United States v. Symrise AG, et al. Proposed Final Judgment and Competitive Impact Statement, 65174-65185 [2019-25600]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 84, Number 228 (Tuesday, November 26, 2019)]
[Notices]
[Pages 65174-65185]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25600]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Symrise AG, et al. 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, 
Stipulation, and Competitive Impact Statement have been filed with the 
United States District Court for the District of Columbia in United 
States of America v. Symrise AG, et al., Civil Action No. 1:19-cv-
03263. On October 30, 2019, the United States filed a Complaint 
alleging that Symrise AG's proposed acquisition of IDF Holdco, Inc. and 
ADF Holdco, Inc.'s chicken-based food ingredients business 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 Symrise AG 
to divest its Banks County facility in Georgia that manufactures and 
sells chicken-based food ingredients.
    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

[[Page 65175]]

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 Robert Lepore, 
Acting Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, Department of Justice, 450 Fifth Street NW, Suite 8000, 
Washington, DC 20530 (telephone: 202-307-6349).

Amy Fitzpatrick,
Counsel to the Senior Director of Investigations and Litigation.

United States District Court for the District of Columbia

    United States of America, Department of Justice, Antitrust 
Divisio[beta]e 1, 37603 Holzminden, Germany and IDF Holdco, Inc., 
3801 East Sunshine Street, Springfield, MO 65809 and ADF Holdco, 
Inc., 3801 East Sunshine Street, Springfield, MO 65809, Defendants.

CASE NO.: 1:19-cv-03263
JUDGE: Hon. Royce Lamberth

Complaint

    The United States of America brings this civil action pursuant to 
Section 7 of the Clayton Act, 15 U.S.C. 18, to enjoin the acquisition 
of International Dehydrated Foods, LLC (``IDF'') and American 
Dehydrated Foods, LLC (``ADF'') (collectively ``IDF/ADF'') from IDF 
Holdco, Inc. and ADF Holdco, Inc. by Symrise AG (``Symrise'') and to 
obtain other equitable relief. The United States alleges as follows:

I. Nature of the Action

    1. Symrise's acquisition of IDF/ADF would combine two of the 
leading manufacturers and sellers of chicken-based food ingredients 
made from human-grade natural chicken, including chicken broth, chicken 
fat, and cooked chicken meat (hereafter ``chicken-based food 
ingredients'') and sold to food manufacturers in the United States. 
Symrise and IDF/ADF manufacture chicken-based food ingredients for use 
by manufacturers of food for people and pets (collectively ``food 
manufacturers'') in products such as soups, stews, sauces, gravies, dry 
seasonings, and baking mixes.
    2. Food manufacturers purchase chicken-based food ingredients to 
provide taste, nutritional content, and functional characteristics to 
the food manufacturers' end products. Food manufacturers have few 
alternatives to chicken-based food ingredients, which provide the 
unique flavor and texture profiles of food manufacturers' branded 
soups, sauces, and gravies. In addition, United States Department of 
Agriculture regulations require chicken-based food ingredients to be 
manufactured domestically, which prevents food manufacturers from 
turning to imports.
    3. IDF/ADF is the established United States market leader in the 
manufacture and sale of chicken-based food ingredients for food 
manufacturers, with a market share of approximately 54%.
    4. Symrise, a leading manufacturer of chicken-based food 
ingredients in Europe recently entered the United States market by 
building a state-of-the-art chicken-based food ingredients plant in 
Banks County, Georgia. The plant opened in October 2018. Symrise is 
poised to become the second-largest manufacturer of chicken-based food 
ingredients in the United States, as its newly opened Banks County 
plant represents 23% of the manufacturing capacity in the market.
    5. Symrise now seeks to acquire IDF/ADF. If the acquisition is 
allowed to proceed, the competition between these companies in the 
manufacture and sale of chicken-based food ingredients in the United 
States will be lost, and the merged firm will control 75% of the 
capacity in the market, leading to higher prices, reduced service 
quality, and diminished innovation.
    6. Accordingly, as alleged more specifically below, the 
acquisition, if consummated, likely would substantially lessen 
competition in violation of Section 7 of the Clayton Act, 15 U.S.C. 18, 
and should be enjoined.

