United States v. Stone Canyon Industries Holdings LLC, et al.; Proposed Final Judgment and Competitive Impact Statement, 23982-23998 [2021-09504]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 86, Number 85 (Wednesday, May 5, 2021)]
[Notices]
[Pages 23982-23998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09504]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Stone Canyon Industries Holdings LLC, 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. Stone Canyon Industries Holdings LLC, Civil Action 
No. 21-cv-01067. On April 19, 2021, the United States filed a Complaint 
alleging that the acquisition of Morton Salt, Inc. by SCIH Salt 
Holdings Inc. (``SCIH'') 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 SCIH to divest its US Salt LLC subsidiary.
    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 submitted in English and 
directed to Katrina Rouse, Chief, Defense, Industrials, and Aerospace 
Section, Antitrust Division, Department of Justice, 450 Fifth Street 
NW, Suite 8700, Washington, DC 20530.

Suzanne Morris,
Chief, Premerger and Division Statistics, Antitrust Division.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, U.S. Department of Justice, Antitrust 
Division, 450 Fifth Street N.W., Suite 8700, Washington, DC 20530. 
Plaintiff, v. STONE CANYON INDUSTRIES HOLDINGS LLC, 1875 Century 
Park East, Suite 320, Los Angeles, CA 90067, SCIH SALT HOLDINGS 
INC., 10995 Lowell Avenue, Suite 500, Overland Park, KS 66210, K+S 
AKTIENGESELLSCHAFT Bertha-von-Suttner-Str. 7, 34131 Kassel, Hesse, 
Germany, and MORTON SALT, INC., 444 West Lake Street, Suite 300, 
Chicago, IL 60606, Defendants.

Civil Action No.: 1:21-cv-01067-TJK
Judge Timothy J. Kelly

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 Stone Canyon Industries 
Holdings LLC (``Stone Canyon''), SCIH Salt Holdings Inc. (``SCIH''), 
K+S Aktiengesellschaft (``K+S AG''), and Morton Salt, Inc. (``Morton'') 
to enjoin SCIH's proposed acquisition of assets including Morton from 
K+S AG. The United States complains and alleges as follows:

I. Nature of the Action

    1. Pursuant to a Transaction Agreement dated October 5, 2020, SCIH 
intends to acquire assets including Morton from K+S AG for 
approximately $3.2 billion. As a result of the acquisition, SCIH would 
control both Morton and US Salt, which are the largest suppliers of 
certain evaporated salt products in the United States.
    2. Together, Morton and US Salt would have a monopoly in the United 
States and Canada for pharmaceutical-grade salt, the purest grade of 
evaporated salt, which is used to make life-saving treatments and 
products for patients in need of dialysis fluid, intravenous saline 
solution, or other medical products.
    3. Additionally, Morton and US Salt are two of only three companies 
that supply U.S. households with ``round-can'' table salt, a type of 
evaporated salt that is sold in 26-ounce round containers with a metal 
spout and used to flavor food.
    4. Morton and US Salt are also two of only three major suppliers in 
the northeastern United States of bulk evaporated salt, which is used 
by food processors and chemical manufacturers to make pre-packaged food 
and everyday cleaning products.
    5. Today, customers benefit from competition between Morton and US 
Salt in the form of lower prices, higher quality products, and/or 
improved service. The proposed transaction would eliminate this 
competition, driving the opposite result: Higher prices, lower quality 
products, and poorer service for customers of pharmaceutical-grade salt 
in the United States and Canada, for customers of round-can table salt 
in the United States, and for customers of bulk evaporated salt in the 
northeastern United States.
    6. Accordingly, SCIH's acquisition of Morton would violate Section 
7 of the Clayton Act, 15 U.S.C. 18, and should be enjoined.

II. The Parties and the Transaction

    7. K+S AG is a chemical company headquartered in Kassel, Germany. 
In 2020, K+S AG reported revenues of approximately $4.4 billion. K+S 
AG's Operating Unit Salt Americas business includes Morton as well as 
K+S Windsor Salt, which sells salt products in Canada, and Sociedad 
Punta de Lobos, which sells salt products in Chile.
    8. Morton is a K+S AG subsidiary with approximately $1 billion in 
revenue in 2020. Morton is the largest supplier of pharmaceutical-grade 
salt in the United States and Canada, the largest supplier of round-can 
table salt in the United States, and one of only three suppliers of 
bulk evaporated salt in the northeastern United States.
    9. Stone Canyon is an industrial holding company incorporated in 
Delaware and headquartered in Los Angeles, California. Stone Canyon 
acquired Kissner Group Holdings LP, which it later renamed SCIH, in 
April 2020.
    10. SCIH is a subsidiary of Stone Canyon and is headquartered in 
Overland Park, Kansas. In 2020, SCIH had revenues of approximately $1 
billion. SCIH is a leading supplier of salt products, including 
evaporated salt.
    11. US Salt, a subsidiary of SCIH with approximately $95 million in 
revenues

[[Page 23983]]

in 2020, is the nation's second-largest supplier of pharmaceutical-
grade salt in the United States and Canada, the second-largest supplier 
of round-can table salt in the United States, and one of only three 
suppliers of bulk evaporated salt in the northeastern United States.
    12. Pursuant to a Transaction Agreement dated October 5, 2020, SCIH 
agreed to acquire K+S AG's Operating Unit Salt Americas business, 
including Morton, for approximately $3.2 billion.

III. Jurisdiction and Venue

    13. The United States brings this action under Section 15 of the 
Clayton Act, 15 U.S.C. 25, to prevent and restrain Defendants from 
violating Section 7 of the Clayton Act, 15 U.S.C. 18.
    14. Defendants' activities substantially affect interstate 
commerce. Defendants sell pharmaceutical-grade salt and round-can table 
salt throughout the United States and bulk evaporated salt throughout 
the northeastern United States. This Court has subject matter 
jurisdiction over this matter pursuant to Section 15 of the Clayton 
Act, 15 U.S.C. 25, and 28 U.S.C. 1331, 1337(a), and 1345.
    15. Defendants have consented to venue and personal jurisdiction in 
this judicial district. Venue is proper under Section 12 of the Clayton 
Act, 15 U.S.C. 22, and 28 U.S.C. 1391(b) and (c)(2), for Stone Canyon, 
SCIH, and Morton, and venue is proper for K+S AG, a German corporation, 
under 28 U.S.C. 1391(c)(3).

