United States v. Showa Denko K.K., SGL Carbon SE, and SGL GE Carbon Holding LLC (USA); Proposed Final Judgment and Competitive Impact Statement, 48255-48267 [2017-22443]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 82, Number 199 (Tuesday, October 17, 2017)]
[Notices]
[Pages 48255-48267]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22443]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Showa Denko K.K., SGL Carbon SE, and SGL GE 
Carbon Holding LLC (USA); Proposed Final Judgment and Competitive 
Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Hold Separate Stipulation and Order, and Competitive

[[Page 48256]]

Impact Statement have been filed with the United States District Court 
for the District of Columbia in United States of America v. Showa Denko 
K.K., SGL Carbon SE, and SGL GE Carbon Holding LLC (USA), Civil Action 
No. 1:17-cv-1992. On September 27, 2017, the United States filed a 
Complaint alleging that Showa Denko K.K.'s (``SDK'') proposed 
acquisition of the global graphite electrodes business of SGL Carbon SE 
(``SGL'') would violate Section 7 of the Clayton Act, 15 U.S.C. 18. The 
proposed Final Judgment, filed at the same time as the Complaint, 
requires SDK to divest SGL's entire U.S. graphite electrodes business.
    Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement are available for inspection on the Antitrust 
Division's Web site at https://www.justice.gov/atr and at the Office of 
the Clerk of the United States District Court for the District of 
Columbia. Copies of these materials may be obtained from the Antitrust 
Division upon request and payment of the copying fee set by Department 
of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, including the name of the submitter, and 
responses thereto, will be posted on the Antitrust Division's website, 
filed with the Court, and, under certain circumstances, published in 
the Federal Register. Comments should be directed to Maribeth Petrizzi, 
Chief, Litigation II Section, Antitrust Division, Department of 
Justice, 450 Fifth Street NW., Suite 8700, Washington, DC 20530 
(telephone: 202-307-0924).

Patricia A. Brink,
Director of Civil Enforcement.

United States District Court for the District of Columbia

    United States of America, U.S. Department of Justice, Antitrust 
Division, 450 Fifth Street NW., Suite 8700, Washington, DC 20530, 
Plaintiff, v. Showa Denko K.K., 13-9 Shiba Daimon 1-chome, Minato-
ku, Tokyo 105-8518, Japan, SGL Carbon SE, Soehnleinstrasse 8, 65201 
Weisbaden, Germany, and SGL GE Carbon Holding LLC (USA), 10130 
Perimeter Parkway, Suite 500, Charlotte, NC 28216, Defendants.

Case No: 1:17-cv-01992
Judge: James E. Boasberg

COMPLAINT

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil antitrust 
action to enjoin Showa Denko K.K.'s (``SDK'') proposed acquisition of 
SGL Carbon SE's (``SGL Carbon'') global graphite electrode business and 
to obtain other equitable relief. The United States alleges as follows:

I. NATURE OF THE ACTION

    1. On October 20, 2016, SDK announced an agreement to acquire SGL 
Carbon's global graphite electrode business for approximately $264.5 
million. SDK and SGL Carbon manufacture and sell large ultra-high power 
(``UHP'') graphite electrodes, a critical input needed to melt scrap 
steel in electric arc furnaces (``EAFs'') at steel mills. SDK and SGL 
Carbon are two of the three leading suppliers of large UHP graphite 
electrodes utilized in EAFs in the United States and have a combined 
market share of approximately 56 percent.
    2. The proposed acquisition would eliminate vigorous head-to-head 
competition between SDK and SGL Carbon for the business of U.S. EAF 
customers. For a significant number of U.S. EAF steel mills, SDK and 
SGL Carbon are two of the top suppliers of large UHP graphite 
electrodes, and the competition between SDK and SGL Carbon has resulted 
in lower prices, higher quality electrodes, and better service. 
Notably, SDK and SGL Carbon are two of only three firms that operate 
manufacturing facilities in North America in an industry where a local 
manufacturing presence is important to customers to ensure reliability 
of supply at an affordable cost. The proposed acquisition likely would 
give SDK the ability to raise prices or decrease the quality of 
delivery and service provided to these customers.
    3. As a result, the proposed acquisition likely would substantially 
lessen competition in the manufacture and sale of large UHP graphite 
electrodes sold to EAF steel mills in the United States in violation of 
Section 7 of the Clayton Act, 15 U.S.C. 18, and should be enjoined.

II. JURISDICTION AND VENUE

    4. The United States brings this action pursuant to Section 15 of 
the Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain 
defendants from violating Section 7 of the Clayton Act, 15 U.S.C. 18.
    5. Defendants manufacture and sell large UHP graphite electrodes 
throughout the United States. They are engaged in a regular, 
continuous, and substantial flow of interstate commerce, and their 
activities in the manufacture and sale of large UHP graphite electrodes 
have a substantial effect upon interstate commerce. The Court has 
subject matter jurisdiction over this action pursuant to Section 15 of 
the Clayton Act, 15 U.S.C. 25, and 28 U.S.C. 1331, 1337(a), and 1345.
    6. Defendants have consented to venue and personal jurisdiction in 
this district. This court has personal jurisdiction over each defendant 
and venue is proper in this district under Section 12 of the Clayton 
Act, 15 U.S.C. 22, and 28 U.S.C. 1391(c).

III. DEFENDANTS AND THE PROPOSED ACQUISITION

    7. Defendant SDK is a corporation organized under the laws of Japan 
and headquartered in Tokyo, Japan. SDK is one of Japan's leading 
chemical companies and graphite electrodes are a primary line of 
business. SDK, which operates in approximately 14 countries, had 
revenues of approximately $5.8 billion in 2016. SDK's worldwide 
revenues from sales of graphite electrodes in 2016 were $248 million, 
and its U.S. revenues from sales of graphite electrodes in 2016 were 
approximately $85 million.
    8. Defendant SGL Carbon is a publicly-owned company organized under 
the laws of Germany and headquartered in Wiesbaden, Germany. SGL Carbon 
is a leading manufacturer of carbon-based products, ranging from carbon 
and graphite products to carbon fibers and composites, and its 
operations extend to 34 countries. In 2016, SGL Carbon had global 
revenues of approximately $885 million. SGL Carbon's worldwide revenues 
from sales of graphite electrodes in 2016 were approximately $326.6 
million, and its U.S. revenues from sales of graphite electrodes in 
2016 were approximately $58.6 million.
    9. Defendant SGL GE Carbon Holding LLC (USA) (``SGL US''), an 
indirect, wholly-owned subsidiary of SGL Carbon, is a Delaware limited 
liability company headquartered in Charlotte, North Carolina. SGL US is 
the sole shareholder of SGL GE Carbon LLC, which owns the assets of SGL 
US's operations in the United States, including SGL's Hickman and Ozark 
graphite electrode plants.
    10. Pursuant to an October 20, 2016 Sale and Purchase Agreement, 
SDK agreed to acquire all of the corporate entities comprising SGL 
Carbon's graphite electrodes global operations, including SGL US, for 
approximately $264.5 million.

IV. TRADE AND COMMERCE

A. Industry Background

    11. Graphite electrodes are used as conductors of electricity to 
generate sufficient heat to melt scrap metal in EAFs or to refine steel 
in ladle

[[Page 48257]]