II. Defendants and the Transaction

    7. Defendant Symrise is a global company headquartered in 
Holzminden, Germany.
    Symrise has diversified operations in multiple lines of business, 
including a chicken-based food ingredients business run by its Diana 
Food and Diana Pet Food subsidiaries. Symrise is the market leader in 
Europe in manufacturing and selling chicken-based food ingredients to 
food manufacturers. In 2019, Symrise began to sell products from its 
newly constructed plant in Banks County, Georgia, to United States food 
manufacturers, including to some of IDF/ADF's largest customers. The 
plant represents approximately 23% of the capacity in the market for 
the manufacture and sale of chicken-based food ingredients.
    8. Defendants IDF Holdco, Inc. and ADF Holdco, Inc. are the 
ultimate parent entities of IDF and ADF, family-owned limited liability 
companies headquartered in Springfield, Missouri. IDF manufactures 
chicken-based food ingredients. ADF holds the family's interests in 
Food Ingredient Technologies, LLC (``Fitco'') which also manufactures 
chicken-based food ingredients. The chicken-based food ingredients 
operations of IDF and ADF's Fitco business are run in an integrated 
fashion and include plants in Anniston, Alabama and Monett, Missouri. 
Like Symrise, IDF/ADF manufactures and sells chicken-based food 
ingredients to food manufacturers in the United States. IDF/ADF is the 
largest supplier of chicken-based food ingredients in the United States 
with a capacity-based market share of approximately 54% and 2018 fiscal 
year sales of $177 million.
    9. Pursuant to a Purchase Agreement dated January 31, 2019 
(``Transaction''), Symrise will acquire IDF/ADF, and related assets for 
approximately $900 million.

III. Jurisdiction and Venue

    10. 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.
    11. Defendants manufacture chicken-based food ingredients in the 
flow of interstate commerce, and their sale of chicken-based food 
ingredients substantially affects 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.
    12. Defendants have consented to venue and personal jurisdiction in 
the District of Columbia for adjudication of this matter. Venue is 
therefore proper in this district under Section 12 of the Clayton Act, 
15 U.S.C. 22 and 28 U.S.C. 1391(b) and (c).

IV. Relevant Market

    13. Chicken-based food ingredients manufactured and sold to food 
manufacturers is a relevant product market and line of commerce under 
Section 7 of the Clayton Act. Food manufacturers have no reasonable 
substitutes for chicken-based food ingredients. Because food 
manufacturers have no reasonable alternatives to chicken-based food 
ingredients, few, if any, food manufacturers would substitute to other 
products in response to a price increase.

[[Page 65176]]

    14. Food manufacturers choose from chicken-based food ingredients 
suppliers that can provide the flavor, nutritional profile, and 
functional characteristics required by the food manufacturers' 
manufacturing processes. The market for chicken-based food ingredients 
is nationwide. Symrise and IDF/ADF compete with one another for 
customers throughout the United States.
    15. A well-accepted methodology for assessing whether a group of 
products and services sold in a particular area constitutes a relevant 
market under the Clayton Act is to ask whether a hypothetical 
monopolist over all the products sold in the area would raise prices 
for a non-transitory period by a small but significant amount, or 
whether enough customers would switch to other products or services or 
purchase outside the area such that the price increase would be 
unprofitable. Fed. Trade Comm'n & U.S. Dep't of Justice Horizontal 
Merger Guidelines (2010); accord Fed. Trade Comm'n v. Whole Foods Mkt., 
548 F.3d 1028, 1038 (D.C. Cir. 2008). A hypothetical monopolist of 
chicken-based food ingredients manufactured and sold in the United 
States likely would impose at least a small but significant price 
increase because few if any customers would substitute to purchasing 
other products. Therefore, the manufacture and sale of chicken-based 
food ingredients in the United States is a relevant market under 
Section 7 of the Clayton Act.

