive effects of the Acquisition. The competitive strength of TopWorx and Westlock largely reflects their brand reputation for reliability and durability, which could not be quickly replicated by a new entrant. In addition, customers will typically only purchase switchboxes from approved suppliers and are reluctant to consider unproven manufacturers. This is because customers place a premium on safety, and product failure could cause costly and potentially dangerous disruption to critical applications. Any new entrant would need to not only undertake a lengthy and costly process of new product development, but would also need to undergo rigorous vetting, testing, and approval to become viable alternatives for many customers. Given the difficulty in overcoming these obstacles, it is unlikely that a new entrant or existing lower-tier competitor could effectively restore the competition lost through this Acquisition. VI. The Proposed Consent Agreement The proposed Consent Agreement remedies the competitive concerns PO 00000 Frm 00028 Fmt 4703 Sfmt 4703 20891 raised by the Acquisition by requiring Emerson to divest Pentair’s Westlock subsidiary to Crane, a publicly traded manufacturer of highly engineered industrial products, including industrial valves. The proposed divestiture includes everything needed for Crane to compete effectively in the U.S. market for switchboxes. Crane, headquartered in Stamford, Connecticut, is a 162-year-old company with a long history as a significant competitor in the U.S. industrial valves market, providing it with the industry experience and expertise necessary to replace the competition that would be lost due to the Acquisition. Crane’s portfolio of valves complements the switchbox and other valve control products that Westlock manufactures, but Crane does not sell any products that compete with Westlock. Crane has a substantial U.S. infrastructure and customer base, including many of the same customers as Westlock, and preexisting relationships with many of Westlock’s distributors. Crane is thus well positioned to acquire and integrate Westlock and maintain the benefits of competition in this market. Under the terms of the Order, Emerson must divest all of Westlock’s businesses and assets to Crane, including Westlock’s manufacturing facility located in Saddle Brook, New Jersey, and all of the confidential information and intellectual property related to Westlock’s product portfolio. Emerson must also allow Crane to have access to and hire any Westlock employees who were engaged in the research, development, manufacturing, marketing, or sales of Westlock’s products. In order to ensure that the divestiture will succeed, the Order requires the Respondents to enter into a one-year transitional services agreement with Crane for certain functions that Pentair performed for Westlock (such as accounts receivable, tax, legal, payroll, benefits, and other related functions). In order to preserve competition with Emerson, the Order requires Emerson to institute procedures that protect sensitive non-public information regarding Westlock’s business from the Emerson business people in competing lines of business. It also restricts Emerson from instituting patent infringement suits against Crane for the Westlock switchbox product lines that are currently being marketed or in development. The Respondents must complete the divestiture no later than ten days after the consummation of the Acquisition. If the Commission determines that Crane is not an acceptable acquirer, the Order requires the Respondents to unwind the E:\FR\FM\04MYN1.SGM 04MYN1 20892 Federal Register / Vol. 82, No. 85 / Thursday, May 4, 2017 / Notices sale and accomplish a divestiture of Westlock to another Commissionapproved acquirer within 180 days of the date the Order becomes final. Further, the Order allows the Commission to appoint a monitor to ensure that the Respondents expeditiously comply with their obligations under the Order and a Divestiture Trustee to accomplish the divestiture should the Respondents fail to comply with their divestiture obligations. VII. Opportunity for Public Comment The purpose of this analysis is to facilitate public comment on the Consent Agreement to aid the Commission in determining whether it should make the Consent Agreement final. This analysis is not intended to constitute an official interpretation of the proposed Consent Agreement and does not modify its terms in any way. By direction of the Commission. Donald S. Clark, Secretary. [FR Doc. 2017–08965 Filed 5–3–17; 8:45 am] BILLING CODE 6750–01–P DEPARTMENT OF HEALTH AND HUMAN SERVICES Agency for Healthcare Research and Quality Agency Information Collection Activities: Proposed Collection; Comment Request Agency for Healthcare Research and Quality, HHS. ACTION: Notice. AGENCY: This notice announces the intention of the Agency for Healthcare Research and Quality (AHRQ) to request that the Office of Management and Budget (OMB) approve the proposed information collection project ‘‘The Reengineered Visit for Primary Care (AHRQ REV).’’ This proposed information collection was previously published in the Federal Register on February 13, 2017 and allowed 60 days for public comment. AHRQ received one comment from the public. The purpose of this notice is to allow an additional 30 days for public comment. DATES: Comments on this notice must be received by June 5, 2017. ADDRESSES: Written comments should be submitted to: AHRQ’s OMB Desk Officer by fax at (202) 395–6974 (attention: AHRQ’s desk officer) or by email at OIRA_submission@ omb.eop.gov (attention: AHRQ’s desk officer). pmangrum on DSK3GDR082PROD with NOTICES SUMMARY: VerDate Sep<11>2014 14:39 May 03, 2017 Jkt 241001 FOR FURTHER INFORMATION CONTACT: Doris Lefkowitz, AHRQ Reports Clearance Officer, (301) 427–1477, or by email at doris.lefkowitz@AHRQ.hhs.gov. SUPPLEMENTARY INFORMATION: Proposed Project The Re-Engineered Visit for Primary Care (AHRQ REV) In accordance with the Paperwork Reduction Act, 44 U.S.C. 3501–3521, AHRQ invites the public to comment on this proposed information collection. This project, The Re-engineered Visit for Primary Care (AHRQ REV), directly addresses the agency’s goal to conduct research to enhance the quality of health care and reduce avoidable readmissions, which are a major indicator of poor quality and patient safety. Research from AHRQ’s Healthcare Cost and Utilization Project (HCUP) indicates that in 2011 there were approximately 3.3 million adult hospital readmissions in the United States. Adults covered by Medicare have the highest readmission rate (17.2 per 100 admissions), followed by adults covered by Medicaid (14.6 per 100 admissions) and privately insured adults (8.7 per 100 admissions). High rates of readmissions are a major patient safety problem and are associated with a range of adverse events, such as prescribing errors and misdiagnoses of conditions in the hospital and ambulatory care settings. Collectively these readmissions are associated with $41.3 billion in annual hospital costs, many of which potentially could be avoided. In recent years, payer and provider efforts to reduce readmissions have proliferated. Many of these national programs have been informed or guided by evidence-based research, toolkits and guides, such as AHRQ’s RED (ReEngineered Discharge), STAAR (STate Action on Avoidable Readmission), AHRQ’s Project BOOST (Better Outcomes by Optimizing Safe Transitions), the Hospital Guide to Reducing Medicaid Readmissions, and Eric Coleman’s Care Transitions Intervention. These efforts have largely focused on enhancing practices occurring within the hospital setting, including the discharge process transitions among providers and between settings of care. While many of these efforts have recognized the critical role of primary care in managing care transitions, they have not had an explicit focus on enhancing primary care with the aim of reducing avoidable readmissions. Evidence-based guidance to reduce readmissions and improve patient safety are comparatively lacking for the PO 00000 Frm 00029 Fmt 4703 Sfmt 4703 primary care setting. This gap in the literature is becoming more pronounced as primary care is increasingly serving as the key integrator across the health system as part of payment and delivery system reforms. This research project aims to address the important and unfulfilled need to improve patient safety and reduce avoidable readmissions within the primary care context. AHRQ’s goals in supporting this 30month project are to build on the knowledge base from the inpatient settings, add to the expanding evidence base on preventing readmissions by focusing on the primary care setting, and provide insight on the components and themes that should be part of a reengineered visit in primary care. This work will ultimately inform an effective intervention that can be tested in a diverse set of primary care clinics. To meet AHRQ’s goals and objectives, the agency awarded a task order to John Snow, Inc. (JSI) to conduct qualitative research using quality improvement to investigate the primary care-based transitional care workflow from the primary care staff, patient, and community agency perspective. This research has the following goals: 1. Analyze current processes in the primary care visit associated with hospital discharge; and 2. Identify components of the reengineered visit. This study is being conducted by AHRQ through its contractor pursuant to AHRQ’s statutory authority to conduct and support research on health care and on systems for the delivery of such care, including activities with respect to the quality, effectiveness, efficiency, appropriateness and vale of health care services and with respect to quality measurement and improvement. 42 U.S.C 299a(a)(1) and (2). Method of Collection To analyze current processes in the primary care visit associated with hospital discharge, the data collection is separated into seven smaller data collection activities to minimize research participant burden while still allowing for the collection of necessary data. Each of these tasks will be conducted at nine primary care sites: 1. Primary care site organizational characteristics survey: The purpose of this background information on the primary care site’s organizational characteristics is to offer context for the work flow mapping. It will help make the work flow mapping process more efficient and reduce burden by only requesting information that is already known by each site contact. One person E:\FR\FM\04MYN1.SGM 04MYN1