metallurgical furnaces. In a typical EAF operation, a series of 
electrodes (usually three) are attached to a crane-like device with 
connecting pins to form columns that are suspended over a large bucket 
of scrap steel. Large amounts of electricity are sent through the 
electrodes and the resulting heat melts the scrap into liquid.
    12. Graphite electrodes are consumed as they are used and 
continually need to be replaced with fresh electrodes. Electrodes are 
designed in a range of sizes to fit the characteristics of each furnace 
and are suited to the electrical properties of a specific EAF. In 
particular, the opening through which electrodes are inserted into the 
furnace is only wide enough to admit electrodes of a certain diameter.
    13. Graphite electrodes are subdivided into three grades: low 
power, high power, and UHP, where grade refers to the level of current-
carrying capacity of the graphite electrode. EAFs typically utilize 
large UHP graphite electrodes that are between 18 and 32 inches in 
diameter and are characterized by an ability to withstand high currents 
and significant thermal stasis. Given that they are the most 
sophisticated products used for the most demanding steelmaking 
applications, large UHP graphite electrodes are produced by a smaller 
number of manufacturers than low power and high power graphite 
electrodes.
    14. EAF steel mills, which are part of a vital U.S. industry 
involved in the manufacture and sale of steel and steel products used 
for many applications, represent an average of 45 percent of all 
domestic steel production. Large UHP graphite electrodes constitute a 
material operational input cost to these EAF steel mills that affects 
their ability to compete vigorously with steel made in blast furnaces 
both domestically and internationally. Over the past three years, U.S. 
EAF steel mills collectively averaged $262 million in large UHP 
graphite electrode purchases, and that number is expected to increase 
in the coming years due to a recent increase in steel demand and a 
decrease in the volume of steel imported into the United States.
    15. Large UHP graphite electrodes are purchased through an annual 
bid process where manufacturers are invited to bid for an entire year 
or partial year's supply. Manufacturers are qualified through a 
trialing process where graphite electrodes are evaluated based on both 
commercial risks and the total cost per ton of melted steel. EAF 
customers evaluate electrode suppliers based on the reliability and 
efficiency of their electrodes, the timeliness of electrode delivery, 
the supplier's commercial business practices, and ongoing technical 
service capabilities. Many customers prefer qualified suppliers with 
domestic manufacturing capability (which helps ensure reliable on-time 
delivery) and a robust local service operation (which enables prompt 
deployment of established technical expertise and support). EAF 
customers typically avoid suppliers that develop a reputation for 
graphite electrode breakages even when they offer electrodes at steep 
discounts because the costs of temporarily shutting down a furnace to 
remove broken electrode pieces can be significantly greater than the 
potential short-term savings from cheaper electrodes.
    16. Large UHP graphite electrodes are priced by the pound, and 
quantities are described using metric tons. A typical U.S. EAF furnace 
operating at an average utilization rate may spend up to $4 million per 
year on electrodes for that furnace. Electrodes usually are ordered in 
advance and are expected to be shipped in a timely manner by truck to 
each steel mill, where they are stored until used, although some 
customers have consignment arrangements with manufacturers that keep 
inventories of graphite electrodes in the manufacturers' own 
warehouses.

B. The Relevant Product Market

    17. There are no functional substitutes for large UHP graphite 
electrodes for U.S. EAF steel mills. Without large UHP graphite 
electrodes, an EAF steel mill cannot be operated and must be idled. 
Moreover, each EAF steel mill requires large UHP graphite electrodes of 
a specific diameter; a customer cannot substitute a different size 
graphite electrode than that for which its EAF is outfitted because the 
electrode would not fit and could not handle the level of current. 
Thus, it is likely that every individual size of large UHP graphite 
electrodes is a separate relevant product market. Because market 
participation by manufacturers is similar, and potential 
anticompetitive effects likely are similar across the entire range of 
sizes, all large UHP graphite electrodes can be grouped together in a 
single market for purposes of analysis.
    18. A small but significant increase in the price of large UHP 
graphite electrodes sold to EAF steel mills would not cause customers 
of such electrodes to substitute a different kind of electrode or any 
other product, or to reduce purchases of such electrodes in volumes 
sufficient to make such a price increase unprofitable. Accordingly, the 
manufacture and sale of large UHP graphite electrodes sold to EAF steel 
mills is a line of commerce and relevant product market within the 
meaning of Section 7 of the Clayton Act.

C. The Relevant Geographic Market

    19. Individual U.S. EAF customers solicit bids from large UHP 
graphite electrode producers and these producers develop individualized 
bids based on each U.S. EAF customer Request for Proposal (``RFP''). 
This bidding process enables large UHP graphite electrode producers to 
engage in ``price discrimination,'' i.e., to charge different prices to 
different EAF customers. A small but significant increase in the prices 
of large UHP graphite electrodes can therefore be targeted to customers 
in the United States, and would not cause a sufficient number of these 
customers to buy electrodes from customers outside the United States so 
as to make such a price increase unprofitable. Since the availability 
of domestic technical services is important to U.S. customers, these 
customers would not buy electrodes from customers outside the United 
States. Accordingly, the United States is a relevant geographic market 
within the meaning of Section 7 of the Clayton Act.

D. Anticompetitive Effects

    20. SDK and SGL Carbon have market shares of approximately 35 and 
21 percent, respectively, in the relevant market. The third major 
seller of large UHP graphite electrodes to U.S. EAF customers has a 
market share of 22 percent. The remaining competitors combined account 
for only 22 percent of the market and are comprised of firms based in 
Japan, India, Russia, and China.
    21. As articulated in the Horizontal Merger Guidelines issued by 
the Department of Justice and the Federal Trade Commission (the 
``Horizontal Merger Guidelines''), the Herfindahl-Hirschman Index 
(``HHI''), discussed in Appendix A, is a widely-used measure of market 
concentration. Market concentration is often a useful indicator of the 
level of competitive vigor in a market and the likely competitive 
effects of a merger. The more concentrated a market, the more likely it 
is that a transaction would result in a meaningful reduction in 
competition and harm consumers. Markets in which the HHI exceeds 2,500 
points are considered highly concentrated, and transactions that result 
in highly concentrated markets and increase the HHI by more than 200 
points are presumed to be likely to enhance market power.

[[Page 48258]]

    22. In the market for the manufacture and sale of large UHP 
graphite electrodes used in U.S. EAF steel mills, the pre-merger HHI is 
2230 and the post-merger HHI is 3693, representing an increase in the 
HHI of 1,463. Under the Horizontal Merger Guidelines, the proposed 
acquisition will result in a highly concentrated market and is thus 
presumed likely to enhance market power.
    23. In addition to increasing concentration, SDK's acquisition of 
SGL Carbon's global graphite electrode business would eliminate head-
to-head competition between SDK and SGL Carbon to supply large UHP 
graphite electrodes to U.S. EAF steel mills. SDK and SGL Carbon both 
have a strong reputation for high-quality graphite electrodes, a robust 
local manufacturing presence, an established delivery infrastructure, 
and superior technical service capabilities and support, including 
proprietary software specifically designed to assist steel mills in the 
installation and efficient maintenance of electrodes within their EAFs. 
SDK and SGL Carbon compete directly on price, quality, delivery, and 
technical service, and the competition between them has directly 
benefitted U.S. EAF customers.
    24. Only one other significant competitor besides SDK and SGL 
Carbon sells large UHP graphite electrodes in the U.S. and has a 
similar reputation for quality, shipment and delivery logistics, and 
local technical service. The transaction is likely to lead to higher 
prices because, for most customers, it will reduce the number of 
significant bidders from three to two.
    25. Although other firms have participated in the U.S. market with 
limited sales, none of these firms individually or collectively are 
positioned to constrain a unilateral exercise of market power by SDK 
after the acquisition. The most significant of these firms, based in 
Japan, has a long history of sales of large UHP graphite electrodes in 
the United States, a good reputation for quality, and an enduring small 
presence in the market. However, it and the remaining small firms that 
have made sales to U.S. EAF steel mills are disadvantaged by their lack 
of domestic manufacturing capability, limited delivery and technical 
service infrastructure, and high costs. Some additionally are 
disadvantaged because of lower product quality. The response of other 
participants in the relevant market therefore would not be sufficient 
to constrain a unilateral exercise of market power by SDK after the 
acquisition.
    26. For all of these reasons, the proposed transaction likely would 
substantially lessen competition in the manufacture and sale of large 
UHP graphite electrodes sold to U.S. EAF steel mills and lead to higher 
prices and decreased quality of delivery and service.

E. Difficulty of Entry

    27. Entry of additional competitors into the manufacture and sale 
of large UHP graphite electrodes sold to U.S. EAF steel mills is 
unlikely to be timely, likely, or sufficient to prevent the harm to 
competition caused by the elimination of SGL Carbon as an independent 
supplier. Over the past two decades, several firms have attempted to 
make a meaningful entry into the U.S. market, notably from India and 
China, but have not been able to make substantial sales or become 
preferred suppliers.
    28. Firms attempting to enter into the manufacture and sale of 
large UHP graphite electrodes sold to U.S. EAF steel mills face 
significant entry barriers in terms of cost and time. First, a new 
entrant into this business must be able to construct a manufacturing 
facility, which entails substantial time and expense. Second, such an 
entrant must have the technical capabilities necessary to design and 
manufacture high quality graphite electrodes that meet customer 
requirements for performance and reliability. Third, both new entrants 
and graphite electrode manufacturers who do not currently participate 
in the U.S. market must typically demonstrate competence to EAF 
customers in the U.S. through a lengthy qualification and trial period 
during which the supplier must establish a strong performance record 
and avoid product breakages that can cause EAF outages. Fourth, an 
entrant must have a strong local infrastructure in place to assure 
customers of reliable delivery and the prompt deployment of qualified 
expertise, including technical services associated with installation 
and maintenance of the electrodes.
    29. As a result of these barriers, entry into the market for the 
manufacture and sale of large UHP graphite electrodes sold to U.S. EAF 
steel mills would not be timely, likely, or sufficient to defeat the 
substantial lessening of competition that likely would result from 
SDK's acquisition of SGL Carbon's global graphite electrode business.