V. Likely Anticompetitive Effects

    16. The proposed acquisition is likely to lead to anticompetitive 
effects. As an initial matter, the transaction is presumptively 
anticompetitive. The Supreme Court has held that mergers that 
significantly increase concentration in concentrated markets are 
presumptively anticompetitive and, therefore, unlawful. See United 
States v. Phila. Nat'l Bank, 374 U.S. 321, 363-65 (1963). To measure 
market concentration, courts often use the Herfindahl-Hirschman Index 
(``HHI'') as described in the Horizontal Merger Guidelines.\1\ Mergers 
that increase the HHI by more than 200 and result in an HHI above 2,500 
in any market are presumed to be anticompetitive.
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    \1\ See U.S. Dep't of Justice and Federal Trade Commission, 
Horizontal Merger Guidelines Sec.  5.3 (2010), available at https://www.justice.gov/atr/public/guidelines/hmg-2010 html. 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 its 
maximum of 10,000 points when a market 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.
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    17. The relevant market is highly concentrated and would become 
more concentrated as a result of the Transaction. IDF/ADF's share of 
the relevant market based on its maximum capacity to process chicken 
into ingredients is approximately 54%. Symrise's new Banks County plant 
has the capacity to take a 23% share of the market. None of the 
remaining manufacturers holds larger than 6% share.
    18. The market for the manufacture and sale of chicken-based food 
ingredients in the United States currently is highly concentrated, with 
an HHI over 3,500. The Transaction would increase the HHI by about 
2,400, rendering the Transaction presumptively anticompetitive under 
Supreme Court precedent.
    19. Defendants are two of only a few firms that have the technical 
capabilities and expertise to manufacture and sell chicken-based food 
ingredients in the United States. Defendants vigorously compete on 
price, service quality, and product development, and customers have 
benefitted from this competition.
    20. The Transaction would eliminate the competition between 
Defendants to manufacture and sell chicken-based food ingredients to 
food manufacturers in the United States. After the Transaction, Symrise 
would gain the incentive and ability to raise its prices significantly 
above competitive levels, reduce its investment in research and 
development, and provide lower levels of service.

VI. Absence of Countervailing Factors

    21. Entry by a new manufacturer of chicken-based food ingredients 
or expansion of existing marginal manufacturers would not be timely, 
likely, and sufficient to prevent the substantial lessening of 
competition caused by the elimination of IDF/ADF as an independent 
competitor.
    22. Successful entry into the market for the manufacture and sale 
of chicken-based food ingredients in the United States is difficult, 
costly, and time consuming. Any entrant would need to develop 
infrastructure, research and development capabilities to allow it to 
manufacture ingredients to match the taste and other characteristics 
desired by customers, supply relationships to provide reliable access 
to raw materials, and a track record of successfully meeting customer 
needs in the food industry. Because of the significant investment food 
manufacturers make in developing products according to specific taste, 
nutritional, and other characteristics, as well as the high costs of 
any problem or delay in production, food manufacturers are unlikely to 
switch away from established chicken-based food ingredients 
manufacturers, making it difficult for new chicken-based food 
ingredients manufacturers to enter the market. As an example, it took 
Symrise, an experienced food ingredients manufacturer with extensive 
chicken-based food ingredients operations in Europe, almost three years 
to construct the plant in Banks County, Georgia, that opened recently. 
Finally, as noted above, United States Department of Agriculture 
regulations prevent food manufacturers from importing products from 
abroad.
    23. Defendants cannot demonstrate cognizable and merger-specific 
efficiencies that would be sufficient to offset the Transaction's 
anticompetitive effects.

VII. Violation Alleged

    24. The effect of the Transaction, if consummated, would likely be 
to lessen substantially competition for chicken-based food ingredients 
manufactured and sold to food manufacturers in the United States in 
violation of Section 7 of the Clayton Act, 15 U.S.C. 18. Unless 
restrained, the Transaction would likely have the following effects, 
among others:
    (a) Competition in the market for chicken-based food ingredients 
sold to food manufacturers in the United States would be substantially 
lessened;
    (b) prices for chicken-based food ingredients sold to food 
manufacturers in the United States would increase;
    (c) the quality of chicken-based food ingredients sold to food 
manufacturers in the United States would decrease; and
    (d) innovation in the market for chicken-based food ingredients 
sold to food manufacturers in the United States would diminish.

VIII. Requested Relief

    25. The United States requests that this Court:
    (a) Adjudge Symrise's proposed acquisition of IDF/ADF to violate 
Section 7 of the Clayton Act, 15 U.S.C. 18;
    (b) Permanently enjoin and restrain Defendants from consummating 
the proposed acquisition by Symrise of IDF/ADF or from entering into or 
carrying out any contract, agreement, plan, or

[[Page 65177]]

understanding, the effect of which would be to combine Symrise and IDF/
ADF;
    (c) Award the United States its costs for this action; and
    (d) Award the United States such other and further relief as the 
Court deems just and proper.

