United States v. Amcor Limited and Bemis Company, Inc.; Proposed Final Judgment and Competitive Impact Statement, 30223-30234 [2019-13531]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 84, Number 123 (Wednesday, June 26, 2019)]
[Notices]
[Pages 30223-30234]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13531]



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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Amcor Limited and Bemis Company, Inc.; Proposed 
Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec.  16(b)-(h), that a proposed Final 
Judgment, Stipulation, and Competitive Impact Statement have been filed 
with the United States District Court for the District of Columbia in 
United States v. Amcor Limited and Bemis Company, Inc., Civil Action 
No. 1:19-cv-01592-TNM. On May 30, 2019, the United States filed a 
Complaint alleging that Amcor Limited's proposed acquisition of Bemis 
Company, Inc. 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 Amcor to divest medical flexible packaging assets, including 
facilities in Ashland, Massachusetts; Milwaukee, Wisconsin; and 
Madison, Wisconsin, along with certain tangible and intangible assets.
    Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement are available for inspection on the Antitrust 
Division's website 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, Defense, Industrials, and Aerospace 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, Department of Justice, Antitrust 
Division, 450 5th Street, N.W., Suite 8700, Washington, D.C. 20530, 
Plaintiff, v. AMCOR LIMITED, Thurgauerstrasse 34, CH-8050, Zurich, 
Switzerland, and BEMIS COMPANY, INC., One Neenah Center, Neenah, WI 
54957, Defendants.

Civil Action No.: 1:19-cv-01592-TNM

Judge: Hon. Trevor N. McFadden

COMPLAINT

    The United States of America (``United States''), acting under the 
direction of the Attorney General of the United States, brings this 
civil antitrust action against Defendants Amcor Limited (``Amcor'') and 
Bemis Company, Inc. (``Bemis'') to enjoin Amcor's proposed acquisition 
of Bemis. The United States complains and alleges as follows:

I. NATURE OF THE ACTION

    1. Pursuant to a Transaction Agreement dated August 6, 2018, Amcor 
proposes to acquire all of the shares of Bemis for $6.8 billion, making 
the combined company the largest flexible packaging manufacturer in the 
world. Hospitals rely on flexible medical packaging to preserve the 
sterility of surgical tools, implants such as artificial hips, and a 
host of other medical devices. Improper packaging threatens the health 
of patients by allowing contamination from hazardous microbes and 
raises the cost of healthcare by exposing medical facilities to 
unnecessary risk.
    2. In the United States, Amcor and Bemis are two of only three 
significant suppliers of three medical packaging products critical to 
the safe transportation and use of medical devices: heat-seal coated 
medical-grade Tyvek rollstock (``coated Tyvek''), heat-seal coated 
medical-grade paper rollstock (``coated paper''), and heat-seal coated 
medical-grade Tyvek die-cut lidding (``die-cut lids''). Tyvek is a 
spinbonded material made from high-density polyethylene fibers, while 
paper is made from cellulose fibers. Both coated Tyvek and coated paper 
are wound onto a roll (``rollstock'') for easy transport and later 
conversion into finished medical packaging. Pouches and bags made from 
coated Tyvek, for example, are used to package surgical kits and 
cardiac catheters, while coated paper pouches and bags are used to 
package gauze and other wound care products. Coated Tyvek also is a 
necessary input to die-cut lids when the lids are used by medical 
device manufacturers to package and transport heavy, expensive, sharp, 
or bulky devices such as implants or pacemakers.
    3. The proposed acquisition will eliminate competition between 
Amcor and Bemis to supply these products to customers and likely lead 
to increased prices. As a result, the proposed acquisition likely would 
substantially lessen competition in the development, production, and 
sale of coated Tyvek, coated paper, and die-cut lids for medical use in 
the United States in violation of Section 7 of the Clayton Act, 15 
U.S.C. Sec.  18, and should be enjoined.

II. THE PARTIES

    4. Amcor, a global packaging manufacturer, is organized under 
Australian law and is headquartered in Zurich, Switzerland. In 2018, 
Amcor had total sales of over $9 billion, including approximately $288 
million in sales of flexible packaging for medical use in the United 
States.
    5. Bemis, a global packaging manufacturer, is a Missouri 
corporation headquartered in Neenah, Wisconsin. In 2018, Bemis had 
total sales of over $4 billion, including approximately $260.9 million 
in sales of flexible packaging for medical use in the United States.

III. JURISDICTION AND VENUE

    6. The United States brings this action under Section 15 of the 
Clayton Act, 15 U.S.C. Sec.  25, to prevent and restrain Defendants 
from violating Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.
    7. Defendants themselves, or through wholly-owned subsidiaries, 
produce and sell coated Tyvek, coated paper, and die-cut lids in the 
flow of interstate commerce. Defendants' activities in the development, 
production, and sale of these products substantially affect interstate 
commerce. This Court has subject-matter jurisdiction over this action 
pursuant to Section 15 of the Clayton Act, 15 U.S.C. Sec.  25, and 28 
U.S.C. Sec. Sec.  1331, 1337(a), and 1345.
    8. Defendants have consented to venue and personal jurisdiction in 
this District. Venue is proper in this District under Section 12 of the 
Clayton Act, 15 U.S.C. Sec.  22, and 28 U.S.C. Sec.  1391(c).