V. VIOLATION ALLEGED

    30. The acquisition of SGL Carbon's global graphite electrode 
business by SDK likely would substantially lessen competition for the 
manufacture and sale of large UHP graphite electrodes sold to U.S. EAF 
steel mills in violation of Section 7 of the Clayton Act, 15 U.S.C. 18.
    31. Unless enjoined, the transaction likely would have the 
following anticompetitive effects, among others:
    a. competition between SDK and SGL Carbon in the market for the 
manufacture and sale of large UHP graphite electrodes sold to U.S. EAF 
steel mills would be eliminated; and
    b. prices for large UHP graphite electrodes sold to U.S. EAF steel 
mills likely would be less favorable, and quality of delivery and 
service likely would decline.

VI. REQUESTED RELIEF

    32. The United States requests that this Court:
    a. adjudge and decree SDK's proposed acquisition of SGL Carbon's 
global graphite electrode business to be unlawful and in violation of 
Section 7 of the Clayton Act, 15 U.S.C. 18;
    b. preliminarily and permanently enjoin and restrain defendants and 
all persons acting on their behalf from consummating the proposed 
acquisition or from entering into or carrying out any contract, 
agreement, plan, or understanding, the effect of which would be to 
combine SGL Carbon's global graphite electrode business with the 
operations of SDK;
    c. award the United States its costs of this action; and
    d. award the United States such other and further relief as the 
Court deems just and proper.

Respectfully submitted,

FOR PLAINTIFF UNITED STATES OF AMERICA

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Andrew M. Finch,
Acting Assistant Attorney General.

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Bernard A. Nigro, Jr.,
Deputy Assistant Attorney General.

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Patricia A. Brink,
Director of Civil Enforcement.

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Maribeth Petrizzi,
Chief, Litigation II Section.

D.C. Bar # 435204

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David E. Altschuler,
Assistant Chief, Litigation II Section.

D.C. Bar # 983023

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Bashiri Wilson,*
James K. Foster

Attorneys, U.S. Department of Justice, Antitrust Division, 
Litigation II Section, 450 Fifth Street NW., Suite 8700, Washington, 
DC

[[Page 48259]]

20530, Tel.: (202) 514-8362, Fax: (202) 514-9033, Email: 
bashiri.wilson@usdoj.gov.

*Attorney of Record

Dated: September 27, 2017

Appendix A

DEFINITION OF HHI

    The term ``HHI'' means the Herfindahl-Hirschman Index, a 
commonly accepted measure of market concentration. The HHI is 
calculated by squaring the market share of each firm competing in 
the market and then summing the resulting numbers. For example, for 
a market consisting of four firms with shares of 30, 30, 20, and 20 
percent, the HHI is 2,600 (30\2\ + 30\2\ + 20\2\ + 20\2\ = 2,600). 
The HHI takes into account the relative size distribution of the 
firms in a market. It approaches zero when a market is occupied by a 
large number of firms of relatively equal size and reaches a maximum 
of 10,000 points when it is controlled by a single firm. The HHI 
increases both as the number of firms in the market decreases and as 
the disparity in size between those firms increases.
    Markets in which the HHI is between 1,500 and 2,500 points are 
considered to be moderately concentrated and markets in which the 
HHI is in excess of 2,500 points are considered to be highly 
concentrated. See Horizontal Merger Guidelines Sec.  5.3 (issued by 
the U.S. Department of Justice and the Federal Trade Commission on 
August 19, 2010). Transactions that increase the HHI by more than 
200 points in highly concentrated markets will be presumed likely to 
enhance market power. Id.

United States District Court for the District Of Columbia

    United States of America, Plaintiff, v. Showa Denko K.K., SGL 
Carbon SE, and SGL GE Carbon Holding LLC (USA), Defendants.

Case No: 1:17-cv-01992

Judge: James E. Boasberg

COMPETITIVE IMPACT STATEMENT

    Plaintiff United States of America (``United States''), pursuant to 
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or 
``Tunney Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact 
Statement relating to the proposed Final Judgment submitted for entry 
in this civil antitrust proceeding.

I. NATURE AND PURPOSE OF THE PROCEEDING

    On October 20, 2016, defendants Showa Denko K.K. (``SDK''), SGL 
Carbon SE (``SGL Carbon''), and SGL GE Carbon Holding LLC (USA) (``SGL 
US'') entered into an agreement pursuant to which SDK agreed to acquire 
SGL Carbon's global graphite electrode business for approximately 
$264.5 million.
    The United States filed a civil antitrust Complaint on September 
27, 2017 seeking to enjoin the proposed acquisition. The Complaint 
alleges that the likely effect of this acquisition would be to lessen 
competition substantially for the manufacture and sale of large ultra-
high power (``UHP'') graphite electrodes sold to electric arc furnace 
(EAF) steel mills in the United States in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18. This loss of competition likely would give 
SDK the ability and incentive to increase prices or decrease the 
quality of delivery and service provided to U.S. EAF customers.
    At the same time the Complaint was filed, the United States also 
filed a Hold Separate Stipulation and Order (``Hold Separate'') and 
proposed Final Judgment, which are designed to eliminate the 
anticompetitive effects of the acquisition. Under the proposed Final 
Judgment, which is explained more fully below, defendants are required 
to divest SGL Carbon's entire U.S. graphite electrodes business (the 
``Divestiture Assets'') to Tokai Carbon Co., Ltd. (``Tokai'') or to an 
alternate Acquirer approved by the United States. Under the terms of 
the Hold Separate, defendants will take certain steps to ensure that 
the Divestiture Assets are operated as a competitive, independent, 
economically viable, and ongoing business concern, that the Divestiture 
Assets will remain independent and uninfluenced by the consummation of 
the acquisition, and that competition is maintained during the pendency 
of the ordered divestiture.
    The United States and defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment would terminate this action, except that 
the Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED VIOLATION

A. The Defendants and the Transaction

    SDK, a Japanese corporation headquartered in Tokyo, Japan, is one 
of Japan's leading chemical companies, and had global sales of 
approximately $5.8 billion in 2016. SDK is one of the world's largest 
providers of graphite electrodes, with global sales of $248 million in 
2016, including approximately $85 million in U.S. revenues from 
graphite electrodes sales.
    SGL Carbon is a German-based corporation headquartered in 
Wiesbaden, Germany. SGL Carbon is a leading manufacturer of carbon-
based products, ranging from carbon and graphite products to carbon 
fibers and composites, with operations in 34 countries. SGL Carbon is a 
leading global producer of graphite electrodes, with worldwide graphite 
electrode revenues of approximately $326.6 million in 2016, including 
approximately $58.6 million from sales of graphite electrodes in the 
United States.
    SGL US, an indirect, wholly-owned subsidiary of SGL Carbon, is a 
Delaware limited liability company headquartered in Charlotte, North 
Carolina. SGL US is the sole shareholder of SGL GE Carbon LLC, which 
owns the assets of SGL US's operations in the United States, including 
SGL Carbon's Hickman and Ozark graphite electrode plants.
    Pursuant to an agreement dated October 20, 2016, SDK intends to 
acquire SGL Carbon's global graphite electrode operations, including 
SGL US, for approximately $264.5 million. The proposed acquisition, as 
initially agreed to by defendants, would lessen competition 
substantially in the manufacture and sale of large UHP graphite 
electrodes to U.S. EAF customers. This acquisition is the subject of 
the Complaint and proposed Final Judgment filed today by the United 
States.

B. Graphite Electrode Industry Overview

    Graphite electrodes are used to conduct electricity to generate 
sufficient heat to melt scrap metal in EAFs or to refine steel in ladle 
metallurgical furnaces. In a typical EAF operation, a series of 
electrodes are attached to a steel arm with connecting pins to form 
columns that are suspended over a large bucket of scrap steel. Large 
amounts of electricity are sent through the electrodes and the 
resulting heat melts the scrap into liquid. Graphite electrodes are 
consumed as they are used and continually need to be replaced with 
fresh electrodes. Electrodes are designed in a range of sizes to fit 
the characteristics of each furnace and are suited to the electrical 
properties of a specific EAF.
    Graphite electrodes are subdivided into three grades based on their 
level of current-carrying capacity: low power, high power, and UHP. 
EAFs typically utilize UHP graphite electrodes that are between 18 and 
32 inches in diameter and are characterized by an ability to withstand 
high currents. Large UHP graphite electrodes are the most sophisticated 
products used for the most demanding steelmaking applications and, as a 
result, are produced by a smaller number of manufacturers than

[[Page 48260]]

low power or high power graphite electrodes.
    EAF steel mills, which are a part of a vital U.S. industry involved 
in the manufacture and sale of steel and steel products used for many 
applications, represent an average of 45 percent of all domestic steel 
production. Over the past three years, U.S. EAF steel mills 
collectively averaged $262 million in large UHP graphite electrode 
purchases, and that number is expected to increase in the coming years 
due to a recent increase in steel demand and a decrease in the volume 
of steel imported into the United States.
    Large UHP graphite electrodes are purchased through an annual bid 
process where manufacturers are invited to bid for an entire year or 
partial year's supply. EAF customers evaluate electrode suppliers based 
on the reliability and efficiency of their electrodes, the timeliness 
of electrode delivery, the supplier's commercial business practices, 
and ongoing technical service capabilities. Many U.S. customers prefer 
suppliers that have a domestic manufacturing capability and a robust 
local service operation. Given the high costs of temporarily shutting 
down a furnace to remove broken electrode pieces, EAF customers 
typically avoid suppliers that develop a reputation for graphite 
electrode breakages even if the supplier offers electrodes at steep 
discounts. Electrodes usually are ordered in advance and are expected 
to be shipped in a timely manner by truck to each steel mill, where 
they are stored until used, although some customers have consignment 
arrangements with manufacturers that keep inventories of graphite 
electrodes in the manufacturers' own warehouses.