Dated: October 30, 2019

Respectfully submitted,

FOR PLAINTIFF UNITED STATES:

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Makan Delrahim
Assistant Attorney General

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Bernard A. Nigro, Jr.
Deputy Assistant Attorney General

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Kathleen S. O'neill
Senior Director of Investigations & Litigation

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Robert A. Lepore
Acting Chief, Transportation, Energy & Agriculture Section

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Patricia C. Corcoran
Assistant Chief, Transportation, Energy & Agriculture Section

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William M. Martin
Jeremy Evans (D.C. Bar #478097)
Barbara W. Cash

Attorneys for the United States, U.S. Department of Justice, 
Antitrust Division, 450 5th Street NW, Suite 8000, Washington, DC 
20530, (202) 598-8193, [email protected].

United States District Court for the District of Columbia

    United States of America, Department of Justice, Antitrust 
Division, 450 5th Street NW, Suite 8000, Washington, DC 20530 
Plaintiff, v. Symrise AG, M[uuml]hlenfeldstra[beta]e 1, 37603 
Holzminden, Germany and IDF Holdco, Inc., 3801 East Sunshine Street, 
Springfield, MO 65809 and ADF Holdco, Inc., 3801 East Sunshine 
Street, Springfield, MO 65809, Defendants.

[Proposed] Final Judgment

    Whereas, Plaintiff United States of America, filed its Complaint on 
October 30, 2019, the United States and Defendants, Symrise AG 
(``Symrise''), ADF Holdco, Inc. (``ADF Seller'') and IDF Holdco, Inc. 
(``IDF Seller''), 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 Defendants agree 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 divestiture required below can and will be made and that Defendants 
will not later raise any 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, 15 U.S.C. 18.

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer'' means Kerry, Inc., a Delaware corporation, and 
Kerry Luxembourg S.a.r.l., a Luxembourg soci[eacute]t[eacute] [agrave] 
responsabilit[eacute] limit[eacute]e, or the entity to whom Defendants 
divest the Divestiture Assets.
    B. ``Symrise'' means Defendant Symrise AG, an Aktiengesellschaft, 
or publicly listed company, organized under the laws of Germany, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, and joint ventures, and their directors, 
officers, managers, agents, and employees.
    C. ``IDF Seller'' means Defendant IDF Holdco, Inc., a Missouri 
corporation, with its headquarters in Springfield, Missouri, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, and joint ventures, and their directors, 
officers, managers, agents, and employees.
    D. ``ADF Seller'' means Defendant ADF Holdco, Inc., a Missouri 
corporation, with its headquarters in Springfield, Missouri, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, and joint ventures, and their directors, 
officers, managers, agents, and employees.
    E. ``Diana Food'' means Diana Food, Inc. (previously known as Diana 
Naturals, Inc.), a wholly-owned subsidiary of Symrise and an Oregon 
corporation with its headquarters in Silverton, Oregon, its successors 
and assigns, and its subsidiaries and divisions, groups, affiliates, 
partnerships, and joint ventures, and its directors, officers, 
managers, agents and employees.
    F. ``Development Authority'' means the Development Authority of 
Banks County, Georgia, which currently holds legal title to the real 
estate and real property related to the Banks County facility pursuant 
to the Diana Food Bonds-for-Title Transaction.
    G. ``Banks County facility'' means the production facility and 
surrounding real estate located at 171 Diana Way Commerce, GA 30529, 
owned by the Development Authority, leased to Diana Food pursuant to 
the Diana Food Bond-for-Title Transaction, and built to manufacture 
certain Chicken-Based Food Ingredients.
    H. ``Chicken-Based Food Ingredients'' means ingredients 
manufactured and sold to food manufacturers for use in food for human 
consumption or pet consumption (including chicken broth, chicken fat, 
and cooked chicken meat) made in whole or in part from human- grade 
natural chicken.
    I. ``Diana Food Bonds-for-Title Transaction'' means the current 
ownership and lease arrangement between Diana Food and the Development 
Authority for the Banks County facility.
    J. ``Divestiture Assets'' means:
    1. All interests and rights Diana Food holds in the Banks County 
facility;
    2. All bonds, bond documents, grant documents, and lease agreements 
to which Diana Food is a party, related to the Banks County facility;
    3. All tangible assets located at the Banks County facility and all 
tangible assets located elsewhere primarily related to the development, 
production, servicing, and sale of Chicken-Based Food Ingredients 
manufactured at the Banks County facility. Tangible assets includes, 
but is 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 relating to Chicken-Based Food 
Ingredients manufactured at the Banks County facility; all contracts, 
teaming arrangements, agreements, leases, commitments, certifications, 
and understandings, including supply agreements; all customer lists, 
contracts, accounts, and credit records; all repair and performance 
records; and all other records relating to Chicken-Based Food 
Ingredients manufactured at the Banks