IV. INDUSTRY BACKGROUND

    9. Medical flexible packaging protects medical devices from 
dangerous microbes and particulates that can cause medical 
complications and risk patient safety. Medical devices used every day 
in hospitals, medical offices, and labs--ranging from a patient's gown 
to a syringe or an orthopedic implant--are sterilized after they have 
been packaged and must remain that way until use. With lives 
potentially at stake if a sterile barrier fails, flexible packaging 
manufacturers use complex chemical engineering and substantial 
manufacturing know-how and expertise to make their packaging products.
    10. Of the many materials available to make medical flexible 
packaging, two--

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medical grade paper and Tyvek--are each necessary for packaging certain 
medical devices. Both products can be sold in rollstock form, or as a 
``converted,'' or finished, packaging product, such as a die-cut lid, a 
bag, or a pouch.
    11. Unlike any other medical flexible packaging materials, Tyvek 
and medical grade paper are compatible with all methods of medical 
device sterilization, including sterilization by ethylene-oxide gas 
(``EtO''), which requires a ``breathable,'' or porous, package. To 
limit the risk of contamination, medical devices are sterilized after 
they are packaged, and the most common way to sterilize a medical 
device is with EtO. Tyvek and paper allow EtO gas to enter and exit 
while maintaining a sterile barrier. Other breathable materials have 
been developed, but no other breathable material is currently used to 
package medical devices.
    12. Tyvek often is preferred by medical device manufacturers over 
any other flexible packaging material because it is extremely durable. 
Once packaged and sterilized, medical devices are transported to 
hospitals, labs, or doctors' offices and stored until use. During 
transport and storage, medical device manufacturers rely on a device's 
packaging to withstand rough handling and preserve a sterile barrier. 
Because Tyvek is the most tear and puncture resistant medical flexible 
packaging material on the market, it is frequently used to protect 
bulky, heavy, or expensive devices such as hip implants and other 
orthopedics.
    13. Medical device manufacturers require a heat-seal coating to be 
applied to Tyvek and paper when those materials are used to package 
certain medical devices or in conjunction with certain medical 
packaging conversion equipment. Developing a coating formula and 
perfecting the application of coating to Tyvek or paper is complicated 
and requires substantial know-how and expertise. Coatings are trade 
secrets and difficult to engineer and replicate. If a coating is not 
applied properly, a package's seal can fail, rendering the medical 
device inside hazardous to use.
    14. When a medical device is used in a medical procedure, a number 
of risks arise that can compromise a device's function or sterility. 
Heat-seal coatings reduce the risk of contamination because they ensure 
that Tyvek and paper peel cleanly from the remainder of the package and 
do not generate particulates when opened. If the package is not easy to 
open, a medical professional could drop the device, touch it 
inadvertently, or cause it to touch the outside of the package or 
something else that is not sterile. Alternatively, if, at the time of 
opening, the packaging material releases particulates, those 
particulates can contaminate the device.
    15. Coatings also may make certain seals between different 
materials possible. For example, hip implants are normally packaged in 
rigid trays with die-cut lids made of Tyvek that are cut to match the 
shape of the tray. Because of the combined durability of a rigid tray 
and coated Tyvek, the pairing often is preferred for packaging 
expensive, heavy, or unusually-shaped medical devices. Sealing Tyvek to 
a rigid tray, however, is not possible unless the Tyvek is coated. A 
coating may also make it possible for sealing to occur at a broader 
range of temperatures, which makes coatings particularly important for 
medical device manufacturers or converters with older equipment.
    16. The Food and Drug Administration has established strict 
regulatory standards for evaluating, selecting, and using medical 
packaging materials. Medical device manufacturers have an obligation to 
ensure that their medical flexible packaging meets these standards, 
which requires qualification of the conditions in which a product will 
be manufactured and validation of the packaging's forming, sealing, and 
assembly processes.
    17. Before a packaged medical device goes to market, the medical 
device manufacturer must qualify the packaging supplier's facilities, 
raw materials, and manufacturing line. Additionally, the combination of 
device and packaging must be validated by the medical device 
manufacturer. The validation process requires numerous tests, including 
quality testing, sterilization testing, seal-strength testing, real-
time aging simulations, and shipping and handling simulations. These 
safeguards protect patients from hazardous microbes, bacteria, or 
particulates that can breach the package's sterile barrier during 
transport, storage, or opening.
    18. Qualification and validation of new packaging for a medical 
device can take years to complete and cost thousands of dollars. Even 
small changes to an existing package can necessitate requalification or 
revalidation.

V. RELEVANT MARKETS

A. Product Markets

a. Heat-Seal Coated Medical-Grade Tyvek Rollstock

    19. Heat-seal coated medical-grade Tyvek rollstock (``coated 
Tyvek'') is a properly defined relevant product market within the 
meaning of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.
    20. There are no substitutes for coated Tyvek for certain packaging 
applications. Uncoated Tyvek lacks the peelability, sealability, and 
particulate control of coated Tyvek and does not adhere to a rigid 
tray. Medical-grade paper in coated or uncoated form also generally is 
not a substitute for coated Tyvek because medical-grade paper lacks the 
same degree of durability that Tyvek delivers.
    21. In the event of a small but significant non-transitory price 
increase for coated Tyvek, customers would not substitute away from 
coated Tyvek in sufficient volume so as to render the price increase 
unprofitable.

b. Heat-Seal Coated Medical Grade Paper Rollstock

    22. Heat-seal coated medical-grade paper rollstock (``coated 
paper'') is a properly defined relevant product market within the 
meaning of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.
    23. There are no substitutes for coated paper for certain packaging 
applications. Uncoated paper lacks the peelability and particulate 
control of coated paper. Tyvek rollstock in coated or uncoated form 
also generally is not a substitute for applications that rely upon 
coated paper, because the price of Tyvek is so much higher than the 
price of coated paper that a customer would not switch to Tyvek even 
considering Tyvek's superior durability.
    24. In the event of a small but significant non-transitory price 
increase for coated paper, customers would not substitute away from 
coated paper in sufficient volume so as to render the price increase 
unprofitable.

c. Heat-Seal Coated Tyvek Die-Cut Lids

    25. Heat-seal coated Tyvek die-cut lids (``die-cut lids'') are a 
properly defined relevant product market within the meaning of Section 
7 of the Clayton Act, 15 U.S.C. Sec.  18.
    26. There are no substitutes for die-cut lids when used for certain 
applications. Uncoated materials are not substitutes for die-cut lids 
because coating is necessary for a lid to adhere to a rigid tray. 
Similarly, lids made of paper are not a substitute for die-cut lids 
because paper lids lack the same degree of durability as Tyvek.
    27. In the event of a small but significant non-transitory price 
increase for die-cut lids, customers would not substitute away from 
die-cut lids in sufficient volume so as to render the price increase 
unprofitable.