Agencies

[Federal Register Volume 82, Number 85 (Thursday, May 4, 2017)]
[Notices]
[Pages 20889-20892]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08965]


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FEDERAL TRADE COMMISSION

[File No. 161 0221; Docket No. C-4615]


Emerson Electric Co. and Pentair plc; Analysis 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 methods of competition. 
The attached Analysis to Aid Public Comment describes both the 
allegations in the complaint and the terms of the consent orders--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before May 30, 2017.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/emersonelectricconsent online or on 
paper, by following the instructions in the Request for Comment part of 
the SUPPLEMENTARY INFORMATION section below. Write ``In the Matter of 
Emerson Electric Co. and Pentair plc, File No. 161 0221'' on your 
comment and file your comment online at https://ftcpublic.commentworks.com/ftc/emersonelectricconsent by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, write ``In the Matter of Emerson Electric Co. and Pentair 
plc, File No. 161 0221'' on your comment and on the envelope, and mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: Jonathan Platt (212-607-2819) or Ryan 
Harsch (212-607-2805), FTC, Northeast Region, One Bowling Green, Suite 
318, New York, NY 10004.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing 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

[[Page 20890]]

complaint. An electronic copy of the full text of the consent agreement 
package can be obtained from the FTC Home Page (for April 28, 2017), on 
the World Wide Web, at https://www.ftc.gov/os/actions.shtm.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before May 30, 2017. 
Write ``In the Matter of Emerson Electric Co. and Pentair plc, File No. 
161 0221'' on your comment. Your comment--including your name and your 
state--will be placed on the public record of this proceeding, 
including, to the extent practicable, on the public Commission Web 
site, at https://www.ftc.gov/policy/public-comments. As a matter of 
discretion, the Commission tries to remove individuals' home contact 
information from comments before placing them on the Commission Web 
site.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/emersonelectricconsent by following the instructions on the web-
based form. If this Notice appears at https://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you file your comment on paper, write ``In the Matter of Emerson 
Electric Co. and Pentair plc, File No. 161 0221'' on your comment and 
on the envelope, and mail it to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite 
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
D), Washington, DC. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible FTC 
Web site at www.ftc.gov, you are solely responsible for making sure 
that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else'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. You are also 
solely responsible for making sure that your comment does not include 
any sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 
16 CFR 4.10(a)(2)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Once your comment has been posted on the public FTC Web site--as 
legally required by FTC Rule 4.9(b)--we cannot redact or remove your 
comment from the FTC Web site, unless you submit a confidentiality 
request that meets the requirements for such treatment under FTC Rule 
4.9(c), and the General Counsel grants that request in accordance with 
the law and the public interest. 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). In particular, the written request for confidential treatment 
that accompanies the comment must include the factual and legal basis 
for the request, and must identify the specific portions of the comment 
to be withheld from the public record. See FTC Rule 4.9(c).
    Visit the Commission Web site at https://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that 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 on or before May 30, 2017. You can find more information, 
including routine uses permitted by the Privacy Act, in the 
Commission's privacy policy, at https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