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County facility. Defendant Symrise may retain a copy of records 
necessary for tax, accounting, or regulatory purposes. To the extent 
any records also include commercially sensitive information, 
proprietary information, or personally identifiably information 
pertaining solely to Defendant Symrise's businesses, operations, or 
products not being transferred to Acquirer, Defendant Symrise may 
withhold or redact such portions of said records prior to Defendant 
Symrise's transfer to Acquirer;
    4. All intangible assets used in the development, production, 
servicing, and sale of Chicken-Based Food Ingredients manufactured at 
the Banks County facility, including, but not limited to all patents; 
licenses and sublicenses; intellectual property; copyrights; 
trademarks; trade names; service marks; 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 
relating to Chicken-Based Food Ingredients manufactured at the Banks 
County facility including but not limited to designs of experiments and 
the results of successful and unsuccessful designs and experiments.
    Notwithstanding the above definition,
    (1) Defendant Symrise shall license to Acquirer, through a 
perpetual and transferable license that is paid up, royalty free, 
worldwide, and irrevocable, any know-how, including research and 
development information, unpatented inventions, rights in research and 
development, and technical data or information, that is (i) controlled 
by Defendant Symrise, (ii) used in or necessary to the development, 
production, servicing, and sale of Chicken-Based Food Ingredients 
manufactured at the Banks County facility, and (iii) used in or 
necessary to the development, production, servicing, and sale of other 
Symrise products;
    (2) the Divesture Assets do not include the intangible assets that 
Defendant Symrise shall provide as services or use to provide services 
identified in any transition services agreement entered between the 
Acquirer and Defendant Symrise, as described infra in Paragraph IV(G); 
and
    (3) the Divestiture Assets do not include any trademarks, trade 
names, service marks, or service names containing the name ``Symrise'' 
or ``Diana.

III. Applicability

    A. This Final Judgment applies to Symrise, IDF Seller, and ADF 
Seller 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 acquirers of the assets divested 
pursuant to this Final Judgment.

IV. Divestiture

    A. Defendants are ordered and directed, within forty-five (45) 
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 the Defendants attempt to divest the Divestiture 
Assets to an Acquirer other than Kerry, Inc., 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 Acquirer and the United States with 
organization charts and other information relating to the personnel who 
spend all, or a majority of their business time involved in the 
development, production, servicing, and sale of Chicken-Based Food 
Ingredients manufactured at the Banks County facility, including name, 
job title, experience, 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 Acquirer to make offers of employment. Upon 
request, Defendants shall make such personnel available for interviews 
with Acquirer during normal business hours at a mutually agreeable 
location and will not interfere with any negotiations by Acquirer to 
employ such personnel involved in the development, production, 
servicing, and sale of Chicken-Based Food Ingredients manufactured at 
the Banks County facility. Interference with respect to this paragraph 
includes, but is not limited to, offering to increase the salary or 
benefits of such personnel involved in the development, production, 
servicing, and sale of Chicken-Based Food Ingredients manufactured at 
the Banks County facility other than as part of a company-wide increase 
in salary or benefits granted in the ordinary course of business.
    D. Defendant Symrise shall permit prospective Acquirers of the 
Divestiture Assets to have reasonable access to personnel who spend 
all, or a majority of their business time involved in the development, 
production, servicing, and sale of Chicken-Based Food Ingredients 
manufactured at the Banks County facility and to make inspections of 
the Banks County facility; access to any and all environmental, zoning, 
and other permit documents and information; access to any of the 
underlying documents for the Diana Food Bonds-for-Title Transaction; 
and access to any and all financial, operational, or other documents 
and information customarily provided as part of a due diligence 
process. For any employees who elect employment with Acquirer, 
Defendants shall waive all noncompete and nondisclosure agreements. For 
a period of eighteen (18) months after the divestiture has been 
completed under Section IV or V, Defendants may not solicit to hire, or 
hire, any employee hired by Acquirer, unless: (1) Acquirer agrees in 
writing that Defendants may solicit or hire that employee; or, (2) the 
employee responds to a general advertisement or solicitation not 
targeted at employees who accept employment with Acquirer. Nothing in