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B. Geographic Market

    28. The relevant geographic market for each of the relevant product 
markets is the United States. Producers of the relevant products can 
target customers based on their locations. Due to shipping costs and 
unique specifications there is no ability to arbitrage. Therefore, the 
relevant geographic market for each relevant product market is defined 
as sales made to customers in the United States.

VI. ANTICOMPETITIVE EFFECTS

    29. The proposed acquisition of Bemis by Amcor likely would 
substantially lessen competition for U.S. customers the three relevant 
product markets. Amcor, Bemis, and one other company are the three 
primary competitors in each of these markets. The Defendants' combined 
share is over 70% in coated Tyvek and coated paper, and over 50% in 
die-cut lids.
    30. Market concentration is a useful indication of how rigorous 
competition is in a market and whether a transaction is likely to cause 
competitive effects. Concentration in relevant markets is typically 
measured by the Herfindahl-Hirschman Index (or ``HHI''). Markets in 
which the HHI is in excess of 2,500 points are considered highly 
concentrated. See U.S. Dep't of Justice & Fed. Trade Comm'n, Horizontal 
Merger Guidelines ] 5.3 (revised August 19, 2010) (``Merger 
Guidelines''), https://www.justice.gov/atr/horizontal-merger-guidelines-08192010.
    31. As demonstrated in the table below, which is based on 
Defendants' 2017 revenues, each of these markets is highly concentrated 
and would become significantly more concentrated as a result of the 
proposed acquisition.

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                                           Pre-acquisition
                 Market                          HHI               Post-acquisition HHI            HHI delta
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Coated Tyvek............................               3300  More than 5800..................               2500
Coated Paper............................               3900  8000............................               4200
Die-Cut Lids............................               3600  4900............................               1300
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    32. The proposed acquisition leads to an increase in the HHI of 
more than 200 points in each of these product markets, making the 
acquisition presumptively harmful under the Horizontal Merger 
Guidelines.
    33. The transaction also eliminates head-to-head competition 
between Amcor and Bemis and threatens the benefits that customers have 
realized from that competition in the form of lower prices and better 
service. Due to Amcor and Bemis's collective overall expertise in 
meeting the needs of customers and other technical and commercial 
factors, including among other things, price, quality, and the ability 
to pass each customer's rigorous qualification and validation 
procedures, Amcor and Bemis are frequently viewed by each other and by 
customers as two of the three most significant competitors in the 
market.
    34. Amcor and Bemis competed against each other to win business, 
and they proposed pricing and products to customers that reflected an 
awareness of that competition. As a result, the ability of each company 
to raise prices, reduce quality, or limit technical support services to 
Medical Device Manufacturers has been constrained by the possibility of 
losing business to the other. For many customers, Amcor and Bemis are 
their two best substitutes. By eliminating Bemis as a competitor, Amcor 
likely would gain the incentive and ability to increase its bid prices, 
reduce quality, and reduce technical support below what it would have 
been absent the acquisition.
    35. Customers have benefitted from competition between Amcor and 
Bemis through lower prices and higher quality. The combination of Amcor 
and Bemis would eliminate this competition and future benefits to 
customers and likely would result in harmful unilateral price effects.

VII. ENTRY

    36. Entry is unlikely to prevent or remedy the acquisition's likely 
anticompetitive effects. Entry into the development, production, and 
sale of the foregoing relevant products is costly and unlikely to be 
timely or sufficient to prevent the harm to competition caused by the 
elimination of Bemis as an independent supplier.
    37. Barriers to entry include the significant technical expertise 
required to design a coating and production process that satisfies 
customer requirements. A new supplier would first need to develop and 
produce a heat-seal coating sufficient to meet the rigorous standards 
set by potential customers. The supplier would then need to develop a 
system to apply the coating to meet customers' rigorous standards. In 
addition, the technical know-how necessary to pass customers' 
qualification tests is difficult to obtain and is learned through a 
time-consuming trial-and-error process.
    38. Even after a new entrant has developed the necessary 
capabilities, the entrant's product must be qualified and validated by 
potential customers, demonstrating that its products can meet rigorous 
quality and performance standards. These qualification and validation 
requirements discourage entry by imposing substantial costs on 
potential suppliers with no guarantee that their products will be 
successful in the market. They also take substantial time--in some 
cases, years--to complete.

VIII. VIOLATIONS ALLEGED

    39. The acquisition of Bemis by Amcor is likely to lessen 
competition substantially in each of the relevant markets set forth 
above in violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.
    40. The transaction will likely have the following anticompetitive 
effects, among others:
    a. actual and potential competition between Amcor and Bemis in the 
relevant markets will be eliminated;
    b. competition generally in the relevant markets will be 
substantially lessened; and
    c. prices in the relevant markets will likely increase.
    41. The United States requests that this Court:
    a. adjudge and decree Amcor's acquisition of Bemis to be unlawful 
and in violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18;
    b. enjoin Defendants and all persons acting on their behalf from 
consummating the proposed acquisition of Bemis by Amcor or from 
entering into or carrying out any other agreement, plan, or 
understanding the effect of which would be to combine Amcor with Bemis;
    c. award the United States its costs of this action; and
    d. grant the United States such other relief as the Court deems 
just and proper.

Dated: May 30, 2019

Respectfully submitted,

FOR PLAINTIFF UNITED STATES:

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Makan Delrahim (D.C. Bar 457795)

Assistant Attorney General, Antitrust Division.
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Andrew C. Finch (D.C. Bar 494992)

Principal Deputy Assistant Attorney General, Antitrust Division.
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Bernard A. Nigro, Jr. (D.C. Bar 412357)

Deputy Assistant Attorney General, Antitrust Division.
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Patricia A. Brink

Director of Civil Enforcement, Antitrust Division.
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Maribeth Petrizzi (D.C. Bar 435204)

Chief, Defense, Industrials, and Aerospace Section, Antitrust 
Division.
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Stephanie A. Fleming

Assistant Chief, Defense, Industrials, and Aerospace Section, 
Antitrust Division.
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Rebecca Valentine * (D.C. Bar 989607)

Jeremy Cline (D.C. Bar 1011073),
Steven A. Harris,
Samer Musallam,
John Lynch (D.C. Bar 418313),

Defense, Industrials, and Aerospace Section, Antitrust Division, 450 
Fifth Street N.W., Suite 8700, Washington, D.C. 20530, Telephone 
(202) 598-2844, Facsimile (202) 514-9033.