IV. Relevant Markets

A. Relevant Product Markets

    16. Morton and SCIH's US Salt subsidiary both produce and sell 
evaporated salt. Evaporated salt is a type of sodium chloride produced 
through ``vacuum evaporation.'' In the vacuum evaporation process, 
water is pumped into a salt deposit where the salt dissolves, and the 
resulting brine is forced into an evaporator on the surface where it is 
boiled in a series of pans until only the salt remains. Evaporated salt 
is nearly 100% sodium chloride and contains almost no other trace 
minerals. Because of the evaporation process, individual grains of 
evaporated salt are also more consistent and regularly shaped than 
other forms of salt.
    17. Evaporated salt is distinct from salt created through other 
production methods, such as rock salt and solar salt. Rock salt is 
mined and then crushed into smaller sizes before being transported to 
the surface. Rock salt is less expensive to produce than evaporated 
salt, but it is also coarser, irregularly shaped, and contains other 
minerals and impurities. As a result, rock salt is used for 
applications that have less demanding quality requirements such as de-
icing roads. Solar salt is created when salt water is captured in 
shallow ponds where the sun evaporates most of the water. It can only 
be produced in warm climates where the evaporation rate exceeds the 
precipitation rate. Solar salt is less pure and not as uniform in shape 
as evaporated salt, but it is purer than rock salt. Solar salt is used 
for applications such as water softening.
    18. Evaporated salt typically is used in applications that require 
the highest quality of salt, such as human consumption. There are 
different types of evaporated salt that have different characteristics, 
end uses, and customers. Three types of evaporated salt produced by 
Defendants constitute relevant product markets--pharmaceutical-grade 
salt, round-can table salt, and bulk evaporated salt.
i. Pharmaceutical-Grade Salt
    19. Pharmaceutical-grade salt is the grade of salt with the highest 
percentage of sodium chloride and thus is the purest grade of 
evaporated salt. Pharmaceutical-grade salt is used in the 
pharmaceutical industry as a building block for a number of life-saving 
treatments and products, including dialysis fluid, intravenous saline 
solution, and other medical products. Pharmaceutical-grade salt must be 
evaporated from salt deposits of extremely high purity and then undergo 
post-production processing to ensure that it contains virtually no 
trace minerals or other impurities.
    20. Because of these stringent standards, the mining and production 
process for pharmaceutical-grade salt must be extensively monitored and 
documented to ensure purity and consistency across production batches. 
This documentation must then be provided to customers as a validation 
of the quality and purity of the pharmaceutical-grade salt.
    21. Rock salt and solar salt do not meet the purity requirements 
for pharmaceutical-grade salt. Other grades of evaporated salt--for 
example, salt used in food processing--also cannot serve as a 
substitute for pharmaceutical-grade salt. Pharmaceutical-grade salt 
must contain a higher percentage of sodium chloride than other types of 
evaporated salt. This ensures that it does not contain trace minerals 
that would impact the efficacy of pharmaceutical products made using 
pharmaceutical-grade salt. Pharmaceutical-grade salt also cannot 
contain additives such as anti-caking agents that are added during the 
processing of other types of evaporated salt. Because of these 
requirements, pharmaceutical-grade salt is more difficult to produce 
than other forms of evaporated salt.
    22. In the event of a small but significant increase in price by a 
hypothetical monopolist of pharmaceutical-grade salt, substitution away 
from pharmaceutical-grade salt would be insufficient to render the 
price increase unprofitable. Pharmaceutical-grade salt is therefore a 
line of commerce, or relevant product market, for purposes of analyzing 
the effects of the acquisition under Section 7 of the Clayton Act, 15 
U.S.C. 18.
ii. Round-Can Table Salt
    23. Table salt is evaporated salt that is processed for human 
consumption. It is regulated by the Food and Drug Administration 
(``FDA'') and must meet high purity standards. Table salt also has a 
highly consistent size across granules and contains agents to prevent 
clumping and evaporation. Without additional processing--which raises 
price considerably--rock salt and solar salt cannot meet the same 
purity requirements or achieve the same consistent granule size as 
table salt. Pharmaceutical-grade salt meets the purity requirements for 
table salt but does not contain the necessary agents to prevent 
clumping and evaporation. As such, rock salt, solar salt, and 
pharmaceutical-grade salt are not substitutes for table salt.
    24. In the United States, the packaging format strongly preferred 
by consumers for table salt is the round can, which is a 26-ounce 
cardboard cylinder with a paper label and a metal spout. The round-
can's size, shape, material, and metal spout make it an easy receptacle 
to use one-handed without spilling while cooking or refilling a salt 
shaker, which is a product characteristic that is highly valued by 
consumers. Reflecting consumer preference, retailers like grocery 
stores dedicate shelf space specifically to round-can packaging. As a 
result, approximately 95% of the table salt sold to consumers in the 
United States is sold in a round can.
    25. Table salt packaged in other containers, such as boxes or bags, 
is not a reasonable substitute for round-can table salt. Boxes without 
a metal spout and bags are more difficult to use and store and may 
spill once opened. Larger packages of table salt also are not 
reasonable substitutes for round-can table salt, as they contain 
significantly more salt than an individual can practically use.

[[Page 23984]]

    26. In the event of a small but significant increase in price by a 
hypothetical monopolist of round-can table salt, substitution away from 
round-can table salt would be insufficient to render the price increase 
unprofitable. Round-can table salt is therefore a line of commerce, or 
relevant product market, for purposes of analyzing the effects of the 
acquisition under Section 7 of the Clayton Act, 15 U.S.C. 18.
iii. Bulk Evaporated Salt
    27. Bulk evaporated salt is salt that is of sufficient purity to be 
used for human consumption that is sold in bulk form. Bulk evaporated 
salt is used to manufacture chemicals necessary to create essential 
everyday cleaning products such as disinfectants, soap, and bleach. 
Bulk evaporated salt is also an essential ingredient in nearly all 
processed pre-packaged foods, such as sauces, chips and other snacks, 
and frozen meals. Because bulk evaporated salt is incorporated into 
products end-consumers ingest or touch, it is regulated by the FDA and 
must meet stringent purity requirements.
    28. Customers for bulk evaporated salt include chemical companies 
and large pre-packaged food manufacturers as well as smaller customers, 
such as bakeries, that use salt as an essential ingredient in their 
food products. To accommodate these customers, many of whom purchase 
thousands of tons of salt per year, evaporated salt is sold in bulk, by 
the truckload or in containers ranging from 50-pound bags to 2,000-
pound ``super-sacks.''
    29. Bulk evaporated salt is distinct from evaporated salt used for 
other applications. Compared to other types of evaporated salt, it has 
unique end-uses, customers, and packaging. While pharmaceutical-grade 
salt and round-can table salt are of sufficient purity, they are priced 
too high and packaged in quantities that are too small to serve as 
substitutes for bulk evaporated salt. Bulk evaporated salt also is 
distinct from rock salt and solar salt, which have lower purity levels 
and non-uniform textures that make them unsuitable for chemical and 
food-production end uses. None of these types of salt can serve as a 
substitute to bulk evaporated salt.
    30. In the event of a small but significant increase in price by a 
hypothetical monopolist of bulk evaporated salt, substitution away from 
bulk evaporated salt would be insufficient to render the price increase 
unprofitable. Bulk evaporated salt is therefore a line of commerce, or 
relevant product market, for purposes of analyzing the effects of the 
acquisition under Section 7 of the Clayton Act, 15 U.S.C. 18.

B. Relevant Geographic Markets

i. Pharmaceutical-Grade Salt
    31. Pharmaceutical-grade salt is manufactured in only a few 
locations in the United States. From these locations, pharmaceutical-
grade salt is shipped to customers throughout the United States and 
Canada.
    32. While pharmaceutical-grade salt is shipped throughout the 
United States and Canada, shipping it from overseas is prohibitively 
expensive. This is because pharmaceutical-grade salt may not contain 
anti-caking agents. Without anti-caking agents, pharmaceutical-grade 
salt has a short shelf-life and may be damaged by the time and rigors 
of ocean-shipping. These limitations make ocean-shipping cost-
prohibitive.
    33. A hypothetical monopolist of pharmaceutical-grade salt in the 
United States and Canada could profitably impose a small but 
significant non-transitory increase in price for pharmaceutical-grade 
salt without losing sufficient sales to render the price increase 
unprofitable. Accordingly, the relevant geographic market for the 
purposes of analyzing the effects of the acquisition on pharmaceutical-
grade salt under Section 7 of the Clayton Act, 15 U.S.C. 18, is the 
United States and Canada.
ii. Round-Can Table Salt
    34. Competition among round-can table salt suppliers occurs at a 
national level. Retailers, many of which are grocery store chains, mass 
merchandisers, or convenience stores with large national footprints, 
purchase round-can table salt for all of their locations at once, and 
suppliers ship round-can table salt from coast to coast.
    35. Round-can table salt is not imported from outside the United 
States. In addition to being heavy--and therefore expensive to 
transport--table salt in other countries is typically sold in bags or 
cardboard boxes. As such, foreign suppliers of table salt typically 
lack the production facilities to produce round cans for the United 
States market.
    36. A hypothetical monopolist of round-can table salt in the United 
States could profitably impose a small but significant non-transitory 
increase in price for round-can table salt without losing sufficient 
sales to render the price increase unprofitable. Accordingly, the 
relevant geographic market for the purposes of analyzing the effects of 
the acquisition on round-can table salt under Section 7 of the Clayton 
Act, 15 U.S.C. 18, is the United States.
iii. Bulk Evaporated Salt
    37. Bulk evaporated salt is a product that can be produced at a 
relatively low cost, but it is heavy and therefore expensive to 
transport. As a result, customers purchase from nearby suppliers to 
minimize shipping costs that can be high relative to the value of the 
bulk evaporated salt being purchased.
    38. Both Morton and US Salt--along with only one other competitor--
operate bulk evaporated salt production facilities in upstate New York. 
All three companies use these facilities to service customers in the 
northeastern United States, including Connecticut, Delaware, Maine, 
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode 
Island, and Vermont. Customers in the northeastern United States can 
economically procure bulk evaporated salt from only these three 
locations. Other more distant bulk evaporated salt facilities cannot 
compete successfully on a regular basis for customers in the 
northeastern United States because the suppliers are too far away, 
making transportation costs too great.
    39. A hypothetical monopolist of bulk evaporated salt in the 
northeastern United States could profitably impose a small but 
significant non-transitory increase in price for bulk evaporated salt 
without losing sufficient sales to render the price increase 
unprofitable. Accordingly, the relevant geographic market for the 
purposes of analyzing the effects of the acquisition on bulk evaporated 
salt under Section 7 of the Clayton Act, 15 U.S.C. 18, is the 
northeastern United States.

V. Anticompetitive Effects

    40. The proposed transaction would lessen competition and harm 
customers for pharmaceutical-grade salt in the United States and 
Canada, round-can table salt in the United States, and bulk evaporated 
salt in the northeastern United States by eliminating the substantial 
head-to-head competition that currently exists between Morton and US 
Salt. Customers in each of these markets would pay higher prices and 
receive lower quality and service as a result of the acquisition.