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Paragraphs IV(C) and (D) shall prohibit Defendant Symrise from 
maintaining reasonable restrictions on the disclosure by any employee 
who accepts an offer of employment with Acquirer of Defendant Symrise's 
proprietary non-public information that is (1) not otherwise required 
to be disclosed by this Final Judgment, (2) related solely to Defendant 
Symrise's businesses and clients, and (3) unrelated to the Divestiture 
Assets.
    E. Defendant Symrise shall warrant to Acquirer that each asset will 
be operational on the date of sale.
    F. Defendants shall not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Assets. At 
the option of Acquirer, and subject to approval by the United States, 
Defendant Symrise shall enter into a transition services agreement to 
provide back office and information technology support for the Banks 
County facility for a period ranging between three (3) and twenty (20) 
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 
three (3) months. 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 
needed assistance. The Symrise employees tasked with providing these 
transition services may not share any competitively sensitive 
information of Acquirer with any other Symrise, IDF Seller, or ADF 
Seller employee. If Acquirer seeks an extension of the term of this 
transition services agreement, Defendants shall notify the United 
States in writing at least three (3) months prior to the date the 
transition services agreement expires.
    G. Defendant Symrise shall warrant to Acquirer (1) that there are 
no material defects in the environmental, zoning, certifications, 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, certifications, or other permits relating to the 
operation of the Divestiture Assets.
    H. At the option of Acquirer, and with the written consent of the 
United States, Defendants may convey, transfer, or otherwise sell 
Divestiture Assets to the Development Authority in exchange for tax-
exempt bonds pursuant to the Diana Food Bonds-for-Title Transaction 
arrangement in order to facilitate the divestiture. 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 Acquirer as part of a viable, ongoing business in the 
manufacture and sale of Chicken-Based Food Ingredients in the United 
States, and that the divestiture will remedy the competitive harm 
alleged in the Complaint. If any of the terms of an agreement between 
Defendants and 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 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 market for the manufacture and sale of 
Chicken-Based Food Ingredients; 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 gives Defendants the ability unreasonably to 
raise Acquirer's costs, to lower Acquirer's efficiency, or otherwise to 
interfere in the ability of 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, 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 or consultants, including, but not limited to, investment 
bankers, attorneys, and accountants, 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 
Defendant Symrise 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 
agents and consultants retained by the Divestiture Trustee, all 
remaining money shall be paid to Defendant Symrise and the trust shall 
then be terminated. The compensation of the Divestiture Trustee and any 
agents and consultants 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 the timeliness of the divestiture is 
paramount. If the Divestiture Trustee and Defendant Symrise 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 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 
agents or consultants, provide

[[Page 65180]]

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 
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 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 by this Final Judgment within six (6) months of appointment, 
the Divestiture Trustee must promptly provide the United States with 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. 
The United States will have the right to make additional 
recommendations consistent with the purpose of the trust to the Court. 
The Court thereafter may enter such orders as it deems appropriate to 
carry out the purpose of the Final Judgment, which, if necessary, may 
include extending the trust and the term of the Divestiture Trustee's 
appointment by a period requested by the United States. 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. In the event Defendants are divesting the Divestiture Assets to 
an Acquirer other than Kerry, Inc., 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 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 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 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 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 V, Defendants 
shall deliver to the United States an affidavit, signed by each 
Defendant's chief financial officer and general counsel, describing the 
fact and manner of Defendants' compliance with Section IV or 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 
and complete the sale of 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

[[Page 65181]]

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 (1) 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 the 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 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 responses 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 the 
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

    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 argument that a different standard 
of proof should apply.
    B. This Final Judgment should be interpreted to give full effect to 
the procompetitive purposes of the antitrust laws and to restore all 
competition the United States alleged was 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 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 before 
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 following the expiration of the 
Final Judgment, 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 this Section.

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.

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, 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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[[Page 65182]]

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United States District Judge

United States District Court for the District of Columbia

    United States of America, Department of Justice, Antitrust 
Division, 450 5th Street NW, Suite 8000, Washington, DC 20530, 
Plaintiff, v. Symrise AG, M[uuml]hlenfeldstra[beta]e 1, 37603 
Holzminden, Germany and IDF Holdco, Inc., 3801 East Sunshine Street, 
Springfield, MO 65809 and ADF Holdco, Inc., 3801 East Sunshine 
Street, Springfield, MO 65809, Defendants.