C. Relevant Markets Affected by the Proposed Acquisition

    As alleged in the Complaint, there are no functional substitutes 
for large UHP graphite electrodes for U.S. EAF steel mills. Without 
large UHP graphite electrodes, EAF steel mills cannot be operated and 
must be idled. Moreover, customers cannot substitute a different size 
graphite electrode for use in an EAF because the electrode size and 
current-carrying capacity is tailored to the specific facility. For 
these reasons, the Complaint alleges that it is likely that every 
individual size of large UHP graphite electrodes is a separate relevant 
product market. Because market participation by manufacturers is 
similar, and potential anticompetitive effects likely are similar 
across the entire range of sizes, all large UHP graphite electrodes can 
be grouped together in a single market for purposes of analysis. The 
Complaint alleges that a hypothetical profit-maximizing monopolist of 
large UHP graphite electrodes likely would impose a small but 
significant non-transitory increase in price (``SSNIP'') that would not 
be defeated by substitution to a different kind of electrode or any 
other product, or result in a reduction in purchases of such electrodes 
in volumes sufficient to make such a price increase unprofitable. 
Accordingly, the manufacture and sale of large UHP graphite electrodes 
sold to U.S. EAF steel mills is a line of commerce and relevant market 
within the meaning of Section 7 of the Clayton Act.
    As alleged in the Complaint, the United States is the relevant 
geographic market for the manufacture and sale of large UHP graphite 
electrodes sold to U.S. EAF steel mills. In the United States, 
individual EAF customers solicit bids from producers of large UHP 
graphite electrodes, and these producers develop individualized bids 
based on each customer's Request for Proposal. The bidding process 
enables large UHP graphite electrode producers to engage in ``price 
discrimination,'' i.e., to charge different prices to different EAF 
customers. A small but significant increase in the prices of large UHP 
graphite electrodes can therefore be targeted to customers in the 
United States without causing a sufficient number of these customers to 
use arbitrage to defeat the price increase, such as by buying 
electrodes from customers outside the country so as to make such a 
price increase unprofitable. Since the availability of domestic 
technical services is important to U.S. customers, these customers 
would not buy electrodes from customers outside the United States. 
Accordingly, the United States is a relevant geographic market within 
the meaning of Section 7 of the Clayton Act.

D. Anticompetitive Effects

    According to the Complaint, the proposed acquisition would 
substantially increase concentration in the relevant market. SDK and 
SGL Carbon have market shares of approximately 35 and 21 percent, 
respectively, in the relevant market; a third major seller of large UHP 
graphite electrodes to U.S. EAF customers has a market share of 22 
percent. The remaining competitors, which include firms from Japan, 
India, Russia, and China, have a combined 22 percent share. Under the 
Herfindahl-Hirschman Index (``HHI''), a widely-used measure of market 
concentration utilized in the Horizontal Merger Guidelines issued by 
the Department of Justice and the Federal Trade Commission (the 
``Horizontal Merger Guidelines''), the pre-merger HHI is 2230 and the 
post-merger HHI is 3693, representing an increase in the HHI of 1,463. 
As discussed in the Horizontal Merger Guidelines and alleged in the 
Complaint, these HHIs indicate that the proposed acquisition will 
result in a highly concentrated market and is presumed likely to 
enhance market power.
    In addition to increasing concentration, the Complaint alleges that 
SDK's acquisition of SGL Carbon's global graphite electrode business 
would eliminate head-to-head competition between SDK and SGL Carbon in 
the relevant market. Both SDK and SGL Carbon have a strong reputation 
for high-quality graphite electrodes, a robust local manufacturing 
presence, an established delivery infrastructure, and superior 
technical service capabilities and support, including proprietary 
software specifically designed to assist steel mills in the 
installation and efficient maintenance of electrodes within their EAFs. 
As alleged in the Complaint, SDK and SGL Carbon compete directly on 
price, quality, delivery, and technical service, and the competition 
between them has directly benefitted U.S. EAF customers.
    The Complaint further alleges that the acquisition is likely to 
lead to higher prices because there is only one other significant 
competitor with a comparable reputation for product quality, shipment 
and delivery logistics, and local technical service, and therefore, for 
most customers, the transaction will reduce the number of significant 
bidders from three to two. According to the Complaint, the remaining 
market participants, each of which has participated in the U.S. market 
with only limited sales, are not in a position to constrain a 
unilateral exercise of market power by SDK after the acquisition. The 
most significant of these firms, based in Japan, has a long history of 
sales of large UHP graphite electrodes in the United States, a good 
reputation for quality, and an enduring small presence in the market. 
However, this firm and the other remaining firms that have made limited 
sales to U.S. EAF steel mills are each disadvantaged by a lack of 
domestic manufacturing capability, limited delivery and technical 
service infrastructure, and high costs. As a result, none of these 
firms will be able to replace the competition lost as a result of SDK's 
acquisition of SGL Carbon's global graphite electrode business.

[[Page 48261]]

E. Barriers to Entry

    As alleged in the Complaint, entry of additional competitors into 
the manufacture and sale of large UHP graphite electrodes sold to U.S. 
EAF steel mills is unlikely to be timely, likely, or sufficient to 
prevent the harm to competition caused by the elimination of SGL Carbon 
as an independent supplier. New entrants face significant entry 
barriers in terms of cost and time, including the substantial time and 
expense required to construct a manufacturing facility, the need to 
build technical capabilities sufficient to meet customer expectations, 
the requirement that a new supplier demonstrate competence to U.S. 
customers through a lengthy qualification and trialing period, and the 
need to create a strong local infrastructure to ensure reliable and 
prompt delivery and technical service.