* Counsel of record

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, Plaintiff, v. AMCOR LIMITED and BEMIS 
COMPANY, INC., Defendants.

Case No.: 1:19-CV-01592-TNM
JUDGE: Hon. Trevor N. McFadden

[PROPOSED] FINAL JUDGMENT

    WHEREAS, Plaintiff, United States of America, filed its Complaint 
on May 30, 2019, the United States and Defendants, Amcor Limited, and 
Bemis Company, Inc., 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 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

    The 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. Sec.  18).

II. DEFINITIONS

    As used in this Final Judgment:
    A. ``Acquirer'' means Tekni-Plex, Inc. or the entity to which 
Defendants divest the Divestiture Assets.
    B. ``Amcor'' means Defendant Amcor Limited, organized under the 
laws of Australia and headquartered in Zurich, Switzerland, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, and joint ventures, and their directors, 
officers, managers, agents, and employees.
    C. ``Bemis'' means Defendant Bemis Company, Inc., a Missouri 
corporation headquartered in Neenah, Wisconsin, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.
    D. Tekni-Plex means Tekni-Plex, Inc., a Delaware corporation with 
its headquarters in Wayne, Pennsylvania, 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:
    1. All interests and rights the Defendants hold in the facilities 
located at the following addresses:
    a. 6161 North 64th Street, Milwaukee, Wisconsin 53218 (``Milwaukee 
Facility'');
    b. 150 Homer Avenue, Ashland, Massachusetts 01721 (``Ashland 
Facility''); and
    c. 4101 Lien Road, Madison, Wisconsin 53704 (``Madison Facility'');
    2. All tangible assets that comprise the Medical Flexibles 
Divestiture Business including, but not limited to, research and 
development activities; all manufacturing equipment, tooling and fixed 
assets, personal property, inventory, office furniture, materials, 
supplies, and other tangible property; all licenses, permits, 
certifications, and authorizations issued by any governmental 
organization; all contracts, teaming arrangements, agreements, leases, 
commitments, certifications, qualifications, and understandings, 
including supply agreements; all customer lists, contracts, accounts, 
and credit records; all repair and performance records; and all other 
records; and
    3. All intangible assets used in the design, development, 
production, distribution, sale, or service of Medical Flexibles 
Packaging, including, but not limited to, all patents; licenses and 
sublicenses; intellectual property; copyrights; trademarks; trade 
names; service marks; product codes; service names; technical 
information; computer software 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 Defendants provide to 
their own employees, customers, suppliers, agents, or licensees; and 
all research data concerning historic and current research and 
development efforts relating to the Divestiture Assets, including, but 
not limited to, designs of experiments and the results of successful 
and unsuccessful designs and experiments.
    F. ``Medical Flexibles Divestiture Business'' means all Amcor 
business conducted at the Milwaukee Facility and the Ashland Facility, 
and all Amcor business conducted at the Madison Facility in the design, 
development, production, distribution, sale, or service of Medical 
Flexible Packaging.
    G. ``Medical Flexible Packaging'' means any package the shape of 
which can be readily changed for medical uses and includes (i) heat-
seal coated Tyvek rollstock, (ii) heat-seal coated Tyvek die-cut lids, 
and (iii) heat-seal coated paper rollstock.
    H. ``Core-Peel Technology'' means all intellectual property, 
whether or not patented, relating to Core-Peel technology owned by 
Amcor, including (1) the International Patent Application Number PCT/
EP2017/082146 (the ``Application'') and all know-how relating to the 
subject matter described therein and (2) any patent related to

[[Page 30227]]

Core-Peel Technology that is granted to Amcor in the United States, 
including all patents granted in the United States that are part of the 
``patent family'' of the patent.
    I. ``Tyvek,'' a registered trademark of DuPont, means spinbonded 
material made from high-density polyethylene fibers.

III. APPLICABILITY

    A. This Final Judgment applies to Amcor and Bemis, 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, Defendants shall require the purchaser 
to be bound by the provisions of this Final Judgment. Defendants need 
not obtain such an agreement from the Acquirer of the assets divested 
pursuant to this Final Judgment.

IV. DIVESTITURES

    A. Defendants are ordered and directed, within 30 calendar days 
after the entry of the Hold Separate Stipulation and Order in this 
matter to divest the Divestiture Assets in a manner consistent with 
this Final Judgment to an 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 Tekni-Plex, Defendants promptly shall 
make known, by usual and customary means, 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. 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 information or documents subject to the attorney-client 
privilege 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.
    C. Defendants shall provide the Acquirer and the United States 
information relating to the personnel involved in the design, 
development, production, distribution, sale, or service of Medical 
Flexible Packaging to enable the Acquirer to make offers of employment. 
Defendants will not interfere with any negotiations by the Acquirer to 
employ any Defendant employee whose primary responsibility is the 
design, development, production, distribution, sale, or service of 
Medical Flexible Packaging.
    D. Defendants shall permit prospective Acquirers of the Divestiture 
Assets to have reasonable access to personnel and to make inspections 
of the Milwaukee Facility, Ashland Facility, and Madison Facility; 
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.
    E. Amcor may elect to sublease a portion of the Madison Facility 
for the sole purpose of continuing its current production, 
distribution, sale, or servicing of products other than Medical 
Flexible Packaging. If Amcor elects to enter into such a sublease, 
Amcor must, within six (6) months of the divestiture required under 
this Final Judgment, construct a permanent, structural partition 
dividing the Madison Facility into two distinct and separate units.
    F. Defendants shall warrant to the Acquirer that each asset will be 
operational on the date of sale.
    G. Defendants shall not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Assets.
    H. At the option of the Acquirer, Defendants shall enter into a 
supply agreement for Tyvek sufficient to meet all or part of the 
Acquirer's needs for a period of up to twelve (12) months. 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 agreement, 
Defendants shall notify the United States in writing at least three (3) 
months prior to the date the agreement expires. The terms and 
conditions of any contractual arrangement meant to satisfy this 
provision must be reasonably related to market conditions for Tyvek.
    I. Defendants shall grant a perpetual, royalty-free license to the 
Acquirer to use Core-Peel technology.
    J. Defendants shall warrant to the Acquirer (1) that there are no 
material defects in the environmental, zoning, or other permits 
pertaining to the operation of the Divestiture Assets, and (2) 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.
    K. 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 design, development, production, distribution, 
sale, and service of Medical Flexible Packaging. If any of the terms of 
an agreement between Defendants and the Acquirer to effectuate the 
divestitures required by the Final Judgment varies from the terms of 
this Final Judgment then, to the extent that Defendants cannot fully 
comply with both terms, this Final Judgment shall determine Defendants' 
obligations. The divestiture, 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 business of the design, 
development, production, distribution, sale, and service of Medical 
Flexible Packaging; 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,