Case No.: 1:19-cv-03263
Judge: Hon. Royce Lamberth

Competitive Impact Statement

    The United States of America, under Section 2(b) of the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(b)-(h) (the ``APPA'' or 
``Tunney Act''), 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 January 31, 2019, Symrise AG (``Symrise'') agreed to acquire 
International Dehydrated Foods, LLC (``IDF''), and American Dehydrated 
Foods, LLC (``ADF'') (collectively ``IDF/ADF''), from IDF Holdco, Inc. 
and ADF Holdco, Inc., for approximately $900 million. The United States 
filed a civil antitrust Complaint on October 30, 2019, seeking to 
enjoin the proposed acquisition. The Complaint alleges that the likely 
effect of this acquisition would be to substantially lessen competition 
for the manufacture and sale of chicken-based food ingredients 
(including chicken broth, chicken fat, and cooked chicken meat) for 
manufacturers of food for people and pets (collectively ``food 
manufacturers'') in violation of Section 7 of the Clayton Act, 15 
U.S.C. 18.
    At the same time the Complaint was filed, the United States filed a 
Hold Separate Stipulation and Order (``Hold Separate'') and proposed 
Final Judgment, which are designed to address the anticompetitive 
effects of the acquisition. Under the proposed Final Judgment, which is 
explained more fully below, Defendants are required to divest, to 
Kerry, Inc. (``Kerry''), a global manufacturer of ingredients and 
recipe solutions for the food and beverage industry, or another 
acquirer approved by the United States, Symrise's newly constructed 
facility located in Banks County, Georgia (the ``Banks County 
facility'') which was built to manufacture and sell chicken-based food 
ingredients; along with certain tangible and intangible assets 
(collectively, the ``Divestiture Assets''). Under the terms of the Hold 
Separate, Defendants will take certain steps to ensure that the 
Divestiture Assets are operated as a competitively independent, 
economically viable and ongoing business concern, which will remain 
independent and uninfluenced by Symrise, 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 will terminate this action, except that the 
Court will retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. Description of Events Giving Rise to the Alleged Violation

A. The Defendants

    Symrise, an Aktiengesellschaft, or publicly listed company, 
organized under the laws of Germany, is headquartered in Holzminden, 
Germany. Symrise is active globally in three main business segments: 
(i) Flavor; (ii) nutrition; and (iii) scent and care. In its 2018 
fiscal year, Symrise had global sales of EUR 3.154 billion (or 
approximately $3.53 billion). Symrise's nutrition segment, represented 
by its Diana division, which also operates in the United States, 
specializes in producing natural functional ingredients for food 
manufacturers and aquaculture.
    In October 2018, Diana Food, part of the Diana division within 
Symrise, opened the Banks County facility. The Banks County facility 
marked Symrise's entrance into the U.S. market for the manufacture and 
sale of chicken-based food ingredients for food manufacturers, to 
compete with incumbent suppliers, such as IDF/ADF. Production at the 
Banks County facility began in 2019. Diana Food's sales for chicken-
based food ingredients manufactured at the Banks County facility 
continue to ramp up and Symrise expects, and has budgeted for, 
significant sales by year-end 2019. Moreover, Symrise envisions 
continuing to gain shares of the U.S. market thereafter.
    IDF Holdco, Inc. and ADF Holdco, Inc. are the ultimate parent 
entities of IDF and ADF. IDF and ADF are limited liability companies 
headquartered in Springfield, Missouri. IDF manufactures and sells 
chicken-based food ingredients. ADF owns 50% of Food Ingredient 
Technologies, LLC (``Fitco'') which also manufactures and sells 
chicken-based food ingredients. Although legally separate entities, IDF 
and ADF operate as an integrated business unit and collectively are the 
largest developers and manufacturers in the United States of chicken-
based food ingredients for food manufacturers. The companies develop 
and manufacture chicken-based food ingredients at facilities in Monett, 
Missouri, and Anniston, Alabama. IDF/ADF's 2018 annual total sales were 
approximately $266 million, of which approximately $177 million was 
attributable to the sale of chicken-based food ingredients.