III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT

    The divestiture requirement of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition by 
establishing an independent and economically viable competitor in the 
manufacture and sale of large UHP graphite electrodes in the relevant 
market.
    Pursuant to the proposed Final Judgment, defendants must divest SGL 
Carbon's entire U.S. graphite electrodes business, which is defined in 
Paragraph II(F) to include SGL Carbon's manufacturing facilities 
located in Ozark, Arkansas and Hickman, Kentucky and all tangible and 
intangible assets used in connection with SGL Carbon's U.S. graphite 
electrodes business. Among the assets to be divested is SGL Carbon's 
CEDIS[supreg] EAF performance monitoring system, proprietary software 
specifically designed to assist steel mills in the installation and 
efficient maintenance of electrodes within their EAFs.
    Paragraph IV(A) of the proposed Final Judgment provides that 
defendants must divest the Divestiture Assets to Tokai Carbon Co., 
Ltd., or to an alternative acquirer acceptable to the United States 
within 45 days of the Court's signing of the Hold Separate. The 
Divestiture Assets must be divested in such a way as to satisfy the 
United States, in its sole discretion, that the operations can and will 
be operated by Tokai or an alternate purchaser as a viable, ongoing 
business that can compete effectively in the relevant market. 
Defendants must take all reasonable steps necessary to accomplish the 
divestiture quickly and shall cooperate with Tokai or any other 
prospective purchaser.
    The proposed Final Judgment contains several provisions designed to 
facilitate the Acquirer's immediate use of the Divestiture Assets. 
Paragraph IV(J) provides the Acquirer with the option to enter into a 
transition services agreement with SGL Carbon to obtain back office and 
information technology services and support for the Divestiture Assets 
for a period of up to one year. The United States, in its sole 
discretion, may approve one or more extensions of this agreement for a 
total of up to an additional 12 months. Paragraph IV(K) provides the 
Acquirer with the option to enter into a supply contract with SDK for 
connecting pins sufficient to meet all or part of the Acquirer's needs 
for a period of up to three years. Connecting pins are a component used 
to connect graphite electrodes in an EAF, and the inclusion of a supply 
option in the proposed Final Judgment will enable Tokai or an alternate 
acquirer to devote additional capacity to the manufacture of large UHP 
graphite electrodes if it so chooses. The proposed Final Judgment 
provides that the United States, in its sole discretion, may approve 
one or more extensions of this supply contract for a total of up to an 
additional 12 months.
    The proposed Final Judgment also contains provisions intended to 
facilitate the Acquirer's efforts to hire the employees involved in SGL 
Carbon's U.S. graphite electrode business. Paragraph IV(D) of the 
proposed Final Judgment requires defendants to provide the Acquirer 
with organization charts and information relating to these employees 
and make them available for interviews, and provides that defendants 
will not interfere with any negotiations by the Acquirer to hire them. 
In addition, Paragraph IV(E) provides that for employees who elect 
employment with the Acquirer, defendants, subject to exceptions, shall 
waive all noncompete and nondisclosure agreements, vest all unvested 
pension and other equity rights, and provide all benefits to which the 
employees would generally be provided if transferred to a buyer of an 
ongoing business. The paragraph further provides, that for a period of 
12 months from the filing of the Complaint, defendants may not solicit 
to hire, or hire any such person who was hired by the Acquirer, unless 
such individual is terminated or laid off by the Acquirer or the 
Acquirer agrees in writing that defendants may solicit or hire that 
individual.
    In the event that defendants do not accomplish the divestiture 
within the period provided in the proposed Final Judgment, Paragraph 
V(A) provides that the Court will appoint a trustee selected by the 
United States to effect the divestitures. If a trustee is appointed, 
the proposed Final Judgment provides that defendants will pay all costs 
and expenses of the trustee. The trustee's commission will be 
structured so as to provide an incentive for the trustee based on the 
price obtained and the speed with which the divestiture is 
accomplished. After its appointment becomes effective, the trustee will 
file monthly reports with the Court and the United States setting forth 
its efforts to accomplish the divestiture. At the end of six months, if 
the divestiture has not been accomplished, the trustee and the United 
States will make recommendations to the Court, which shall enter such 
orders as appropriate, in order to carry out the purpose of the trust, 
including extending the trust or the term of the trustee's appointment.

IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against defendants.

V. PROCEDURES AVAILABLE FOR MODIFICATION OF THE PROPOSED FINAL JUDGMENT

    The United States and defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the United States written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register, or the last date of 
publication in a newspaper of the

[[Page 48262]]

summary of this Competitive Impact Statement, whichever is later. All 
comments received during this period will be considered by the United 
States Department of Justice, which remains free to withdraw its 
consent to the proposed Final Judgment at any time prior to the Court's 
entry of judgment. The comments and the response of the United States 
will be filed with the Court. In addition, comments will be posted on 
the Antitrust Division's internet website and, under certain 
circumstances, published in the Federal Register.
    Written comments should be submitted to: Maribeth Petrizzi, Chief, 
Litigation II Section, Antitrust Division, United States Department of 
Justice, 450 Fifth Street NW., Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. ALTERNATIVES TO THE PROPOSED FINAL JUDGMENT

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against defendants. The 
United States could have continued the litigation and sought 
preliminary and permanent injunctions against SDK's acquisition of SGL 
Carbon's global graphite electrode business. The United States is 
satisfied, however, that the divestiture of assets described in the 
proposed Final Judgment will preserve competition for the manufacture 
and sale of large UHP graphite electrodes sold to U.S. EAF steel mills. 
Thus, the proposed Final Judgment would achieve all or substantially 
all of the relief the United States would have obtained through 
litigation, but avoids the time, expense, and uncertainty of a full 
trial on the merits of the Complaint.

VII. STANDARD OF REVIEW UNDER THE APPA FOR THE PROPOSED FINAL JUDGMENT

    The Clayton Act, as amended by the APPA, requires that proposed 
consent judgments in antitrust cases brought by the United States be 
subject to a sixty-day comment period, after which the Court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. 16(e)(1). In making that determination, 
the Court, in accordance with the statute as amended in 2004, is 
required to consider:

    (A) the competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

    15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory 
factors, the Court's inquiry is necessarily a limited one as the 
government is entitled to ``broad discretion to settle with the 
defendant within the reaches of the public interest.'' United States v. 
Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); see generally 
United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) 
(assessing public interest standard under the Tunney Act); United 
States v. US Airways Group, Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) 
(explaining that the ``court's inquiry is limited'' in Tunney Act 
settlements); United States v. InBev N.V./S.A., No. 08-1965 (JR), 2009-
2 Trade Cas. (CCH) ] 76,736, 2009 U.S. Dist. LEXIS 84787, at *3, 
(D.D.C. Aug. 11, 2009) (noting that the court's review of a consent 
judgment is limited and only inquires ``into whether the government's 
determination that the proposed remedies will cure the antitrust 
violations alleged in the complaint was reasonable, and whether the 
mechanism to enforce the final judgment are clear and 
manageable.'').\1\
---------------------------------------------------------------------------

    \1\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for court to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
16(e) (2004) with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns, 
489 F. Supp. 2d at 11 (concluding that the 2004 amendments 
``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------

    As the United States Court of Appeals for the District of Columbia 
Circuit has held, under the APPA a court considers, among other things, 
the relationship between the remedy secured and the specific 
allegations set forth in the government's complaint, whether the decree 
is sufficiently clear, whether enforcement mechanisms are sufficient, 
and whether the decree may positively harm third parties. See 
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the 
relief secured by the decree, a court may not ``engage in an 
unrestricted evaluation of what relief would best serve the public.'' 
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (quoting 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see 
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 
F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787, 
at *3. Courts have held that:

[t]he balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\2\ In 
determining whether a proposed settlement is in the public interest, a 
district court ``must accord deference to the government's predictions 
about the efficacy of its remedies, and may not require that the 
remedies perfectly match the alleged violations.'' SBC Commc'ns, 489 F. 
Supp. 2d at 17; see also US Airways, 38 F. Supp. 3d at 75 (noting that 
a court should not reject the proposed remedies because it believes 
others are preferable); Microsoft, 56 F.3d at 1461 (noting the need for 
courts to be ``deferential to the government's predictions as to the 
effect of the proposed remedies''); United States v. Archer-Daniels-
Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that the court 
should grant due respect to the United States' prediction as to the 
effect of proposed remedies, its perception of the market structure, 
and its views of the nature of the case).
---------------------------------------------------------------------------

    \2\ Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); United States v. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the 
court is constrained to ``look at the overall picture not 
hypercritically, nor with a microscope, but with an artist's 
reducing glass''). See generally Microsoft, 56 F.3d at 1461 
(discussing whether ``the remedies [obtained in the decree are] so 
inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest' '').
---------------------------------------------------------------------------

    Courts have greater flexibility in approving proposed consent 
decrees than in crafting their own decrees following a finding of 
liability in a litigated matter. ``[A] proposed decree must be approved 
even if it falls short of the remedy the court would impose on its own, 
as long as it falls within the range of acceptability or is `within the

[[Page 48263]]

reaches of public interest.' '' United States v. Am. Tel. & Tel. Co., 
552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United 
States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd 
sub nom. Maryland v. United States, 460 U.S. 1001 (1983); see also US 
Airways, 38 F. Supp. 3d at 76 (noting that room must be made for the 
government to grant concessions in the negotiation process for 
settlements) (citing Microsoft, 56 F.3d at 1461); United States v. 
Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) (approving 
the consent decree even though the court would have imposed a greater 
remedy). To meet this standard, the United States ``need only provide a 
factual basis for concluding that the settlements are reasonably 
adequate remedies for the alleged harms.'' SBC Commc'ns, 489 F. Supp. 
2d at 17.
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the Court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459; see also US Airways, 
38 F. Supp. 3d at 75 (noting that the court must simply determine 
whether there is a factual foundation for the government's decisions 
such that its conclusions regarding the proposed settlements are 
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``the `public 
interest' is not to be measured by comparing the violations alleged in 
the complaint against those the court believes could have, or even 
should have, been alleged''). Because the ``court's authority to review 
the decree depends entirely on the government's exercising its 
prosecutorial discretion by bringing a case in the first place,'' it 
follows that ``the court is only authorized to review the decree 
itself,'' and not to ``effectively redraft the complaint'' to inquire 
into other matters that the United States did not pursue. Microsoft, 56 
F.3d at 1459-60. As this Court confirmed in SBC Communications, courts 
``cannot look beyond the complaint in making the public interest 
determination unless the complaint is drafted so narrowly as to make a 
mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
    In its 2004 amendments, Congress made clear its intent to preserve 
the practical benefits of utilizing consent decrees in antitrust 
enforcement, adding the unambiguous instruction that ``[n]othing in 
this section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. 16(e)(2); see also US Airways, 38 F. Supp. 3d at 
76 (indicating that a court is not required to hold an evidentiary 
hearing or to permit intervenors as part of its review under the Tunney 
Act). The language wrote into the statute what Congress intended when 
it enacted the Tunney Act in 1974, as Senator Tunney explained: ``[t]he 
court is nowhere compelled to go to trial or to engage in extended 
proceedings which might have the effect of vitiating the benefits of 
prompt and less costly settlement through the consent decree process.'' 
119 Cong. Rec. 24,598 (1973) (statement of Sen. Tunney). Rather, the 
procedure for the public interest determination is left to the 
discretion of the Court, with the recognition that the Court's ``scope 
of review remains sharply proscribed by precedent and the nature of 
Tunney Act proceedings.'' SBC Commc'ns, 489 F. Supp. 2d at 11.\3\ A 
court can make its public interest determination based on the 
competitive impact statement and response to public comments alone. US 
Airways, 38 F. Supp. 3d at 76.
---------------------------------------------------------------------------