A. Pharmaceutical-Grade Salt in the United States and Canada

    41. Morton and US Salt are the only two suppliers of 
pharmaceutical-grade salt in the United States and Canada, with Morton 
currently having a market share of around 77% and US Salt a share of 
around 23%. The acquisition would thus give the combined firm a 
monopoly in the sale of pharmaceutical-

[[Page 23985]]

grade salt in the United States and Canada, leaving pharmaceutical 
companies and other customers without a competitive alternative for 
this critical ingredient in dialysis fluid, intravenous saline 
solution, and other medical products.
    42. Morton and US Salt compete to sell pharmaceutical-grade salt on 
the basis of quality and surety of supply. This competition has 
resulted in higher quality, lower prices, and better customer service. 
The combination of Morton and US Salt would eliminate this competition 
and its future benefits to customers, including pharmaceutical 
companies. Post-acquisition, the combined Morton and US Salt likely 
would have the incentive and ability to increase prices and offer less 
favorable contractual terms.
    43. The proposed acquisition, therefore, likely would substantially 
lessen competition in the production of pharmaceutical-grade salt in 
the United States and Canada in violation of Section 7 of the Clayton 
Act, 15 U.S.C. 18.

B. Round-Can Table Salt in the United States

    44. Morton and US Salt are two of the largest table salt suppliers 
in the United States and are two of only three suppliers of round-can 
table salt in the United States. Morton is the largest supplier of 
branded round-can table salt in the United States. US Salt is the 
largest supplier of private-label round-can table salt--which is made 
by US Salt but sold under the brands of retailers and other third-
parties--in the United States. US Salt is also the second-largest 
supplier of branded round-can table salt, with around six percent of 
sales.
    45. Today, US Salt's private-label and branded round-can table salt 
products compete directly with Morton's branded round-can table salt. 
Together, the combined firm would control at least 90% of the round-can 
table salt market in the United States.
    46. The combination of Morton and US Salt would eliminate the head-
to-head competition between Morton and US Salt and leave customers in 
the United States with only two alternatives for round-can table salt 
in the United States. Post-acquisition, the combined firm likely would 
have the incentive and ability to increase prices and offer less 
favorable contractual terms.
    47. Morton and US Salt compete for sales of round-can table salt on 
the basis of quality, price, and contractual terms such as delivery 
times. This competition has resulted in higher quality, lower prices, 
and more reliable delivery. The combination of Morton and US Salt would 
eliminate this competition and its future benefits to customers, 
including grocery chains, big box stores, and discount stores.
    48. The proposed acquisition, therefore, likely would substantially 
lessen competition in the production of round-can table salt in the 
United States in violation of Section 7 of the Clayton Act, 15 U.S.C. 
18.

C. Bulk Evaporated Salt in the Northeastern United States

    49. Three bulk evaporated salt suppliers--Morton, US Salt, and one 
additional competitor, each with production facilities in upstate New 
York--compete for bulk evaporated salt customers in the northeastern 
United States. The combination of Morton and US Salt would eliminate 
the head-to-head competition between the parties and result in only two 
remaining competitors in the region.
    50. Bulk evaporated salt customers in the northeastern United 
States, including food processors and chemical manufacturers, have been 
able to secure lower prices and improved quality and service--such as 
more reliable delivery--by threatening to switch between Morton and US 
Salt. The elimination of this head-to-head competition would allow a 
combined Morton and US Salt to exercise market power to unilaterally 
increase prices and reduce the quality and service for bulk evaporated 
salt customers in the northeastern United States.
    51. The proposed acquisition, therefore, likely would substantially 
lessen competition in the production of bulk evaporated salt in the 
northeastern United States in violation of Section 7 of the Clayton 
Act, 15 U.S.C. 18.

VI. Entry

A. Difficulty of Entry Into Pharmaceutical-Grade Salt in the United 
States and Canada

    52. Entry of new competitors into pharmaceutical-grade salt in the 
United States would be difficult and time-consuming and is unlikely to 
prevent the harm to competition that is likely to result if the 
proposed transaction is consummated.
    53. A potential pharmaceutical-grade salt entrant would need to 
acquire suitable land that includes a salt deposit of sufficient 
purity, obtain the permits necessary to construct an evaporation and 
processing facility, possess or obtain appropriate financing for a 
significant capital expenditure, and then design, construct, and 
qualify the facility. This process would likely take several years, at 
a minimum. No new evaporated salt facility has been constructed in the 
United States in over 20 years.
    54. Even if an entrant was able to construct an evaporated salt 
production facility, before selling a single grain of pharmaceutical-
grade salt, it would need to install and test additional equipment 
needed to meet the exacting purity requirements for pharmaceutical-
grade salt. Reputational barriers make entry even more difficult, as 
customers would be reluctant to switch to an unproven supplier that 
could not guarantee access to high-quality pharmaceutical-grade salt. 
Thus, entry would not be timely, likely, or sufficient to mitigate the 
anticompetitive effects from SCIH's proposed acquisition of Morton.

B. Difficulty of Entry Into Round-Can Table Salt in the United States

    55. Entry of new competitors into round-can table salt in the 
United States would be difficult and time-consuming and is unlikely to 
prevent the anticompetitive effects that are likely to result if the 
proposed transaction is consummated.
    56. Even though table salt has lower purity requirements than 
pharmaceutical-grade salt, a round-can table salt entrant would still 
need to take all of the steps to construct a facility that a 
pharmaceutical-grade salt entrant would, including locating an 
appropriate salt deposit, and investing significant time and money to 
build the facility.
    57. In addition, an entrant in round-can table salt would have to 
secure a round-can packaging line. The packaging process for round-can 
table salt, created decades ago, is based on technology from that era 
and has proven to be difficult to replicate in a price-competitive 
manner. As a result, potential entrants with access to suitable salt 
deposits have tried, and failed, to develop round-can packaging 
technology in the last five years.
    58. Entry through the construction of a new round-can table salt 
facility therefore will not be timely, likely, or sufficient to 
mitigate the anticompetitive effects of SCIH's proposed acquisition of 
Morton.

C. Difficulty of Entry Into Bulk Evaporated Salt in the Northeastern 
United States

    59. Entry of new competitors into bulk evaporated salt in the 
northeastern United States would be difficult and time-consuming and is 
unlikely to prevent the harm to competition that is

[[Page 23986]]

likely to result if the proposed transaction is consummated.
    60. Just as with pharmaceutical-grade salt or round-can table salt, 
a new entrant in bulk evaporated salt would need to invest significant 
time and money to acquire land and construct an evaporated salt 
processing facility. Entry into bulk evaporated salt in the 
northeastern United States is particularly difficult because this area 
has limited salt deposits, which are necessary serve the market.
    61. Entry through the construction of a new bulk evaporated salt 
production facility will therefore not be timely, likely, or sufficient 
to mitigate the anticompetitive effects from SCIH's proposed 
acquisition of Morton.

VII. Violations Alleged

    62. SCIH's proposed acquisition of Morton is likely to 
substantially lessen competition in the production and sale of 
evaporated salt products, including pharmaceutical-grade salt in the 
United States and Canada, round-can table salt in the United States, 
and bulk evaporated salt in the northeastern United States, in 
violation of Section 7 of the Clayton Act, 15 U.S.C. 18.
    63. The acquisition will likely have the following anticompetitive 
effects, among others, in the relevant markets:
    a. Actual and potential competition between Morton and US Salt will 
be eliminated;
    b. competition generally will be substantially lessened; and
    c. prices will likely increase and quality and the level of service 
will likely decrease.

VIII. Request for Relief

    64. The United States requests that this Court:
    a. Adjudge and decree SCIH's acquisition of Morton to be unlawful 
and in violation of Section 7 of the Clayton Act, 15 U.S.C. 18;
    b. preliminarily and permanently enjoin Defendants and all persons 
acting on their behalf from consummating the proposed acquisition by 
SCIH of Morton or from entering into or carrying out any other 
contract, agreement, plan, or understanding, the effect of which would 
be to combine Morton with US Salt;
    c. award the United States the costs for this action; and
    d. grant the United States such other relief as the Court deems 
just and proper.