[[Page 30228]]

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, in its sole discretion, 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 the 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 
agents, investment bankers, attorneys, accountants, or consultants, who 
shall be solely accountable to the Divestiture Trustee, reasonably 
necessary in the Divestiture Trustee's judgment to assist in the 
divestiture. Any such agents or consultants 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 any of its services yet unpaid and those 
of any professionals and agents retained by the Divestiture 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 that provides the Divestiture Trustee with incentives 
based on the price and terms of the divestiture and the speed with 
which it is accomplished, but the timeliness of the divestiture 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 fourteen (14) calendar days of the 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 agents or consultants, 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 agents or consultants 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 provide or develop financial and other 
information relevant to such business as the Divestiture Trustee may 
reasonably request, subject to reasonable protection for trade secrets; 
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 setting forth the Divestiture 
Trustee's efforts to accomplish the divestiture ordered under this 
Final Judgment. 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, the United States may recommend the Court appoint a 
substitute Divestiture Trustee.

VI. NOTICE OF PROPOSED DIVESTITURE

    A. 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, in its sole discretion, it objects to the Acquirer or 
any other aspect of the proposed divestiture. If the United

[[Page 30229]]

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 the Court. 
Defendants shall take no action that would jeopardize the divestiture 
ordered by the 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, signed by 
each Defendant's Chief Financial Officer and General Counsel, which 
shall describe the fact and manner of Defendants' 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) 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, including agents and consultants 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 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), for the purpose 
of securing compliance with this Final Judgment, or as otherwise 
required by law.
    D. If at the time that Defendants furnish information or documents 
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. LIMITS ON ACQUISITIONS AND COLLABORATIONS

    Defendants may not reacquire any part of the Divestiture Assets 
during the term of this Final Judgment. In addition, Defendants and 
Acquirer shall not, without the prior written consent of the United 
States, enter into any new collaboration or expand the scope of any 
existing collaboration involving any of the Divestiture Assets during 
the term of this Final Judgment. The decision whether or not to consent 
to a collaboration shall be within the sole discretion of the United 
States.

XII. RETENTION OF JURISDICTION

    The Court retains jurisdiction to enable any party to this Final 
Judgment to apply to the 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. ENFORCEMENT OF FINAL JUDGMENT

    A. The United States retains and reserves all rights to enforce the 
provisions of this Final Judgment, including the right to seek an order 
of contempt from the Court. Defendants agree that in any civil contempt 
action, any motion to show cause, or any similar action brought by the 
United States regarding an alleged violation of this Final Judgment, 
the United States may establish a violation of the decree and the 
appropriateness of any remedy therefor by a preponderance of the 
evidence, and Defendants waive any

[[Page 30230]]

argument that a different standard of proof should apply.
    B. The Final Judgment should be interpreted to give full effect to 
the procompetitive purposes of the antitrust laws and to restore all 
competition harmed by the challenged conduct. Defendants agree that 
they may be held in contempt of, and that the Court may enforce, any 
provision of this Final Judgment that, as interpreted by the Court in 
light of these procompetitive principles and applying ordinary tools of 
interpretation, is stated specifically and in reasonable detail, 
whether or not it is clear and unambiguous on its face. In any such 
interpretation, the terms of this Final Judgment should not be 
construed against either party as the drafter.
    C. In any enforcement proceeding in which the Court finds that 
Defendants have violated this Final Judgment, the United States may 
apply to the Court for a one-time extension of this Final Judgment, 
together with such other relief as may be appropriate. In connection 
with any successful effort by the United States to enforce this Final 
Judgment against a Defendant, whether litigated or resolved prior to 
litigation, that Defendant agrees to reimburse the United States for 
the fees and expenses of its attorneys, as well as any other costs 
including experts' fees, incurred in connection with that enforcement 
effort, including in the investigation of the potential violation.
    D. For a period of four (4) years after the expiration of the Final 
Judgment pursuant to Section XIV, if the United States has evidence 
that a Defendant violated this Final Judgment before it expired, the 
United States may file an action against that Defendant in this Court 
requesting that the Court order (1) Defendant to comply with the terms 
of this Final Judgment for an additional term of at least four years 
following the filing of the enforcement action under this Section, (2) 
any appropriate contempt remedies, (3) any additional relief needed to 
ensure the Defendant complies with the terms of the Final Judgment, and 
(4) fees or expenses as called for in Paragraph XIII(C).

XIV. EXPIRATION OF FINAL JUDGMENT

    Unless the Court grants an extension, this Final Judgment shall 
expire ten (10) years from the date of its entry, except that after 
five (5) years from the date of its entry, this Final Judgment may be 
terminated upon notice by the United States to the Court and Defendants 
that the divestitures have been completed and that the continuation of 
the Final Judgment no longer is necessary or in the public interest.

XV. 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. Sec.  16, including making copies available to 
the public of this Final Judgment, the Competitive Impact Statement, 
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 responses 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. Sec.  16]

-----------------------------------------------------------------------
United States District Judge

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, Plaintiff, v. AMCOR LIMITED and BEMIS 
COMPANY, INC., Defendants.