    \3\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the 
court to make its public interest determination on the basis of the 
competitive impact statement and response to comments alone''); 
United States v. Mid-Am. Dairymen, Inc., No. 73-CV-681-W-1, 1977-1 
Trade Cas. (CCH) ] 61,508, at 71,980, *22 (W.D.Mo. 1977) (``Absent a 
showing of corrupt failure of the government to discharge its duty, 
the Court, in making its public interest finding, should . . . 
carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
circumstances.''); S. Rep. No. 93-298, at 6 (1973) (``Where the 
public interest can be meaningfully evaluated simply on the basis of 
briefs and oral arguments, that is the approach that should be 
utilized.'').
---------------------------------------------------------------------------

VIII. DETERMINATIVE DOCUMENTS

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

Dated: September 27, 2017

Respectfully submitted,

-----------------------------------------------------------------------
Bashiri Wilson*

United States Department of Justice, Antitrust Division, Litigation 
II Section, 450 Fifth Street NW., Suite 8700, Washington, DC 20530, 
Tel.: (202) 598-8794, Fax: (202) 514-9033, Email: 
bashiri.wilson@usdoj.gov.

*Attorney of Record

United States District Court for the District of Columbia

    United States of America, Plaintiff, v. Showa Denko K.K., SGL 
Carbon SE, and SGL GE Carbon Holding LLC (USA),
Defendants,

Case No: 1:17-cv-01992
Judge: James E. Boasberg

PROPOSED FINAL JUDGMENT

    WHEREAS, Plaintiff, United States of America, filed its Complaint 
on September 27, 2017, the United States and defendants, Showa Denko 
K.K., SGL Carbon SE, and SGL GE Carbon Holding LLC (USA), by their 
respective attorneys, have consented to the entry of this Final 
Judgment without trial or adjudication of any issue of fact or law, and 
without this Final Judgment constituting any evidence against or 
admission by any party regarding any issue of fact or law;
    AND WHEREAS, defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    AND WHEREAS, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by the defendants to 
assure that competition is not substantially lessened;
    AND WHEREAS, the United States requires defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    AND WHEREAS, defendants have represented to the United States that 
the divestitures required below can and will be made and that 
defendants will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the divestiture 
provisions contained below;
    NOW THEREFORE, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ORDERED, ADJUDGED, AND DECREED:

I. JURISDICTION

    This Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against defendants under Section 7 of the Clayton 
Act, as amended (15 U.S.C. 18).

II. DEFINITIONS

    As used in this Final Judgment:
    A. ``Acquirer'' means Tokai or another entity to which defendants 
divest the Divestiture Assets.
    B. ``SDK'' means defendant Showa Denko K.K., a Japanese corporation 
headquartered in Tokyo, Japan, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships, and joint 
ventures, and their directors, officers, managers, agents, and 
employees.

[[Page 48264]]

    C. ``SGL'' means defendant SGL Carbon SE, a German corporation 
headquartered in Wiesbaden, Germany, its successors and assigns, and 
its subsidiaries, divisions, groups, affiliates, partnerships, and 
joint ventures, and their directors, officers, managers, agents, and 
employees, including defendant SGL GE Carbon Holding LLC (USA), a 
Delaware limited liability company that is an indirect, wholly-owned 
subsidiary of SGL Carbon SE, and is headquartered in Charlotte, North 
Carolina.
    D. ``Tokai'' means Tokai Carbon Co., Ltd., a Japanese corporation 
headquartered in Tokyo, Japan, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships, and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    E. ``Divestiture Assets'' means SGL's U.S. Graphite Electrodes 
Business.
    F. ``SGL's U.S. Graphite Electrodes Business'' means SGL GE Carbon 
Holding LLC (USA), all of its subsidiaries, and all additional 
operations of SGL related to the production, distribution, engineering, 
development, sale, and servicing of graphite electrodes manufactured in 
the United States, including, but not limited to:
    1. The manufacturing facility located at 3931 Carbon Plant Rd., 
Ozark, Arkansas 72949 (the ``Ozark Facility'');
    2. The manufacturing facility located at 2320 Myron Cory Dr., 
Hickman, Kentucky 42050 (the ``Hickman Facility'');
    3. All tangible assets used in connection with SGL's U.S. Graphite 
Electrodes Business, including research and development activities; all 
manufacturing equipment, tooling and fixed assets, personal property, 
inventory, office furniture, materials, supplies, and other tangible 
property and all assets used exclusively in connection with SGL's U.S. 
Graphite Electrodes Business; all licenses, permits, and authorizations 
issued by any governmental organization relating to SGL's U.S. Graphite 
Electrodes Business; all contracts, teaming arrangements, agreements, 
leases, commitments, certifications, and understandings, including 
supply agreements relating to SGL's U.S. Graphite Electrodes Business; 
all customer lists, contracts, accounts, and credit records relating to 
SGL's U.S. Graphite Electrodes Business; all repair and performance 
records and all other records relating to SGL's U.S. Graphite 
Electrodes Business; and
    4. All intangible assets used in connection with SGL's U.S. 
Graphite Electrodes Business, including, but not limited to, all 
patents, licenses and sublicenses, intellectual property, copyrights, 
trademarks, trade names, service marks, service names (excluding any 
trademark, trade name, service mark, or service name containing the 
name ``SGL''), technical information, computer software (including, but 
not limited to, SGL's CEDIS[supreg] EAF performance monitoring system) 
and related documentation, know-how, trade secrets, drawings, 
blueprints, designs, design protocols, specifications for materials, 
specifications for parts and devices, safety procedures for the 
handling of materials and substances, quality assurance and control 
procedures, design tools and simulation capability, all manuals and 
technical information SGL provides to its own employees, customers, 
suppliers, agents, or licensees, and all research data concerning 
historic and current research and development efforts relating to SGL's 
U.S. Graphite Electrodes Business, including, but not limited to, 
designs of experiments, and the results of successful and unsuccessful 
designs and experiments.
    G. ``Relevant Employees'' means all SGL personnel involved in the 
production, distribution, engineering, development, sale, or servicing 
of graphite electrodes for SGL's U.S. Graphite Electrodes Business.

III. APPLICABILITY

    A. This Final Judgment applies to SDK and SGL, as defined above, 
and all other persons in active concert or participation with any of 
them who receive actual notice of this Final Judgment by personal 
service or otherwise.
    B. If, prior to complying with Section IV and Section V of this 
Final Judgment, defendants sell or otherwise dispose of all or 
substantially all of their assets or of lesser business units that 
include the Divestiture Assets, they shall require the purchaser to be 
bound by the provisions of this Final Judgment. Defendants need not 
obtain such an agreement from the acquirers of the assets divested 
pursuant to this Final Judgment.