Dated: April 19, 2021
Respectfully submitted,
COUNSEL FOR PLAINTIFF UNITED STATES:

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RICHARD POWERS
Acting Assistant Attorney General Antitrust Division

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KATHLEEN S. O'NEILL
Senior Director of Investigation and Litigation, Antitrust Division

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KATRINA ROUSE
(D.C. Bar #1013035)
Chief, Defense, Industrials, and Aerospace Section, Antitrust 
Division

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JAY D. OWEN
Assistant Chief, Defense, Industrials, and Aerospace Section, 
Antitrust Division
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KERRIE J. FREEBORN *
(D.C. Bar #503143)
BINDI BHAGAT
JANET BRODY
GABRIELLA R. MOSKOWITZ
(D.C. Bar #1044309)
REBECCA VALENTINE
(D.C. Bar #989607)
Trial Attorneys

Defense, Industrials, and Aerospace Section, Antitrust Division
450 Fifth Street NW, Suite 8700
Washington, DC 20530
Telephone: (202) 476-9160
Facsimile: (202) 514-9033
Email: [email protected]

* LEAD ATTORNEY TO BE NOTICED

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, Plaintiff, v. STONE CANYON INDUSTRIES 
HOLDINGS LLC; SCIH SALT HOLDINGS INC; MORTON SALT, INC.; and K+S 
AKTIENGESELLSCHAFT, Defendants.

Civil Action No.: 1:21-cv-01067-TJK
Judge Timothy J. Kelly

Proposed Final Judgment

    Whereas, Plaintiff, United States of America, filed its Complaint 
on April 19, 2021;
    And whereas, the United States and Defendants, Stone Canyon 
Industries Holdings LLC (``Stone Canyon''); SCIH Salt Holdings Inc. 
(``SCIH''); Morton Salt, Inc. (``Morton''); and K+S Aktiengesellschaft 
(K+S AG''), have consented to entry of this Final Judgment without the 
taking of testimony, 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 relating to any issue of fact or law;
    And whereas, Defendants agree to make a divestiture to remedy the 
loss of competition alleged in the Complaint;
    And whereas, Defendants represent that the divestiture and other 
relief required by this Final Judgment can and will be made and that 
Defendants will not later raise a claim of hardship or difficulty as 
grounds for asking the Court to modify any provision of this Final 
Judgment;
    Now therefore, 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. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``Stone Canyon'' means Defendant Stone Canyon Industries 
Holdings LLC, a Delaware limited corporation with its headquarters in 
Los Angeles, California, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, including SCIH, 
partnerships, and joint ventures, and their directors, officers, 
managers, agents, and employees.
    B. ``SCIH'' means Defendant SCIH Salt Holdings Inc., an affiliate 
of Stone Canyon and a Delaware corporation with its headquarters in 
Overland Park, Kansas, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships, and joint 
ventures, and their directors, officers, managers, agents and 
employees.
    C. ``US Salt'' means US Salt LLC, a Delaware limited liability 
company with its headquarters in Overland Park, Kansas, its successors 
and assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships, and joint ventures, and their directors, officers, 
managers, agents, and employees. US Salt is an indirect, wholly-owned 
subsidiary of SCIH.
    D. ``K+S AG'' means Defendant K+S Aktiengesellschaft, a German 
company with its headquarters in Hesse, Germany, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships, and joint ventures, and their directors, officers, 
managers, agents, and employees.
    E. ``Morton'' means Defendant Morton Salt, Inc., a Delaware 
corporation with its headquarters in Chicago, Illinois, its successors 
and assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships, and joint ventures, and their directors, officers, 
managers, agents, and employees.
    F. ``Acquirer'' means the entity to which Defendants divest the 
Divestiture Assets.
    G. ``Divestiture Assets'' means all of Defendants' rights, titles, 
and interests in US Salt, including:

[[Page 23987]]

    1. The refinery and associated acreage located at 3580 Salt Point 
Road, Watkins Glen, NY 14891;
    2. the leased warehouse located at 224 N Main Street, Horseheads, 
NY 14845;
    3. all other real property, including fee simple interests and real 
property leasehold interests and renewal rights thereto, improvements 
to real property, and options to purchase any adjoining or other 
property, together with all buildings, facilities, and other 
structures;
    4. all tangible personal property, including fixed assets, 
machinery and manufacturing equipment, tools, vehicles, inventory, 
materials, office equipment and furniture, computer hardware, and 
supplies;
    5. all contracts, contractual rights, and customer relationships, 
and all other agreements, commitments, and understandings, including 
supply agreements, teaming agreements, and leases, and all outstanding 
offers or solicitations to enter into a similar arrangement;
    6. all licenses, permits, certifications, approvals, consents, 
registrations, waivers, and authorizations issued or granted by any 
governmental organization, and all pending applications or renewals;
    7. all records and data, including (a) customer lists, accounts, 
sales, and credits records, (b) production, repair, maintenance, and 
performance records, (c) manuals and technical information Defendants 
provide to their own employees, customers, suppliers, agents, or 
licensees, (d) records and research data concerning historic and 
current research and development activities, and (e) drawings, 
blueprints, and designs;
    8. all intellectual property owned, licensed, or sublicensed, 
either as licensor or licensee, including (a) patents, patent 
applications, and inventions and discoveries that may be patentable, 
(b) registered and unregistered copyrights and copyright applications, 
and (c) registered and unregistered trademarks, trade dress, service 
marks, trade names, and trademark applications; and
    9. all other intangible property, including (a) commercial names 
and d/b/a names, (b) technical information, (c) computer software and 
related documentation, know-how, trade secrets, design protocols, 
specifications for materials, specifications for parts, specifications 
for devices, safety procedures (e.g., for the handling of materials and 
substances), quality assurance and control procedures, and (d) rights 
in internet websites and internet domain names.
    Provided, however, that the assets specified in Paragraphs (G)(1)-
(9) above do not include (a) any trademarks, trade names, commercial 
names, doing business as (``d/b/a'') names, service marks, or service 
names containing the name ``Kissner'' or (b) the SCIH enterprise 
licenses for Adobe Acrobat, Atera, Microsoft Office 365, Mitel, Team 
Viewer, Ultipro, and Webroot.
    H. ``Divestiture Date'' means the date on which the Divestiture 
Assets are divested to Acquirer pursuant to this Final Judgment.
    I. ``Including'' means including but not limited to.
    J. ``Relevant Personnel'' means all full-time, part-time, or 
contract employees involved in the production or sale of evaporated 
salt, wherever located, for (1) US Salt, or (2) SCIH. Provided, 
however, that Relevant Personnel does not include (a) employees of SCIH 
engaged in human resources, legal, information technology, or other 
general or administrative support functions; or (b) any SCIH employee 
with the title Senior Vice President or higher.
    K. ``Transaction'' means the proposed acquisition of Morton by 
SCIH.

III. Applicability

    A. This Final Judgment applies to Stone Canyon, SCIH, Morton, and 
K+S AG, as defined above, and all other persons in active concert or 
participation with any Defendant who receive actual notice of this 
Final Judgment.
    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 business units that include the 
Divestiture Assets, Defendants must require any purchaser to be bound 
by the provisions of this Final Judgment. Defendants need not obtain 
such an agreement from Acquirer.

IV. Divestiture

    A. Defendants are ordered and directed, within 120 calendar days 
after the Court's entry of the Asset Preservation and 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 60 calendar days in total and will 
notify the Court of any extensions.
    B. Defendants must use best efforts to divest the Divestiture 
Assets as expeditiously as possible and may not take any action to 
impede the permitting, operation, or divestiture of the Divestiture 
Assets. Defendants must take no action that would jeopardize the 
divestiture ordered by the Court.
    C. Unless the United States otherwise consents in writing, 
divestiture pursuant to this Final Judgment must include the entire 
Divestiture Assets and must 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 production and sale of evaporated salt products and that the 
divestiture to Acquirer will remedy the competitive harm alleged in the 
Complaint.
    D. The divestiture must 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, 
to compete effectively in the production and sale of evaporated salt 
products.
    E. The divestiture must be accomplished in a manner that satisfies 
the United States, in its sole discretion, that none of the terms of 
any agreement between Acquirer and Defendants gives Defendants the 
ability unreasonably to raise Acquirer's costs, lower Acquirer's 
efficiency, or otherwise interfere in the ability of the Acquirer to 
compete effectively in the production and sale of evaporated salt 
products.
    F. In accomplishing the divestiture ordered by this Final Judgment, 
Defendants promptly must make known, by usual and customary means, the 
availability of the Divestiture Assets. Defendants must inform any 
person making an inquiry relating to a possible purchase of the 
Divestiture Assets that the Divestiture Assets are being divested in 
accordance with this Final Judgment and must provide that person with a 
copy of this Final Judgment. Defendants must offer to furnish to all 
prospective Acquirers, subject to customary confidentiality assurances, 
all information and documents relating to the Divestiture Assets that 
are customarily provided in a due-diligence process; provided, however, 
that Defendants need not provide information or documents subject to 
the attorney-client privilege or work-product doctrine. Defendants must 
make all information and documents available to the United States at 
the same time that the information and documents are made available to 
any other person.
    G. Defendants must provide prospective Acquirers with (1) access to 
make inspections of the Divestiture Assets; (2) access to all 
environmental,