Case No.: 1:19-CV-01592-TNM
JUDGE: Hon. Trevor N. McFadden
Deck Type: Antitrust

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. Sec.  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 August 6, 2018, Defendants Amcor Limited (``Amcor'') and Bemis 
Company, Inc. (``Bemis'') entered into a Transaction Agreement, 
pursuant to which Amcor proposes to acquire all of the shares of Bemis 
for $6.8 billion. The United States filed a civil antitrust Complaint 
on May 30, 2019, seeking to enjoin the proposed acquisition. The 
Complaint alleges that the likely effect of this acquisition would be 
to substantially lessen competition in the development, production, and 
sale of heat-seal coated medical-grade Tyvek (``coated Tyvek''), heat-
seal coated medical-grade paper (``coated paper''), and heat-seal 
coated Tyvek die-cut lids (``die-cut lids''), in violation of Section 7 
of the Clayton Act, 15 U.S.C. Sec.  18. This loss of competition likely 
would result in higher prices and lower-quality medical flexible 
packaging products.
    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, Amcor is required to 
divest its Ashland, Massachusetts, Milwaukee, Wisconsin, and Madison, 
Wisconsin facilities, along with certain tangible and intangible assets 
(collectively, ``Divestiture Assets''). Under the terms of the Hold 
Separate, Amcor will take certain steps to ensure that the Divestiture 
Assets are operated as a competitively independent, economically viable 
and ongoing business concern, that will remain independent and 
uninfluenced by Amcor, and that competition is maintained during the 
pendency of the ordered divestitures.
    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 Proposed Transaction

    Amcor and Bemis are global manufacturers of flexible packaging, 
rigid containers, specialty cartons, closures, and services for the 
food, beverage, pharmaceutical, medical-device, home, and personal care 
industries. Amcor, which is headquartered in Zurich, Switzerland, sold 
more than $9 billion in packaging products in 2018, including 
approximately $288 million in sales of flexible packaging for medical 
use (``Medical Flexible Packaging'') in the United States. Bemis, which 
is headquartered in Neenah, Wisconsin, sold more than $4 billion in 
packaging products in 2018, including approximately $260.9 million in 
sales of Medical Flexible Packaging in the United States.
    In the United States, Amcor and Bemis are two of only three 
significant suppliers of three highly-engineered

[[Page 30231]]

medical packaging products that protect medical devices throughout 
their journey from a medical device manufacturer's facility into the 
hands of a medical professional: heat-seal coated medical-grade Tyvek 
rollstock (``coated Tyvek''), heat-seal coated medical-grade paper 
rollstock (``coated paper''), and heat-seal coated medical-grade Tyvek 
die-cut lidding (``die-cut lids''). In 2017, Amcor and Bemis 
represented more than 70% of sales in coated Tyvek and coated paper in 
the United States and over 50% of sales in die-cut lids in the United 
States. The proposed transaction, as initially agreed to by Defendants, 
would lessen competition substantially for these medical packaging 
products, which are the subject of the Complaint and proposed Final 
Judgment filed by the United States on May 30, 2019.

B. The Competitive Effects of the Transaction

    An extensive investigation by the United States revealed that 
Amcor's proposed acquisition of Bemis likely would result in increased 
prices and lower-quality service for U.S. customers purchasing coated 
Tyvek, coated paper, and die-cut lids. Amcor and Bemis are two of only 
three primary suppliers of these products, and for many customers, they 
are each other's closest competitor. The transaction will harm 
customers by eliminating the benefits of competition that these 
customers have realized due to head-to-head competition.
1. Relevant Markets
    As alleged in the Complaint, coated Tyvek, coated paper, and die-
cut lids are relevant product markets under Section 7 of the Clayton 
Act. Of the many materials used in Medical Flexible Packaging, medical-
grade paper and Tyvek have particular properties--breathability (i.e., 
the ability to be permeated by ethylene oxide gas during sterilization) 
and, for Tyvek, durability--that make them uniquely suited for 
sterilizing and packaging certain medical devices. Medical-grade paper 
and Tyvek may be wound on a roll (``rollstock'') or ``converted'' into 
a finished product such as a lid, bag, or pouch, and both materials may 
be heat-seal coated to impart additional properties on a medical 
device's package. Heat-seal coatings may be required by medical device 
manufacturers for certain packaging applications, to reduce the risks 
of contamination that arise when a package is difficult to open and to 
make seals between different materials possible.
    There are no substitutes for coated Tyvek, coated paper, or die-cut 
lids for certain packaging applications. Alternatives to coated Tyvek 
lack the necessary peelability, sealability, and particulate control 
attributes, and do not adhere to rigid trays. Alternatives to coated 
paper lack the necessary peelability and particulate control 
attributes, or are more expensive than coated paper. Finally, 
alternatives to die-cut lids lack the durability or the ability to 
adhere that lidding made of Tyvek possesses.
    The Complaint alleges that the relevant geographic market for each 
of the relevant product markets is the United States. Producers of 
Medical Flexible Packaging know the locations of their customers and 
can adjust their pricing based on the availability of alternatives to a 
customer at a particular location. Due to shipping costs and unique 
specifications, there is no ability for customers to arbitrage. 
Therefore, the relevant geographic market for each relevant product 
market is defined as sales made to customers in the United States.
2. Competitive Effects
    As explained in the Complaint, the proposed acquisition would 
eliminate competition between Amcor and Bemis to supply coated Tyvek, 
coated paper, and die-cut lids, resulting in higher prices and lower-
quality products. The relevant markets are highly concentrated and 
would become significantly more concentrated as a result of the 
proposed acquisition, making the transaction presumptively harmful 
under the Horizontal Merger Guidelines. Amcor and Bemis have 
established themselves as two of only three suppliers in the market 
with the necessary expertise to meet the price, quality, technical 
service, and regulatory rigors of manufacturing the relevant products. 
Competition between the two companies has constrained the ability of 
either company to raise prices, reduce quality, or limit technical 
support to customers. These constraints would no longer exist after the 
proposed acquisition is consummated.
3. Entry
    According to the Complaint, entry is unlikely to prevent or remedy 
the anticompetitive effects caused by the elimination of Bemis as an 
independent supplier. An entrant first would need a high-quality coated 
paper, coated Tyvek, or die-cut lid product to sell. Creating such a 
product would require development of a coating formula and a 
methodology for applying coating that would meet the rigorous standards 
of medical device manufacturers. The quality of the entrant's product 
then would need to be proven through a series of qualification and 
validation exercises that can take years to complete. These 
qualification and validation requirements discourage entry by imposing 
substantial costs on potential suppliers with no guarantee that their 
products will be successful in the market.
III.