I. Introduction

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Orders (``Consent 
Agreement'') from Emerson Electric Co. (``Emerson'') and Pentair plc 
(``Pentair'') (collectively, the ``Respondents'') that is designed to 
remedy the anticompetitive effects that would likely result from 
Emerson's proposed acquisition of Pentair's valves and controls 
business.
    Pursuant to a Share Purchase Agreement, dated as of August 18, 
2016, Emerson proposes to acquire the equity interests of certain 
subsidiaries of Pentair in exchange for cash considerations of 
approximately $3.15 billion (the ``Acquisition''). The proposed 
Acquisition would combine the two largest suppliers of switchboxes, 
which are industrial valve control products, in the United States. The 
Commission's Complaint alleges 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 substantially lessening competition in the 
United States market for switchboxes.
    The proposed Decision and Order (``Order'') requires Emerson to 
divest Pentair's switchbox manufacturer subsidiary, Westlock Controls 
Corporation (``Westlock''), to Crane Co. (``Crane'') no later than ten 
days after the Acquisition is consummated. The divestiture requires 
Emerson to transfer to Crane all of the facilities, personnel, 
confidential information, and intellectual property associated with the 
design, manufacture, and sale of Westlock's products, which will allow 
Crane to effectively compete in the switchbox market.
    The Commission has placed the Consent Agreement 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 Consent 
Agreement, along with any comments received, and decide whether it 
should withdraw from the Consent Agreement, modify it, or make the 
Order final.

II. The Respondents

    Emerson, headquartered in St. Louis, Missouri, is a diversified 
global manufacturing company that provides a variety of products and 
services for the industrial, commercial, and consumer markets. Through 
its Automated Solutions segment, Emerson is a leading manufacturer of 
industrial equipment and instrumentation, including valves, actuators, 
regulators, and switchboxes, which it sells to customers in, among 
others, the oil and gas, refining, chemical, and power generation 
industries.
    Pentair, headquartered in London, United Kingdom, with a main U.S. 
office located in Minneapolis,

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Minnesota, is a global water, fluid, thermal management, and equipment 
protection company. The Pentair Valves & Controls business manufactures 
valves, fittings, actuators, and controls, including switchboxes, for a 
broad array of industrial markets.

III. The Relevant Markets

    The relevant product market at issue in this transaction is 
switchboxes. Switchboxes are devices that monitor and control isolation 
(or ``on/off'') valves, which control the flow of liquids or gases 
through pipes in industrial applications, including the oil and gas, 
chemical, petrochemical, and power generation industries. Switchboxes 
consist of a hard outer case, which often is made of explosion-proof 
material, containing switches and other electrical components that 
detect the position of a valve--that is, whether it is open or closed--
and communicate that position via a visual display and/or digital 
signals to the facility's workers and control room. Switchboxes are 
ancillary components that are typically bundled together with a valve, 
an actuator (a device that physically opens and closes a valve), and 
other control products into an ``automated'' isolation valve, which can 
open and close automatically without manual intervention. Because 
switchboxes perform a unique and essential role in the efficient and 
safe operation of industrial plants and facilities, there currently are 
no practical alternatives to switchboxes.
    The United States is the relevant geographic market in which to 
assess the competitive effects of the Acquisition. The United States 
operates distinctly compared to international markets. Unlike 
international markets, the domestic market relies heavily on 
distributors, so competition takes place at both the distributor and 
customer level. Moreover, customers in the United States have distinct 
brand preferences for leading switchbox brands. Because switchboxes are 
frequently used under hazardous conditions in which safety is critical, 
brand reputation and product reliability are very important to 
customers. As a result, U.S. customers are unlikely to turn to brands 
that are not well established in the United States in response to a 
small but significant non-transitory increase in price.
    Pentair's ``Westlock'' and Emerson's ``TopWorx'' switchbox 
businesses are the two largest suppliers of switchboxes in the United 
States, with a combined market share of approximately 60%. Other than 
Westlock and TopWorx, there are few suppliers with appreciable market 
shares. Each of these suppliers has substantially smaller market shares 
than either Westlock or TopWorx. In addition, there is a fringe of 
small manufacturers with very small market shares. The switchboxes 
produced by these smaller suppliers are not widely accepted by 
customers in the United States. The Acquisition would substantially 
increase concentration levels in the U.S. switchbox market and would 
result in a highly concentrated market. Under the Horizontal Merger 
Guidelines, the increase in concentration would presumptively create or 
enhance market power.