[[Page 23988]]

zoning, and other permitting documents and information relating to the 
Divestiture Assets; and (3) access to all financial, operational, or 
other documents and information relating to the Divestiture Assets that 
customarily would be provided as part of a due-diligence process. 
Defendants also must disclose all encumbrances on any part of the 
Divestiture Assets, including on intangible property.
    H. Defendants must cooperate with and assist Acquirer in 
identifying and, at the option of Acquirer, hiring all Relevant 
Personnel, including:
    1. Within 10 business days following the filing of the Complaint in 
this matter, Defendants must identify all Relevant Personnel to 
Acquirer and the United States, including by providing organization 
charts covering all Relevant Personnel.
    2. Within 10 business days following receipt of a request by 
Acquirer or the United States, Defendants must provide to Acquirer and 
the United States additional information relating to Relevant 
Personnel, including name, job title, reporting relationships, past 
experience, responsibilities, training and educational histories, 
relevant certifications, and job performance evaluations. Defendants 
also must provide to Acquirer and the United States current and accrued 
compensation and benefits, including most recent bonuses paid, 
aggregate annual compensation, current target or guaranteed bonus any 
retention agreement or incentives, and any other payments due, 
compensation or benefit accrued, or promises made to the Relevant 
Personnel. If Defendants are barred by any applicable law from 
providing any of this information, Defendants must provide, within 10 
business days following receipt of the request, the requested 
information to the full extent permitted by law and also must provide a 
written explanation of Defendants' inability to provide the remaining 
information, including specifically identifying the provisions of the 
applicable laws.
    3. At the request of Acquirer, Defendants must promptly make 
Relevant Personnel available for private interviews with Acquirer 
during normal business hours at a mutually agreeable location.
    4. Defendants must not interfere with any effort by Acquirer to 
employ any Relevant Personnel. Interference includes offering to 
increase the compensation or improve the benefits of Relevant Personnel 
unless: (a) The offer is part of a company-wide increase in 
compensation or improvement in benefits that was announced prior to 
October 5, 2020; or (b) the offer is approved by the United States in 
its sole discretion. Defendants' obligations under this Paragraph will 
expire six months after the Divestiture Date.
    5. For Relevant Personnel who elect employment with Acquirer within 
six months of the Divestiture Date, Defendants must waive all non-
compete and non-disclosure agreements, vest all unvested pension and 
other equity rights that those Relevant Personnel have fully or 
partially accrued, provide any pay pro-rata, provide all other 
compensation and benefits that those Relevant Personnel have fully or 
partially accrued, and provide all other benefits that those Relevant 
Personnel otherwise would have been provided had the Relevant Personnel 
continued employment with Defendants, including any retention bonuses 
or payments. Defendants may maintain reasonable restrictions on 
disclosure by Relevant Personnel of Defendants' proprietary non-public 
information that is unrelated to the production and sale of evaporated 
salt products and not otherwise required to be disclosed by this Final 
Judgment.
    6. For a period of 12 months from the Divestiture Date, Defendants 
may not solicit to rehire Relevant Personnel who were hired by Acquirer 
within six months of the Divestiture Date unless (a) an individual is 
terminated or laid off by Acquirer or (b) Acquirer agrees in writing 
that Defendants may solicit to re-hire that individual. Nothing in this 
Paragraph prohibits Defendants from advertising employment openings 
using general solicitations or advertisements and rehiring Relevant 
Personnel who apply for an employment opening through a general 
solicitation or advertisement.
    I. Defendants must warrant to Acquirer that (1) the Divestiture 
Assets will be operational and without material defect on the date of 
their transfer to Acquirer; (2) there are no material defects in the 
environmental, zoning, or other permits relating to the operation of 
the Divestiture Assets; and (3) Defendants have disclosed all 
encumbrances on any part of the Divestiture Assets, including on 
intangible property. Following the sale of the Divestiture Assets, 
Defendants must not undertake, directly or indirectly, challenges to 
the environmental, zoning, or other permits relating to the operation 
of the Divestiture Assets.
    J. Defendants must assign, subcontract, or otherwise transfer all 
contracts, agreements, and relationships (or portions of such 
contracts, agreements, and relationships) included in the Divestiture 
Assets, including all supply and sales contracts, to Acquirer; 
provided, however, that for any contract or agreement that requires the 
consent of another party to assign, subcontract, or otherwise transfer, 
Defendants must use best efforts to accomplish the assignment, 
subcontracting, or transfer. Defendants must not interfere with any 
negotiations between Acquirer and a contracting party.
    K. Defendants must use best efforts to assist Acquirer to obtain 
all necessary licenses, registrations, and permits to operate the 
Divestiture Assets. Until Acquirer obtains the necessary licenses, 
registrations, and permits, Defendants must provide Acquirer with the 
benefit of Defendants' licenses, registrations, and permits to the full 
extent permissible by law.
    L. At the option of Acquirer, and subject to approval by the United 
States in its sole discretion, on or before the Divestiture Date, 
Defendants must enter into a contract to provide transition services 
for back office, human resource, and information technology services 
and support for US Salt for a period of up to 12 months on terms and 
conditions reasonably related to market conditions for the provision of 
the transition services. Any amendment to or modification of any 
provision of a contract for transition services is subject to approval 
by the United States, in its sole discretion. The United States, in its 
sole discretion, may approve one or more extensions of this contract 
for transition services, for a total of up to an additional six months. 
If Acquirer seeks an extension of the term of any contract for 
transition services, Defendants must notify the United States in 
writing at least three months prior to the date the contract expires. 
Acquirer may terminate a contract for transition services, or any 
portion of a contract for transition services, without cost or penalty 
at any time upon 30 days' written notice. The employee(s) of Defendants 
tasked with providing transition services must not share any 
competitively sensitive information of Acquirer with any other employee 
of Defendants.
    M. If any term of an agreement between Defendants and Acquirer, 
including an agreement to effectuate the divestiture required by this 
Final Judgment, varies from a term of this Final Judgment then, to the 
extent that Defendants cannot fully comply with both, this Final 
Judgment determines Defendants' obligations.

V. Appointment of Divestiture Trustee

    A. If Defendants have not divested the Divestiture Assets within 
the period specified in Paragraph IV.A, Defendants

[[Page 23989]]

must immediately notify the United States of that fact in writing. Upon 
application of the United States, which Defendants may not oppose, the 
Court will 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 by the Court, 
only the divestiture trustee will have the right to sell the 
Divestiture Assets. The divestiture trustee will have the power and 
authority to accomplish the divestiture to an Acquirer acceptable to 
the United States, in its sole discretion, at a price and on terms 
obtainable through reasonable effort by the divestiture trustee, 
subject to the provisions of Sections IV, V, and VI of this Final 
Judgment, and will have other powers as the Court deems appropriate. 
The divestiture trustee must sell the Divestiture Assets as quickly as 
possible.
    C. Defendants may not object to a sale by the divestiture trustee 
on any ground other than malfeasance by the divestiture trustee. 
Objections by Defendants must be conveyed in writing to the United 
States and the divestiture trustee within 10 calendar days after the 
divestiture trustee has provided the notice of proposed divestiture 
required by Section VI.
    D. The divestiture trustee will serve at the cost and expense of 
Defendants pursuant to a written agreement, on terms and conditions, 
including confidentiality requirements and conflict-of-interest 
certifications, that are approved by the United States, in its sole 
discretion.
    E. The divestiture trustee may hire at the cost and expense of 
Defendants any agents or consultants, including investment bankers, 
attorneys, and accountants, that are reasonably necessary in the 
divestiture trustee's judgment to assist with the divestiture trustee's 
duties. These agents or consultants will be accountable solely to the 
divestiture trustee and will serve on terms and conditions, including 
terms and conditions governing confidentiality requirements and 
conflict-of-interest certifications, approved by the United States in 
its sole discretion.
    F. The compensation of the divestiture trustee and agents or 
consultants hired by the divestiture trustee must 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. If the divestiture trustee and Defendants are unable 
to reach agreement on the divestiture trustee's compensation or other 
terms and conditions of engagement within 14 calendar days of the 
appointment of the divestiture trustee by the Court, the United States, 
in its sole discretion, may take appropriate action, including by 
making a recommendation to the Court. Within three business days of 
hiring an agent or consultant, the divestiture trustee must provide 
written notice of the hiring and rate of compensation to Defendants and 
the United States.
    G. The divestiture trustee must account for all monies derived from 
the sale of the assets sold by the divestiture trustee and all costs 
and expenses incurred. Within 30 calendar days of the date of the sale 
of the assets sold by the divestiture trustee, the divestiture trustee 
must submit that accounting to the Court for approval. After approval 
by the Court of the divestiture trustee's accounting, including fees 
for unpaid services and those of agents or consultants hired by the 
divestiture trustee, all remaining money must be paid to Stone Canyon 
or SCIH and the trust will then be terminated.
    H. Defendants must use best efforts to assist the divestiture 
trustee to accomplish the required divestiture. Subject to reasonable 
protection for trade secrets, other confidential research, development, 
or commercial information, or any applicable privileges, Defendants 
must provide the divestiture trustee and agents or consultants retained 
by the divestiture trustee with full and complete access to all 
personnel, books, records, and facilities of the Divestiture Assets. 
Defendants also must provide or develop financial and other information 
relevant to the Divestiture Assets that the divestiture trustee may 
reasonably request. Defendants must not take any action to interfere 
with or to impede the divestiture trustee's accomplishment of the 
divestiture.
    I. The divestiture trustee must maintain complete records of all 
efforts made to sell the Divestiture Assets, including by filing 
monthly reports with the United States setting forth the divestiture 
trustee's efforts to accomplish the divestiture ordered by this Final 
Judgment. The reports must 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 must describe in detail each 
contact.
    J. If the divestiture trustee has not accomplished the divestiture 
ordered by this Final Judgment within six 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 
for completing the divestiture. Following receipt of that report, the 
United States may make additional recommendations to the Court. The 
Court thereafter may enter such orders as it deems appropriate to carry 
out the purpose of this Final Judgment, which may include extending the 
trust and the term of the divestiture trustee's appointment by a period 
requested by the United States.
    K. The divestiture trustee will serve until divestiture of all 
Divestiture Assets is completed or for a term otherwise ordered by the 
Court.
    L. If the United States determines that the divestiture trustee is 
not acting diligently or in a reasonably cost-effective manner, the 
United States may recommend that the Court appoint a substitute 
divestiture trustee.