IV. DIVESTITURE

    A. Defendants are ordered and directed, within 45 calendar days 
after the Court's signing of the Hold Separate Stipulation and Order in 
this matter, to divest the Divestiture Assets in a manner consistent 
with this Final Judgment to Tokai or an alternative Acquirer acceptable 
to the United States, in its sole discretion. The United States, in its 
sole discretion, may agree to one or more extensions of this time 
period not to exceed sixty (60) calendar days in total, and shall 
notify the Court in such circumstances. Defendants agree to use their 
best efforts to divest the Divestiture Assets as expeditiously as 
possible.
    B. In the event defendants are attempting to divest the Divestiture 
Assets to an Acquirer other than Tokai, defendants promptly shall make 
known, by usual and customary means (to the extent defendants have not 
already done so), the availability of the Divestiture Assets. 
Defendants shall inform any person making an inquiry regarding a 
possible purchase of the Divestiture Assets that they are being 
divested pursuant to this Final Judgment and provide that person with a 
copy of this Final Judgment.
    C. In accomplishing the divestiture ordered by this Final Judgment, 
defendants shall offer to furnish to all prospective Acquirers, subject 
to customary confidentiality assurances, all information and documents 
relating to the Divestiture Assets customarily provided in a due 
diligence process except such information or documents subject to the 
attorney-client privileges or work-product doctrine. Defendants shall 
make available such information to the United States at the same time 
that such information is made available to any other person.
    D. Defendants shall provide the Acquirer and the United States with 
organization charts and information relating to Relevant Employees, 
including name, job title, past experience relating to SGL's U.S. 
Graphite Electrodes Business, responsibilities, training and 
educational history, relevant certifications, and to the extent 
permissible by law, job performance evaluations, and current salary and 
benefits information, to enable the Acquirer to make offers of 
employment. Upon request, defendants shall make Relevant Employees 
available for interviews with the Acquirer during normal business hours 
at a mutually agreeable location and will not interfere with any 
negotiations by the Acquirer to employ any Relevant Employees. 
Interference with respect to this paragraph includes, but is not 
limited to, offering to increase the salary or benefits of Relevant 
Employees other than as part of a company-wide increase in salary or 
benefits granted in the ordinary course of business.
    E. For any Relevant Employees who elect employment with the 
Acquirer, defendants shall waive all noncompete and nondisclosure 
agreements, vest all unvested pension and other equity rights, and 
provide all benefits to which

[[Page 48265]]

the Relevant Employees would generally be provided if transferred to a 
buyer of an ongoing business. For a period of twelve (12) months from 
the filing of the Complaint in this matter, defendants may not solicit 
to hire, or hire, any such person who was hired by the Acquirer, unless 
(1) such individual is terminated or laid off by the Acquirer or (2) 
the Acquirer agrees in writing that defendants may solicit or hire that 
individual. Nothing in Paragraphs IV(D) and (E) shall prohibit 
defendants from maintaining any reasonable restrictions on the 
disclosure by any employee who accepts an offer of employment with the 
Acquirer of the defendant's proprietary non-public information that is 
(1) not otherwise required to be disclosed by this Final Judgment, (2) 
related solely to defendants' businesses and clients, and (3) unrelated 
to the Divestiture Assets.
    F. Defendants shall permit prospective Acquirers of the Divestiture 
Assets to have reasonable access to personnel and to make inspections 
of the physical facilities of SGL's U.S. Graphite Electrodes Business; 
access to any and all environmental, zoning, and other permit documents 
and information; and access to any and all financial, operational, or 
other documents and information customarily provided as part of a due 
diligence process.
    G. Defendants shall warrant to the Acquirer that each asset will be 
operational on the date of sale.
    H. Defendants shall not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Assets.
    I. Defendants shall warrant to the Acquirer that there are no 
material defects in the environmental, zoning, or other permits 
pertaining to the operation of each asset, and that following the sale 
of the Divestiture Assets, defendants will not undertake, directly or 
indirectly, any challenges to the environmental, zoning, or other 
permits relating to the operation of the Divestiture Assets.
    J. At the option of the Acquirer, SGL shall enter a transition 
services agreement to provide back office and information technology 
services and support for SGL's U.S. Graphite Electrodes Business for a 
period of up to one (1) year. The United States, in its sole 
discretion, may approve one or more extensions of this agreement for a 
total of up to an additional twelve (12) months. If the Acquirer seeks 
an extension of the term of this transition services agreement, it 
shall so notify the United States in writing at least three (3) months 
prior to the date the transition services contract expires. If the 
United States approves such an extension, it shall so notify the 
Acquirer in writing at least two (2) months prior to the date the 
transition services contract expires. The terms and conditions of any 
contractual arrangement intended to satisfy this provision must be 
reasonably related to the market value of the expertise of the 
personnel providing any needed assistance. The SGL employee(s) tasked 
with providing these transition services may not share any 
competitively sensitive information of the Acquirer with any other SGL 
or SDK employee.
    K. At the option of the Acquirer, SDK shall enter into a supply 
contract for connecting pins sufficient to meet all or part of the 
Acquirer's needs for a period of up to three (3) years. The terms and 
conditions of any contractual arrangement meant to satisfy this 
provision must be reasonably related to market conditions for 
connecting pins. The United States, in its sole discretion, may approve 
one or more extensions of this supply contract for a total of up to an 
additional twelve (12) months. If the Acquirer seeks an extension of 
the term of this supply contract, it shall so notify the United States 
in writing at least three (3) months prior to the date the supply 
contract expires. If the United States approves such an extension, it 
shall so notify the Acquirer in writing at least two (2) months prior 
to the date the supply contract expires.
    L. Unless the United States otherwise consents in writing, the 
divestiture pursuant to Section IV, or by Divestiture Trustee appointed 
pursuant to Section V, of this Final Judgment, shall include the entire 
Divestiture Assets, and shall be accomplished in such a way as to 
satisfy the United States, in its sole discretion, that the Divestiture 
Assets can and will be used by the Acquirer as part of a viable, 
ongoing business of the production, distribution, engineering, 
development, sale, or servicing of large diameter ultra-high power 
graphite electrodes in the United States. The divestitures, whether 
pursuant to Section IV or Section V of this Final Judgment,

    1) shall be made to an Acquirer that, in the United States' sole 
judgment, has the intent and capability (including the necessary 
managerial, operational, technical, and financial capability) of 
competing effectively in the production, distribution, engineering, 
development, sale, or servicing of large diameter ultra-high power 
graphite electrodes in the United States; and
    2) shall be accomplished so as to satisfy the United States, in 
its sole discretion, that none of the terms of any agreement between 
an Acquirer and defendants give defendants the ability unreasonably 
to raise the Acquirer's costs, to lower the Acquirer's efficiency, 
or otherwise to interfere in the ability of the Acquirer to compete 
effectively.

V. APPOINTMENT OF DIVESTITURE TRUSTEE

    A. If defendants have not divested the Divestiture Assets within 
the time period specified in Paragraph IV(A), defendants shall notify 
the United States of that fact in writing. Upon application of the 
United States, the Court shall appoint a Divestiture Trustee selected 
by the United States and approved by the Court to effect the 
divestiture of the Divestiture Assets.
    B. After the appointment of a Divestiture Trustee becomes 
effective, only the Divestiture Trustee shall have the right to sell 
the Divestiture Assets. The Divestiture Trustee shall have the power 
and authority to accomplish the divestiture to an Acquirer acceptable 
to the United States at such price and on such terms as are then 
obtainable upon reasonable effort by the Divestiture Trustee, subject 
to the provisions of Sections IV, V, and VI of this Final Judgment, and 
shall have such other powers as this Court deems appropriate. Subject 
to Paragraph V(D) of this Final Judgment, the Divestiture Trustee may 
hire at the cost and expense of defendants any investment bankers, 
attorneys, or other agents, who shall be solely accountable to the 
Divestiture Trustee, reasonably necessary in the Divestiture Trustee's 
judgment to assist in the divestiture. Any such investment bankers, 
attorneys, or other agents shall serve on such terms and conditions as 
the United States approves, including confidentiality requirements and 
conflict of interest certifications.
    C. Defendants shall not object to a sale by the Divestiture Trustee 
on any ground other than the Divestiture Trustee's malfeasance. Any 
such objections by defendants must be conveyed in writing to the United 
States and the Divestiture Trustee within ten (10) calendar days after 
the Divestiture Trustee has provided the notice required under Section 
VI.
    D. The Divestiture Trustee shall serve at the cost and expense of 
defendants pursuant to a written agreement, on such terms and 
conditions as the United States approves, including confidentiality 
requirements and conflict of interest certifications. The Divestiture 
Trustee shall account for all monies derived from the sale of the 
assets sold by the Divestiture Trustee and all costs and expenses so 
incurred. After approval by the Court of the Divestiture Trustee's 
accounting, including fees for its services yet unpaid and those of any 
professionals and agents retained by the Divestiture

[[Page 48266]]