EXPLANATION OF THE PROPOSED FINAL JUDGMENT

    The divestitures required by the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition with respect 
to coated Tyvek, coated paper, and die-cut lids by establishing a new, 
independent, and economically viable competitor. The proposed Final 
Judgment requires Defendants, within 30 calendar days after the entry 
of the Hold Separate by the Court, to divest the Divestiture Assets in 
such a way as to satisfy the United States, in its sole discretion, 
that the Divestiture Assets can and will be operated by the purchaser 
as a viable, ongoing business that can compete effectively in the 
relevant market. Defendants must take all reasonable steps necessary to 
accomplish the divestitures quickly and must cooperate with prospective 
purchasers.
    The proposed Final Judgment requires Defendants to divest the 
Divestiture Assets to an Acquirer acceptable to the United States, in 
its sole discretion. Because the Divestiture Assets are distributed 
across multiple sites, the United States required an upfront buyer to 
provide additional certainty that the transaction can be accomplished 
without disruption to the Medical Flexible Packaging business. The 
United States has approved Tekni-Plex, Inc. as the Acquirer of the 
Divestiture Assets. Tekni-Plex, Inc. is an experienced and well-known 
flexible packaging and medical product supplier.
    The proposed Final Judgment requires the divestitures of all 
interests and rights in three Amcor facilities involved in the design, 
development, production, distribution, sale, or service of Medical 
Flexible Packaging: one in Ashland, Massachusetts (``Ashland 
Facility''), one in Milwaukee, Wisconsin (``Milwaukee Facility''), and 
one in Madison, Wisconsin (``Madison Facility''). The Divestiture 
Assets include all tangible and intangible assets at Amcor's Milwaukee 
and Ashland Facilities, as well as all tangible and intangible Medical 
Flexible Packaging assets in the

[[Page 30232]]

Madison Facility.\1\ The divestitures of the Ashland, Milwaukee, and 
Madison Facilities will eliminate the anticompetitive effects of the 
acquisition without disrupting the supply chain of existing medical 
device manufacturer customers of those facilities, which otherwise 
would require those medical device manufacturers to revalidate their 
packaging or requalify alternative facilities, raw materials, or 
manufacturing lines.
---------------------------------------------------------------------------

    \1\ In addition to assets used to manufacture coated Tyvek, 
coated paper, and die-cut lids, the Divestiture Assets include other 
Medical Flexible Packaging manufacturing assets used to manufacture 
laminates and cold seal products. Paragraph IV(I) of the proposed 
Final Judgment also requires Amcor to grant a license to the 
Acquirer for current or future intellectual property rights in Core-
Peel technology.
---------------------------------------------------------------------------

    Paragraph IV(E) of the proposed Final Judgment provides that, for 
the sole purpose of manufacturing products other than Medical Flexible 
Packaging (for example, food packaging or personal care packaging), 
Amcor may sublease a portion of the Madison Facility. This provision 
ensures that the non-medical customers that Amcor currently serves from 
the Madison Facility can continue to be served from that facility. If 
production of those customers' products were instead moved to another 
facility, most such customers would be forced to incur significant 
expenses and supply disruptions associated with revalidating packaging 
or requalifying alternative facilities, raw materials, or manufacturing 
lines. These requalification procedures can take significant time to 
complete and create substantial supply risks to customers. 
Requalification also would likely create a long-term entanglement 
between Amcor and the Acquirer during the period in which the business 
was transitioned out of the Madison facility to a different Amcor 
facility. To avoid these issues, during the term of the Final Judgment, 
Amcor is permitted under the Final Judgment to continue its 
manufacturing operations in flexible packaging for food and other 
products other than those relating to Medical Flexible Packaging. If 
Amcor chooses to enter into a sublease, however, Amcor must, within six 
months of the divestitures required by the Proposed Final Judgment, 
construct a permanent, structural partition that physically isolates 
Amcor's operations from the Acquirer's. The partition ensures that 
Amcor and the Acquirer's businesses will be physically separated and 
that each company's competitively sensitive information will remain 
protected. Because Amcor and the Acquirer will not be producing 
competing products at the same facility during the term of the Final 
Judgment, there is no risk of competitive information sharing.
    To facilitate the Acquirer's immediate use of the Divestiture 
Assets, Paragraph IV(H) of the proposed Final Judgment provides the 
Acquirer with the option to enter into a supply agreement for Tyvek 
sufficient to meet the Acquirer's needs for a period of up to 12 
months. The United States may approve one or more extensions of the 
supply agreement for a total of up to an additional 12 months.
    Paragraph IV(A) of the proposed Final Judgment requires Amcor to 
complete its divestitures within 30 days after the entry of the Hold 
Separate Stipulation and Order. Defendants must take all reasonable 
steps necessary to accomplish the divestitures quickly and must 
cooperate with prospective purchasers.
    In the event that Defendants do not accomplish the divestitures 
within the periods prescribed in the proposed Final Judgment, the Final 
Judgment provides that the Court will appoint a trustee selected by the 
United States to effect the divestitures.
    The proposed Final Judgment also contains provisions designed to 
promote compliance and make the enforcement of the Final Judgment as 
effective as possible. Paragraph XIII(A) provides that the United 
States retains and reserves all rights to enforce the provisions of the 
proposed Final Judgment, including its rights to seek an order of 
contempt from the Court. Under the terms of this paragraph, Defendants 
have agreed that in any civil contempt action, any motion to show 
cause, or any similar action brought by the United States regarding an 
alleged violation of the Final Judgment, the United States may 
establish the violation and the appropriateness of any remedy by a 
preponderance of the evidence and that Defendants have waived any 
argument that a different standard of proof should apply. This 
provision aligns the standard for compliance obligations with the 
standard of proof that applies to the underlying offense that the 
compliance commitments address.
    Paragraph XIII(B) provides additional clarification regarding the 
interpretation of the provisions of the proposed Final Judgment. The 
proposed Final Judgment was drafted to restore all competition that 
would otherwise be harmed by the merger. Defendants agree that they 
will abide by the proposed Final Judgment, and that they may be held in 
contempt of this Court for failing to comply with any provision of the 
proposed Final Judgment that is stated specifically and in reasonable 
detail, as interpreted in light of this procompetitive purpose.
    Paragraph XIII(C) of the proposed Final Judgment provides that 
should the Court find in an enforcement proceeding that Defendants have 
violated the Final Judgment, the United States may apply to the Court 
for a one-time extension of the Final Judgment, together with such 
other relief as may be appropriate. In addition, in order to compensate 
American taxpayers for any costs associated with the investigation and 
enforcement of violations of the proposed Final Judgment, Paragraph 
XIII(C) provides that in any successful effort by the United States to 
enforce the Final Judgment against a Defendant, whether litigated or 
resolved prior to litigation, that Defendant agrees to reimburse the 
United States for attorneys' fees, experts' fees, or costs incurred in 
connection with any enforcement effort, including the investigation of 
the potential violation.
    Paragraph XIII(D) states that the United States may file an action 
against a Defendant for violating the Final Judgment for up to four 
years after the Final Judgment has expired or been terminated under 
Section XIV. This provision is meant to address circumstances such as 
when evidence that a violation of the Final Judgment occurred during 
the term of the Final Judgment is not discovered until after the Final 
Judgment has expired or been terminated or when there is not sufficient 
time for the United States to complete an investigation of an alleged 
violation until after the Final Judgment has expired or been 
terminated. This provision, therefore, makes clear that, for four years 
after the Final Judgment has expired or been terminated, the United 
States may still challenge a violation that occurred during the term of 
the Final Judgment.
    Finally, Section XIV of the proposed Final Judgment provides that 
the Final Judgment shall expire ten years from the date of its entry, 
except that after five years from the date of its entry, the Final 
Judgment may be terminated upon notice by the United States to the 
Court and Defendants that the divestitures have been completed and that 
the continuation of the Final Judgment is no longer necessary or in the 
public interest.
    The divestitures of these assets to an Acquirer acceptable to the 
United States will eliminate the anticompetitive effects of the 
acquisition in the relevant markets by establishing a new, independent, 
and economically viable competitor.