VI. Notice of Proposed Divestiture

    A. Within two business days following execution of a definitive 
agreement to divest the Divestiture Assets, Defendants or the 
divestiture trustee, whichever is then responsible for effecting the 
divestiture, must notify the United States of the proposed divestiture. 
If the divestiture trustee is responsible for completing the 
divestiture, the divestiture trustee also must notify Defendants. The 
notice must 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.
    B. Within 15 calendar days of receipt by the United States of the 
notice required by Paragraph VI.A, the United States may request from 
Defendants, the proposed Acquirer, other third parties, or the 
divestiture trustee additional information concerning the proposed 
divestiture, the proposed Acquirer, and other prospective Acquirers. 
Defendants and the divestiture trustee must furnish the additional 
information requested within 15 calendar days of the receipt of the 
request, unless the United States provides written agreement to a 
different period.

[[Page 23990]]

    C. Within 45 calendar days after receipt of the notice required by 
Paragraph VI.A or within 20 calendar days after the United States has 
been provided the additional information requested pursuant to 
Paragraph VI.B, whichever is later, the United States will provide 
written notice to Defendants and any divestiture trustee that states 
whether the United States, in its sole discretion, objects to the 
proposed Acquirer or any other aspect of the proposed divestiture. 
Without written notice that the United States does not object, a 
divestiture may not be consummated. 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. Upon objection by 
Defendants pursuant to Paragraph V.C, a divestiture by the divestiture 
trustee may not be consummated unless approved by the Court.
    D. No information or documents obtained pursuant to this Section VI 
may 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 
evaluating a proposed Acquirer or securing compliance with this Final 
Judgment, or as otherwise required by law.
    E. In the event of a request by a third party for disclosure of 
information under the Freedom of Information Act, 5 U.S.C. 552, the 
United States Department of Justice's Antitrust Division will act in 
accordance with that statute, and the Department of Justice regulations 
at 28 CFR part 16, including the provision on confidential commercial 
information, at 28 CFR 16.7. Persons submitting information to the 
Antitrust Division should designate the confidential commercial 
information portions of all applicable documents and information under 
28 CFR 16.7. Designations of confidentiality expire ten years after 
submission, ``unless the submitter requests and provides justification 
for a longer designation period.'' See 28 CFR 16.7(b).
    F. If at the time a person furnishes information or documents to 
the United States pursuant to this Section VI, that person represents 
and identifies in writing information or documents for which a claim of 
protection may be asserted under Rule 26(c)(1)(G) of the Federal Rules 
of Civil Procedure, and marks each pertinent page of such material, 
``Subject to claim of protection under Rule 26(c)(1)(G) of the Federal 
Rules of Civil Procedure,'' the United States must give that person ten 
calendar days' notice before divulging the material in any legal 
proceeding (other than a grand-jury proceeding).

VII. Financing

    Defendants may not finance all or any part of Acquirer's purchase 
of all or part of the Divestiture Assets.

VIII. Asset Preservation and Hold Separate

    Defendants must take all steps necessary to comply with the Asset 
Preservation and Hold Separate Stipulation and Order entered by the 
Court.

IX. Affidavits

    A. Within 20 calendar days of the filing of the Complaint in this 
matter, and every 30 calendar days thereafter until the divestiture 
required by this Final Judgment has been completed, each Defendant must 
deliver to the United States an affidavit signed by each Defendant's 
Chief Financial Officer and General Counsel, describing in reasonable 
detail the fact and manner of that Defendant's compliance with this 
Final Judgment. The United States, in its sole discretion, may approve 
different signatories for the affidavits.
    B. Each affidavit must include: (1) The name, address, and 
telephone number of each person who, during the preceding 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, an interest in the Divestiture Assets, and 
describe in detail each contact with such persons during that period; 
(2) 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; and (3) a 
description of any limitations placed by Defendants on information 
provided to prospective Acquirers. Objection by the United States to 
information provided by Defendants to prospective Acquirers must be 
made within 14 calendar days of receipt of the affidavit, except that 
the United States may object at any time if the information set forth 
in the affidavit is not true or complete.
    C. Defendants must keep all records of any efforts made to divest 
the Divestiture Assets until one year after the Divestiture Date.
    D. Within 20 calendar days of the filing of the Complaint in this 
matter, each Defendant must deliver to the United States an affidavit 
signed by each Defendant's Chief Financial Officer and General Counsel, 
describing in reasonable detail all actions that Defendants have taken 
and all steps that Defendants have implemented on an ongoing basis to 
comply with Section VIII of this Final Judgment. The United States, in 
its sole discretion, may approve different signatories for the 
affidavits.
    E. If a Defendant makes any changes to the actions and steps 
described in affidavits provided pursuant to Paragraph IX.D, the 
Defendant must, within 15 calendar days after any change is 
implemented, deliver to the United States an affidavit describing those 
changes.
    F. Defendants must keep all records of any efforts made to comply 
with Section VIII until one year after the divestiture has been 
completed.

X. Compliance Inspection

    A. For the purpose of determining or securing compliance with this 
Final Judgment or of related orders such as the Asset Preservation and 
Hold Separate Stipulation and Order, or of determining whether this 
Final Judgment should be modified or vacated, upon written request of 
an authorized representative of the Assistant Attorney General for the 
Antitrust Division, and reasonable notice to Defendants, Defendants 
must permit, from time to time and subject to legally recognized 
privileges, authorized representatives, including agents retained by 
the United States:
    1. To have 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, relating to any matters contained in this Final Judgment. The 
interviews must 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 for the Antitrust Division, Defendants must 
submit written reports or respond to written interrogatories, under 
oath if requested, relating to any matters contained in this Final 
Judgment.
    C. No information or documents obtained by the United States 
pursuant to this Section X may be divulged by the

[[Page 23991]]

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. In the event of a request by a third party for disclosure of 
information under the Freedom of Information Act, 5 U.S.C. 552, the 
Antitrust Division will act in accordance with that statute, and the 
Department of Justice regulations at 28 CFR part 16, including the 
provision on confidential commercial information, at 28 CFR 16.7. 
Defendants submitting information to the Antitrust Division should 
designate the confidential commercial information portions of all 
applicable documents and information under 28 CFR 16.7. Designations of 
confidentiality expire ten years after submission, ``unless the 
submitter requests and provides justification for a longer designation 
period.'' See 28 CFR 16.7(b).
    E. If at the time that Defendants furnish information or documents 
to the United States pursuant to this Section X, Defendants represent 
and identify in writing information or documents for 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,'' the United States must give 
Defendants 10 calendar days' notice before divulging the material in 
any legal proceeding (other than a grand jury proceeding).

XI. Firewalls

    A. For a period of two years following the filing of this Proposed 
Final Judgment, Stone Canyon and SCIH must implement and maintain 
procedures to prevent any employees of Stone Canyon and SCIH from 
sharing competitively sensitive information relating to US Salt with 
personnel with responsibilities relating to Morton's production or sale 
of evaporated salt products.
    B. Stone Canyon and SCIH, within 30 calendar days of the Court's 
entry of the Asset Preservation and Hold Separate Stipulation and 
Order, must submit to the United States a document setting forth in 
detail the procedures implemented to effect compliance with this 
Section XI. Upon receipt of the document, the United States will inform 
Stone Canyon and SCIH within 10 business days whether, in its sole 
discretion, the United States approves or rejects Stone Canyon and 
SCIH's compliance plan. Within 10 business days of receiving a notice 
of rejection, Stone Canyon and SCIH must submit a revised compliance 
plan. The United States may request that the Court determine whether 
Stone Canyon and SCIH's proposed compliance plan fulfills the 
requirements of Paragraph XI.A.