IV. Effects of the Acquisition

    Absent a divestiture, the proposed Acquisition would likely harm 
competition in the U.S. switchbox market. Emerson and Pentair are each 
other's closest competitors in this market, and customers benefit from 
that competition through lower prices and increased product innovation. 
TopWorx and Westlock are the most widely used and highly regarded 
brands of switchboxes in the United States and, for many customers, are 
the only acceptable brands of switchboxes. By eliminating competition 
between Emerson and Pentair, the Acquisition likely would produce 
unilateral effects in the form of higher prices and reduced innovation.

V. Entry

    Entry into the U.S. market for switchboxes would not be timely, 
likely, or sufficient in to deter or counteract the anticompetitive 
effects of the Acquisition. The competitive strength of TopWorx and 
Westlock largely reflects their brand reputation for reliability and 
durability, which could not be quickly replicated by a new entrant. In 
addition, customers will typically only purchase switchboxes from 
approved suppliers and are reluctant to consider unproven 
manufacturers. This is because customers place a premium on safety, and 
product failure could cause costly and potentially dangerous disruption 
to critical applications. Any new entrant would need to not only 
undertake a lengthy and costly process of new product development, but 
would also need to undergo rigorous vetting, testing, and approval to 
become viable alternatives for many customers. Given the difficulty in 
overcoming these obstacles, it is unlikely that a new entrant or 
existing lower-tier competitor could effectively restore the 
competition lost through this Acquisition.

VI. The Proposed Consent Agreement

    The proposed Consent Agreement remedies the competitive concerns 
raised by the Acquisition by requiring Emerson to divest Pentair's 
Westlock subsidiary to Crane, a publicly traded manufacturer of highly 
engineered industrial products, including industrial valves. The 
proposed divestiture includes everything needed for Crane to compete 
effectively in the U.S. market for switchboxes.
    Crane, headquartered in Stamford, Connecticut, is a 162-year-old 
company with a long history as a significant competitor in the U.S. 
industrial valves market, providing it with the industry experience and 
expertise necessary to replace the competition that would be lost due 
to the Acquisition. Crane's portfolio of valves complements the 
switchbox and other valve control products that Westlock manufactures, 
but Crane does not sell any products that compete with Westlock. Crane 
has a substantial U.S. infrastructure and customer base, including many 
of the same customers as Westlock, and pre-existing relationships with 
many of Westlock's distributors. Crane is thus well positioned to 
acquire and integrate Westlock and maintain the benefits of competition 
in this market.
    Under the terms of the Order, Emerson must divest all of Westlock's 
businesses and assets to Crane, including Westlock's manufacturing 
facility located in Saddle Brook, New Jersey, and all of the 
confidential information and intellectual property related to 
Westlock's product portfolio. Emerson must also allow Crane to have 
access to and hire any Westlock employees who were engaged in the 
research, development, manufacturing, marketing, or sales of Westlock's 
products. In order to ensure that the divestiture will succeed, the 
Order requires the Respondents to enter into a one-year transitional 
services agreement with Crane for certain functions that Pentair 
performed for Westlock (such as accounts receivable, tax, legal, 
payroll, benefits, and other related functions). In order to preserve 
competition with Emerson, the Order requires Emerson to institute 
procedures that protect sensitive non-public information regarding 
Westlock's business from the Emerson business people in competing lines 
of business. It also restricts Emerson from instituting patent 
infringement suits against Crane for the Westlock switchbox product 
lines that are currently being marketed or in development.
    The Respondents must complete the divestiture no later than ten 
days after the consummation of the Acquisition. If the Commission 
determines that Crane is not an acceptable acquirer, the Order requires 
the Respondents to unwind the

[[Page 20892]]

sale and accomplish a divestiture of Westlock to another Commission-
approved acquirer within 180 days of the date the Order becomes final. 
Further, the Order allows the Commission to appoint a monitor to ensure 
that the Respondents expeditiously comply with their obligations under 
the Order and a Divestiture Trustee to accomplish the divestiture 
should the Respondents fail to comply with their divestiture 
obligations.

VII. Opportunity for Public Comment

    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement to aid the Commission in determining whether it 
should make the Consent Agreement final. This analysis is not intended 
to constitute an official interpretation of the proposed Consent 
Agreement and does not modify its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-08965 Filed 5-3-17; 8:45 am]
 BILLING CODE 6750-01-P
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