Trustee, all remaining money shall be paid to defendants and the trust 
shall then be terminated. The compensation of the Divestiture Trustee 
and any professionals and agents retained by the Divestiture Trustee 
shall be reasonable in light of the value of the Divestiture Assets and 
based on a fee arrangement providing the Divestiture Trustee with an 
incentive based on the price and terms of the divestiture and the speed 
with which it is accomplished, but timeliness is paramount. If the 
Divestiture Trustee and defendants are unable to reach agreement on the 
Divestiture Trustee's or any agents' or consultants' compensation or 
other terms and conditions of engagement within 14 calendar days of 
appointment of the Divestiture Trustee, the United States may, in its 
sole discretion, take appropriate action, including making a 
recommendation to the Court. The Divestiture Trustee shall, within 
three (3) business days of hiring any other professionals or agents, 
provide written notice of such hiring and the rate of compensation to 
defendants and the United States.
    E. Defendants shall use their best efforts to assist the 
Divestiture Trustee in accomplishing the required divestiture. The 
Divestiture Trustee and any consultants, accountants, attorneys, and 
other agents retained by the Divestiture Trustee shall have full and 
complete access to the personnel, books, records, and facilities of the 
business to be divested, and defendants shall develop financial and 
other information relevant to such business as the Divestiture Trustee 
may reasonably request, subject to reasonable protection for trade 
secret or other confidential research, development, or commercial 
information or any applicable privileges. Defendants shall take no 
action to interfere with or to impede the Divestiture Trustee's 
accomplishment of the divestiture.
    F. After its appointment, the Divestiture Trustee shall file 
monthly reports with the United States and, as appropriate, the Court 
setting forth the Divestiture Trustee's efforts to accomplish the 
divestiture ordered under this Final Judgment. To the extent such 
reports contain information that the Divestiture Trustee deems 
confidential, such reports shall not be filed in the public docket of 
the Court. Such reports shall include the name, address, and telephone 
number of each person who, during the preceding month, made an offer to 
acquire, expressed an interest in acquiring, entered into negotiations 
to acquire, or was contacted or made an inquiry about acquiring, any 
interest in the Divestiture Assets, and shall describe in detail each 
contact with any such person. The Divestiture Trustee shall maintain 
full records of all efforts made to divest the Divestiture Assets.
    G. If the Divestiture Trustee has not accomplished the divestiture 
ordered under this Final Judgment within six months after its 
appointment, the Divestiture Trustee shall promptly file with the Court 
a report setting forth (1) the Divestiture Trustee's efforts to 
accomplish the required divestiture, (2) the reasons, in the 
Divestiture Trustee's judgment, why the required divestiture has not 
been accomplished, and (3) the Divestiture Trustee's recommendations. 
To the extent such reports contain information that the Divestiture 
Trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. The Divestiture Trustee shall at the same 
time furnish such report to the United States which shall have the 
right to make additional recommendations consistent with the purpose of 
the trust. The Court thereafter shall enter such orders as it shall 
deem appropriate to carry out the purpose of the Final Judgment, which 
may, if necessary, include extending the trust and the term of the 
Divestiture Trustee's appointment by a period requested by the United 
States.
    H. If the United States determines that the Divestiture Trustee has 
ceased to act or failed to act diligently or in a reasonably cost-
effective manner, it may recommend the Court appoint a substitute 
Divestiture Trustee.

VI. NOTICE OF PROPOSED DIVESTITURE

    A. In the event defendants are divesting the Divestiture Assets to 
an Acquirer other than Tokai, within two (2) business days following 
execution of a definitive divestiture agreement, defendants or the 
Divestiture Trustee, whichever is then responsible for effecting the 
divestiture required herein, shall notify the United States of any 
proposed divestiture required by Section IV or Section V of this Final 
Judgment. If the Divestiture Trustee is responsible, it shall similarly 
notify defendants. The notice shall set forth the details of the 
proposed divestiture and list the name, address, and telephone number 
of each person not previously identified who offered or expressed an 
interest in or desire to acquire any ownership interest in the 
Divestiture Assets, together with full details of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such notice, the United States may request from defendants, 
the proposed Acquirer, any other third party, or the Divestiture 
Trustee, if applicable, additional information concerning the proposed 
divestiture, the proposed Acquirer, and any other potential Acquirer. 
Defendants and the Divestiture Trustee shall furnish any additional 
information requested within fifteen (15) calendar days of the receipt 
of the request, unless the parties shall otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after the United States has been 
provided the additional information requested from defendants, the 
proposed Acquirer, any third party, and the Divestiture Trustee, 
whichever is later, the United States shall provide written notice to 
defendants and the Divestiture Trustee, if there is one, stating 
whether or not it objects to the proposed divestiture. If the United 
States provides written notice that it does not object, the divestiture 
may be consummated, subject only to defendants' limited right to object 
to the sale under Paragraph V(C) of this Final Judgment. Absent written 
notice that the United States does not object to the proposed Acquirer 
or upon objection by the United States, a divestiture proposed under 
Section IV or Section V shall not be consummated. Upon objection by 
defendants under Paragraph V(C), a divestiture proposed under Section V 
shall not be consummated unless approved by the Court.

VII. FINANCING

    Defendants shall not finance all or any part of any purchase made 
pursuant to Section IV or Section V of this Final Judgment.

VIII. HOLD SEPARATE

    Until the divestiture required by this Final Judgment has been 
accomplished, defendants shall take all steps necessary to comply with 
the Hold Separate Stipulation and Order entered by this Court. 
Defendants shall take no action that would jeopardize the divestiture 
ordered by this Court.

IX. AFFIDAVITS

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, and every thirty (30) calendar days thereafter until 
the divestiture has been completed under Section IV or Section V, 
defendants shall deliver to the United States an affidavit as to the 
fact and manner of its compliance with Section IV or Section V of this 
Final Judgment. Each such affidavit shall include the name, address, 
and telephone number of each person who, during the preceding thirty 
(30)

[[Page 48267]]

calendar days, made an offer to acquire, expressed an interest in 
acquiring, entered into negotiations to acquire, or was contacted or 
made an inquiry about acquiring, any interest in the Divestiture 
Assets, and shall describe in detail each contact with any such person 
during that period. Each such affidavit shall also include a 
description of the efforts defendants have taken to solicit buyers for 
the Divestiture Assets, and to provide required information to 
prospective Acquirers, including the limitations, if any, on such 
information. Assuming the information set forth in the affidavit is 
true and complete, any objection by the United States to information 
provided by defendants, including limitation on information, shall be 
made within fourteen (14) calendar days of receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, defendants shall deliver to the United States an 
affidavit that describes in reasonable detail all actions defendants 
have taken and all steps defendants have implemented on an ongoing 
basis to comply with Section VIII of this Final Judgment. Defendants 
shall deliver to the United States an affidavit describing any changes 
to the efforts and actions outlined in defendants' earlier affidavits 
filed pursuant to this section within fifteen (15) calendar days after 
the change is implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after such 
divestiture has been completed.

X. COMPLIANCE INSPECTION

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of any related orders such as any Hold Separate 
Stipulation and Order, or of determining whether the Final Judgment 
should be modified or vacated, and subject to any legally-recognized 
privilege, from time to time authorized representatives of the United 
States Department of Justice, including consultants and other persons 
retained by the United States, shall, upon written request of an 
authorized representative of the Assistant Attorney General in charge 
of the Antitrust Division, and on reasonable notice to defendants, be 
permitted:

    1) access during defendants' office hours to inspect and copy, 
or at the option of the United States, to require defendants to 
provide hard copy or electronic copies of, all books, ledgers, 
accounts, records, data, and documents in the possession, custody, 
or control of defendants, relating to any matters contained in this 
Final Judgment; and
    2) to interview, either informally or on the record, defendants' 
officers, employees, or agents, who may have their individual 
counsel present, regarding such matters. The interviews shall be 
subject to the reasonable convenience of the interviewee and without 
restraint or interference by defendants.

    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit written reports or response to written 
interrogatories, under oath if requested, relating to any of the 
matters contained in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this section shall be divulged by the United States to any person other 
than an authorized representative of the executive branch of the United 
States, except in the course of legal proceedings to which the United 
States is a party (including grand jury proceedings), or for the 
purpose of securing compliance with this Final Judgment, or as 
otherwise required by law.
    D. If at the time information or documents are furnished by 
defendants to the United States, defendants represent and identify in 
writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(1)(G) of the 
Federal Rules of Civil Procedure, and defendants mark each pertinent 
page of such material, ``Subject to claim of protection under Rule 
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United 
States shall give defendants ten (10) calendar days notice prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding).

XI. NO REACQUISITION

    Defendants may not reacquire any part of the Divestiture Assets 
during the term of this Final Judgment.

XII. RETENTION OF JURISDICTION

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XIII. EXPIRATION OF FINAL JUDGMENT

    Unless this Court grants an extension, this Final Judgment shall 
expire ten (10) years from the date of its entry.

XIV. PUBLIC INTEREST DETERMINATION

    Entry of this Final Judgment is in the public interest. The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16, including making copies available to the 
public of this Final Judgment, the Competitive Impact Statement, and 
any comments thereon and the United States' responses to comments. 
Based upon the record before the Court, which includes the Competitive 
Impact Statement and any comments and response to comments filed with 
the Court, entry of this Final Judgment is in the public interest.

Date:

Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16.

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United States District Judge

[FR Doc. 2017-22443 Filed 10-16-17; 8:45 am]
 BILLING CODE P