XII. Limitations on Reacquisition

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

XIII. 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.

XIV. 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 a civil contempt 
action, a motion to show cause, or a similar action brought by the 
United States relating to an alleged violation of this Final Judgment, 
the United States may establish a violation of this Final Judgment and 
the appropriateness of a 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 the 
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 an 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 that may be appropriate. In connection with 
a 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 all other costs including 
experts' fees, incurred in connection with that effort to enforce the 
Final Judgment, including in the investigation of the potential 
violation.
    D. For a period of four years following the expiration of this 
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; (2) all appropriate contempt 
remedies; (3) additional relief needed to ensure the Defendant complies 
with the terms of this Final Judgment; and (4) fees or expenses as 
called for by this Section XIV.

XV. Expiration of Final Judgment

    Unless the Court grants an extension, this Final Judgment will 
expire 10 years from the date of its entry, except that after five 
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 
divestiture has been completed and continuation of this Final Judgment 
no longer is necessary or in the public interest.

XVI. 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 by making available to the 
public copies of this Final Judgment, and the Competitive Impact 
Statement, public comments thereon, and any response to comments by the 
United States. Based upon the record before the Court, which includes 
the Competitive Impact Statement and, if applicable, 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]

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

[[Page 23992]]

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, Plaintiff, v. STONE CANYON INDUSTRIES 
HOLDINGS LLC; SCIH SALT HOLDINGS INC; MORTON SALT, INC.; and K+S 
AKTIENGESELLSCHAFT, Defendants.

Civil Action No.: 1:21-cv-01067-TJK
Judge Timothy J. Kelly

Competitive Impact Statement

    In accordance with the Antitrust Procedures and Penalties Act, 15 
U.S.C. 16 (the ``APPA'' or ``Tunney Act''), the United States of 
America files this Competitive Impact Statement related to the proposed 
Final Judgment filed in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    On October 5, 2020, Stone Canyon Industry Holdings LLC (``Stone 
Canyon'') and its portfolio company SCIH Salt Holdings Inc. (``SCIH'') 
agreed to acquire the K+S Aktiengesellschaft (``K+S AG'') Operating 
Unit Salt Americas business, a bundle of several subsidiaries including 
Morton Salt, Inc. (``Morton''). The United States filed a civil 
antitrust Complaint on April 19, 2021, seeking to enjoin the proposed 
acquisition. The Complaint alleges that the likely effect of this 
acquisition would be to substantially lessen competition in the 
production and sale of evaporated salt products, including 
pharmaceutical-grade salt in the United States and Canada, ``round-
can'' table salt in the United States, and bulk evaporated salt in the 
northeastern United States, 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 
proposed Final Judgment and an Asset Preservation and Hold Separate 
Stipulation and Order (``Stipulation and Order''), which are designed 
to remedy the loss of competition alleged in the Complaint.
    Under the proposed Final Judgment, which is explained more fully 
below, Defendants are required to divest SCIH's subsidiary, US Salt LLC 
(``US Salt'').
    Under the terms of the Stipulation and Order, Defendants must take 
certain steps to ensure that US Salt is operated as a competitively 
independent, economically viable, and ongoing business concern, which 
must remain independent and uninfluenced by Defendants, and that 
competition is maintained during the pendency of the required 
divestiture. On April 22, 2021, the Court entered the Stipulation and 
Order.
    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 and the Proposed Transaction

    Stone Canyon is an industrial holding company incorporated in 
Delaware and headquartered in Los Angeles, California. Stone Canyon 
acquired Kissner Group Holdings LP, which it later renamed SCIH, in 
April 2020.
    SCIH is a subsidiary of Stone Canyon and is headquartered in 
Overland Park, Kansas. In 2020, SCIH had revenues of approximately $1 
billion. SCIH is a leading supplier of salt products, including 
evaporated salt products.
    K+S AG is a chemical company headquartered in Kassel, Germany. In 
2020, K+S AG reported revenues of approximately $4.4 billion. K+S AG's 
Operating Unit Salt Americas business includes Morton as well as K+S 
Windsor Salt, which sells salt products in Canada, and Sociedad Punta 
de Lobos, which sells salt products in Chile.
    Morton is a K+S AG subsidiary with approximately $1 billion in 
revenue in 2020. Morton is the largest supplier of pharmaceutical-grade 
salt in the United States and Canada, the largest supplier of ``round-
can'' table salt in the United States, and one of only three suppliers 
of bulk evaporated salt in the northeastern United States.
    Pursuant to a Transaction Agreement dated October 5, 2020, SCIH 
agreed to acquire K+S AG's Operating Unit Salt Americas business, 
including Morton, for approximately $3.2 billion.

B. Relevant Product Markets

    Morton and SCIH's US Salt subsidiary both produce and sell 
evaporated salt. Evaporated salt is a type of sodium chloride produced 
through ``vacuum evaporation.'' In the vacuum evaporation process, 
water is pumped into a salt deposit where the salt dissolves, and the 
resulting brine is forced into an evaporator on the surface where it is 
boiled in a series of pans until only the salt remains. Evaporated salt 
is nearly 100% sodium chloride and contains almost no other trace 
minerals. Because of the evaporation process, individual grains of 
evaporated salt are also more consistent and regularly shaped than 
other forms of salt.
    Evaporated salt is distinct from salt created through other 
production methods, such as rock salt and solar salt. Rock salt is 
mined and then crushed into smaller sizes before being transported to 
the surface. Rock salt is less expensive to produce than evaporated 
salt, but it is also coarser, irregularly shaped, and contains other 
minerals and impurities. As a result, rock salt is used for 
applications that have less demanding quality requirements such as de-
icing roads. Solar salt is created when salt water is captured in 
shallow ponds where the sun evaporates most of the water. It can only 
be produced in warm climates where the evaporation rate exceeds the 
precipitation rate. Solar salt is less pure and not as uniform in shape 
as evaporated salt, but it is purer than rock salt. Solar salt is used 
for applications such as water softening.
    Evaporated salt typically is used in applications that require the 
highest quality of salt, such as human consumption. There are different 
types of evaporated salt that have different characteristics, end uses, 
and customers. As alleged in the Complaint, three types of evaporated 
salt produced by Defendants constitute relevant product markets--
pharmaceutical-grade salt, round-can table salt, and bulk evaporated 
salt.
i. Pharmaceutical-Grade Salt
    Pharmaceutical-grade salt is the grade of salt with the highest 
percentage of sodium chloride and thus is the purest grade of 
evaporated salt. Pharmaceutical-grade salt is used in the 
pharmaceutical industry as a building block for a number of life-saving 
treatments and products, including dialysis fluid, intravenous saline 
solution, and other medical products. Pharmaceutical-grade salt must be 
evaporated from salt deposits of extremely high purity and then undergo 
post-production processing to ensure that it contains virtually no 
trace minerals or other impurities.
    Because of these stringent standards, the mining and production 
process for pharmaceutical-grade salt must be extensively monitored and 
documented to ensure purity and consistency across production batches. 
This documentation must then be provided to customers as a validation 
of the quality and purity of the pharmaceutical-grade salt.
    Rock salt and solar salt do not meet the purity requirements for 
pharmaceutical-grade salt. Other grades of evaporated salt--for 
example, salt used in food processing--also cannot serve as a 
substitute for pharmaceutical-grade salt. Pharmaceutical-grade salt 
must contain a higher percentage of sodium chloride than other types of