[[Page 30233]]

IV.

REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS

    Section 4 of the Clayton Act, 15 U.S.C. Sec.  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. 
Sec.  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 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 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 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 U.S. Department of Justice, Antitrust Division's internet website 
and, under certain circumstances, published in the Federal Register.
    Written comments should be submitted to:

Maribeth Petrizzi, Chief
Defense, Industrials, and Aerospace Section
Antitrust Division
United States Department of Justice
450 5th St. N.W.
Suite 8700
Washington, D.C. 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 Defendant's acquisition 
of Bemis. The United States is satisfied, however, that the 
divestitures of assets described in the proposed Final Judgment will 
preserve competition for the provision of Medical Flexible Packaging in 
the relevant markets identified by the United States. 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 60-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. Sec.  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. Sec.  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); United States v. 
U.S. Airways Grp, 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 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'').
    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 in the government's complaint, whether the Final Judgment 
is sufficiently clear, whether its enforcement mechanisms are 
sufficient, and whether the Final Judgment may positively harm third 
parties. See Microsoft, 56 F.3d at 1458-62. With respect to the 
adequacy of the relief secured by the Final Judgment, 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. Instead:

[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.


[[Page 30234]]


Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\2\
---------------------------------------------------------------------------

    \2\ See also 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'').
---------------------------------------------------------------------------

    The United States' predictions with respect to the efficacy of the 
remedy are to be afforded deference by the Court. See, e.g., Microsoft, 
56 F.3d at 1461 (recognizing courts should give ``due respect to the 
Justice Department's . . . view of the nature of its case'''); United 
States v. Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 
2016) (``In evaluating objections to settlement agreements under the 
Tunney Act, a court must be mindful that [t]he government need not 
prove that the settlements will perfectly remedy the alleged antitrust 
harms[;] it need only provide a factual basis for concluding that the 
settlements are reasonably adequate remedies for the alleged harms.'' 
(internal citations omitted)); United States v. Republic Servs., Inc., 
723 F. Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review 
to which the government's proposed remedy is accorded''); United States 
v. Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A 
district court must accord due respect to the government's prediction 
as to the effect of proposed remedies, its perception of the market 
structure, and its view of the nature of the case.''). The ultimate 
question is whether ``the remedies [obtained in the Final Judgment are] 
so inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest.''' Microsoft, 56 F.3d at 1461 (quoting 
United States v. Western Elec. Co., 900 F.2d 283, 309 (D.C. Cir. 
1990)).
    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 U.S. 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.
    In its 2004 amendments to the APPA,\3\ Congress made clear its 
intent to preserve the practical benefits of utilizing consent Final 
Judgments 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. Sec.  16(e)(2); see also U.S. 
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). This language explicitly wrote into the 
statute what Congress intended when it first 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). ``A court can make its public 
interest determination based on the competitive impact statement and 
response to public comments alone.'' U.S. Airways, 38 F. Supp. 3d at 76 
(citing United States v. Enova Corp., 107 F. Supp. 2d 10, 17 (D.D.C. 
2000)).
---------------------------------------------------------------------------

    \3\ Pub. L. 108-237, Sec.  221.
---------------------------------------------------------------------------

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: June 14, 2019

Respectfully submitted,

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

REBECCA VALENTINE * (D.C. Bar 989607)

Defense, Industrials, and Aerospace Section, Antitrust Division, 450 
Fifth Street N.W., Suite 8700, Washington, D.C. 20530, Telephone 
(202) 598-2844, Facsimile (202) 514-9033
* Counsel of record

[FR Doc. 2019-13531 Filed 6-25-19; 8:45 am]
BILLING CODE 4410-11-P