B. The Competitive Effects of the Transaction

1. Relevant Markets
    As explained in the Complaint, the manufacture and sale of chicken-
based food ingredients (including chicken broth, chicken fat, and 
cooked chicken meat) for food manufacturers is a relevant product 
market under Section 7 of the Clayton Act, 15 U.S.C. 18. The 
ingredients at issue are human-grade quality and are relied upon by 
food manufacturers for their taste and nutritional attributes. The 
chicken broth, chicken fat, and cooked chicken meat are each available 
in different forms and offer different taste profiles, nutrition, and 
ingredient characteristics that allow for limited substitution with 
other products.
    Alternatives to chicken-based food ingredients may lack the taste, 
nutritional attributes, form, or labelling abilities desired by food 
manufacturers. For example, a purchaser of human-grade natural chicken 
broth for use in a finished chicken broth may not switch to turkey 
broth. Nor is a purchaser of human-grade natural cooked chicken meat 
likely to switch to turkey, tofu, or any other meat product for use in 
chicken noodle soup when the price of human-grade natural chicken broth 
or cooked chicken meat increases by a significant non-transitory 
amount.
    Additionally, some pet food manufacturers producing end-products 
with certain ingredient or health claims use only human-grade chicken-
based food ingredients, and cannot make the necessary ingredient or 
health claims with non-human-grade products.
    Although some food manufacturers may be able to reformulate their 
end-products to decrease the amount of chicken-based food ingredients 
called for in a certain formula or recipe, at least some manufacturers 
may not be able to reformulate to an extent that would allow for 
complete substitution. Additionally, even a small reformulation to 
limit the amount of chicken-based food ingredients used in a given 
recipe requires time-consuming

[[Page 65183]]

reformulation work by food manufacturers. This is especially true 
because a food manufacturer may need its end-product to maintain the 
same nutritional and taste attributes that consumers expect, making 
switching, even in small amounts, impractical and potentially costly. 
For these reasons, a hypothetical profit-maximizing monopolist 
manufacturer and seller of chicken-based food ingredients for food 
manufacturers in the United States could profitably impose at least a 
small but significant and non-transitory price increase.
    The relevant geographic market for the manufacture and sale of 
chicken-based food ingredients for food manufacturers is the United 
States. Domestic customers of chicken-based food ingredients for use in 
food for human consumption or pet consumption cannot buy the products 
from outside of the United States to use domestically because of 
restrictions imposed by the United States Department of Agriculture 
(``USDA'') that prohibit importation into the United States of natural 
chicken ingredients. Accordingly, the United States is the relevant 
geographic market within the meaning of Section 7 of the Clayton Act, 
15 U.S.C. 18.
2. Competitive Effects
    As explained in the Complaint, the proposed acquisition would 
eliminate the burgeoning competition between IDF/ADF and Symrise, the 
likely effect of which would be a substantial lessening of competition 
for the manufacture and sale of chicken-based food ingredients for food 
manufacturers, resulting in higher prices and lower quality products. 
The relevant market is highly concentrated, with IDF/ADF having a 54% 
market share by capacity of the chicken-based food ingredients market 
and 2018 sales of $177 million. Symrise recently entered this market 
through the construction of the Banks County facility which began to 
sell chicken-based food ingredients to food manufacturers earlier this 
year, including to some of IDF/ADF's largest customers. The brand-new 
plant has the capacity to take approximately 23% of the market, making 
it IDF/ADF's largest competitor. This would give the merged company 
more than three-quarters of the market by capacity for the manufacture 
and sale of chicken-based food ingredients, with no other individual 
competitor having more than a 6% share.
3. Entry
    As alleged in the Complaint, entry of additional competitors into 
the market for the manufacture and sale of chicken-based food 
ingredients for food manufacturers is unlikely to be timely, likely, or 
sufficient to prevent the harm to competition that would result if the 
proposed transaction were consummated.
    Any new entrant would need to develop infrastructure and research 
and development capabilities in order to start manufacturing and 
selling chicken-based ingredients. This would require significant time 
and financial resources as Symrise's recent entry experience 
demonstrates. Symrise, a company with significant chicken-based food 
ingredient operations in Europe, still needed almost three years and 
over $54 million dollars to construct the Banks County facility. Any 
new entrant also would need to work with food manufacturers to develop 
chicken-based food ingredients that meet the specific flavor, 
nutritional and other characteristics sought by the customer. This 
often requires extensive and time-consuming testing between a facility 
and the food manufacturer customer