[[Page 23993]]

evaporated salt. This ensures that it does not contain trace minerals 
that would impact the efficacy of pharmaceutical products made using 
pharmaceutical-grade salt. Pharmaceutical-grade salt also cannot 
contain additives such as anti-caking agents that are added during the 
processing of other types of evaporated salt. Because of these 
requirements, pharmaceutical-grade salt is more difficult to produce 
than other forms of evaporated salt.
    The Complaint alleges that, in the event of a small but significant 
increase in price by a hypothetical monopolist of pharmaceutical-grade 
salt, substitution away from pharmaceutical-grade salt would be 
insufficient to render the price increase unprofitable. Pharmaceutical-
grade salt is therefore a line of commerce, or relevant product market, 
for purposes of analyzing the effects of the acquisition under Section 
7 of the Clayton Act, 15 U.S.C. 18.
ii. Round-Can Table Salt
    Table salt is evaporated salt that is processed for human 
consumption. It is regulated by the Food and Drug Administration 
(``FDA'') and must meet high purity standards. Table salt also has a 
highly consistent size across granules and contains agents to prevent 
clumping and evaporation. Without additional processing--which raises 
price considerably--rock salt and solar salt cannot meet the same 
purity requirements or achieve the same consistent granule size as 
table salt. Pharmaceutical-grade salt meets the purity requirements for 
table salt but does not contain the necessary agents to prevent 
clumping and evaporation. As such, rock salt, solar salt, and 
pharmaceutical-grade salt are not substitutes for table salt.
    In the United States, the packaging format strongly preferred by 
consumers for table salt is the round can, which is a 26-ounce 
cardboard cylinder with a paper label and a metal spout. The round-
can's size, shape, material, and metal spout make it an easy receptacle 
to use one-handed without spilling while cooking or refilling a salt 
shaker, which is a product characteristic that is highly valued by 
consumers. Reflecting consumer preference, retailers like grocery 
stores dedicate shelf space specifically to round-can packaging. As a 
result, approximately 95% of the table salt sold to consumers in the 
United States is sold in a round can.
    Table salt packaged in other containers, such as boxes or bags, is 
not a reasonable substitute for round-can table salt. Boxes without a 
metal spout and bags are more difficult to use and store and may spill 
once opened. Larger packages of table salt also are not reasonable 
substitutes for round-can table salt, as they contain significantly 
more salt than an individual can practically use.
    The Complaint alleges that, in the event of a small but significant 
increase in price by a hypothetical monopolist of round-can table salt, 
substitution away from round-can table salt would be insufficient to 
render the price increase unprofitable. Round-can table salt is 
therefore a line of commerce, or relevant product market, for purposes 
of analyzing the effects of the acquisition under Section 7 of the 
Clayton Act, 15 U.S.C. 18.
iii. Bulk Evaporated Salt
    Bulk evaporated salt is salt that is of sufficient purity to be 
used for human consumption that is sold in bulk form. Bulk evaporated 
salt is used to manufacture chemicals necessary to create essential 
everyday cleaning products such as disinfectants, soap, and bleach. 
Bulk evaporated salt is also an essential ingredient in nearly all 
processed pre-packaged foods, such as sauces, chips and other snacks, 
and frozen meals. Because bulk evaporated salt is incorporated into 
products end-consumers ingest or touch, it is regulated by the FDA and 
must meet stringent purity requirements.
    Customers for bulk evaporated salt include chemical companies and 
large pre-packaged food manufacturers as well as smaller customers, 
such as bakeries, that use salt as an essential ingredient in their 
food products. To accommodate these customers, many of whom purchase 
thousands of tons of salt per year, evaporated salt is sold in bulk, by 
the truckload or in containers ranging from 50-pound bags to 2,000-
pound ``super-sacks.''
    Bulk evaporated salt is distinct from evaporated salt used for 
other applications. Compared to other types of evaporated salt, it has 
unique end-uses, customers, and packaging. While pharmaceutical-grade 
salt and round-can table salt are of sufficient purity, they are priced 
too high and packaged in quantities that are too small to serve as 
substitutes for bulk evaporated salt. Bulk evaporated salt also is 
distinct from rock salt and solar salt, which have lower purity levels 
and non-uniform textures that make them unsuitable for chemical and 
food-production end uses. None of these types of salt can serve as a 
substitute to bulk evaporated salt.
    The Complaint alleges that, in the event of a small but significant 
increase in price by a hypothetical monopolist of bulk evaporated salt, 
substitution away from bulk evaporated salt would be insufficient to 
render the price increase unprofitable. Bulk evaporated salt is 
therefore a line of commerce, or relevant product market, for purposes 
of analyzing the effects of the acquisition under Section 7 of the 
Clayton Act.

C. Relevant Geographic Markets

i. Pharmaceutical-Grade Salt
    Pharmaceutical-grade salt is manufactured in only a few locations 
in the United States. From these locations, pharmaceutical-grade salt 
is shipped to customers throughout the United States and Canada.
    While pharmaceutical-grade salt is shipped throughout the United 
States and Canada, shipping it from overseas is prohibitively 
expensive. This is because pharmaceutical-grade salt may not contain 
anti-caking agents. Without anti-caking agents, pharmaceutical-grade 
salt has a short shelf-life and may be damaged by the time and rigors 
of ocean-shipping. These limitations make ocean-shipping cost-
prohibitive.
    The Complaint alleges that a hypothetical monopolist of 
pharmaceutical-grade salt in the United States and Canada could 
profitably impose a small but significant non-transitory increase in 
price for pharmaceutical-grade salt without losing sufficient sales to 
render the price increase unprofitable. Accordingly, the Complaint 
alleges that the relevant geographic market for the purposes of 
analyzing the effects of the acquisition on pharmaceutical-grade salt 
under Section 7 of the Clayton Act, 15 U.S.C. 18 is the United States 
and Canada.
ii. Round-Can Table Salt
    Competition among round-can table salt suppliers occurs at a 
national level. Retailers, many of which are grocery store chains, mass 
merchandisers, or convenience stores with large national footprints, 
purchase round-can table salt for all of their locations at once, and 
suppliers ship round-can table salt from coast to coast.
    Round-can table salt is not imported from outside the United 
States. In addition to being heavy--and therefore expensive to 
transport--table salt in other countries is typically sold in bags or 
cardboard boxes. As such, foreign suppliers of table salt typically 
lack the production facilities to produce round cans for the United 
States market.
    The Complaint alleges that a hypothetical monopolist of round-can 
table salt in the United States could profitably impose a small but 
significant non-transitory increase in price for round-can table salt 
without losing

[[Page 23994]]

sufficient sales to render the price increase unprofitable. 
Accordingly, the Complaint alleges that the relevant geographic market 
for the purposes of analyzing the effects of the acquisition on round-
can table salt under Section 7 of the Clayton Act, 15 U.S.C. 18 is the 
United States.
iii. Bulk Evaporated Salt
    Bulk evaporated salt is a product that can be produced at a 
relatively low cost, but it is heavy and therefore expensive to 
transport. As a result, customers purchase from nearby suppliers to 
minimize shipping costs that can be high relative to the value of the 
bulk evaporated salt being purchased.
    Both Morton and US Salt--along with only one other competitor--
operate bulk evaporated salt production facilities in upstate New York. 
All three companies use these facilities to service customers in the 
northeastern United States, including Connecticut, Delaware, Maine, 
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode 
Island, and Vermont. Customers in the northeastern United States can 
economically procure bulk evaporated salt from only these three 
locations. Other more distant bulk evaporated salt facilities cannot 
compete successfully on a regular basis for customers in the 
northeastern United States because the suppliers are too far away, 
making transportation costs too great.
    The Complaint alleges that a hypothetical monopolist of bulk 
evaporated salt in the northeastern United States could profitably 
impose a small but significant non-transitory increase in price for 
bulk evaporated salt without losing sufficient sales to render the 
price increase unprofitable. Accordingly, the Complaint alleges that 
the relevant geographic market for the purposes of analyzing the 
effects of the acquisition on bulk evaporated salt under Section 7 of 
the Clayton Act, 15 U.S.C. 18 is the northeastern United States.

D. Anticompetitive Effects of the Proposed Transaction

    The Complaint alleges that the proposed transaction would lessen 
competition and harm customers for pharmaceutical-grade salt in the 
United States and Canada, round-can table salt in the United States, 
and bulk evaporated salt in the northeastern United States by 
eliminating the substantial head-to-head competition that currently 
exists between Morton and US Salt. The Complaint further alleges that 
customers in each of these markets would pay higher prices and receive 
lower quality and service as a result of the acquisition.
i. Pharmaceutical-Grade Salt in the United States and Canada
    As described in the Complaint, Morton and US Salt are the only two 
suppliers of pharmaceutical-grade salt in the United States and Canada, 
with Morton currently having a market share of around 77% and US Salt a 
share of around 23%. The acquisition would thus give the combined firm 
a monopoly in the sale of pharmaceutical-grade salt in the United 
States and Canada, leaving pharmaceutical companies and other customers 
without a competitive alternative for this critical ingredient in 
dialysis fluid, intravenous saline solution, and other medical 
products.
    The Complaint alleges that Morton and US Salt compete to sell 
pharmaceutical-grade salt on the basis of quality and surety of supply. 
This competition has resulted in higher quality, lower prices, and 
better customer service. The combination of Morton and US Salt would 
eliminate this competition and its future benefits to customers, 
including pharmaceutical companies. Post-acquisition, the combined 
Morton and US Salt likely would have the incentive and ability to 
increase prices and offer less favorable contractual terms.
    As alleged in the Complaint, the proposed acquisition, therefore, 
likely would substantially lessen competition in the production of 
pharmaceutical-grade salt in the United States and Canada in violation 
of Section 7 of the Clayton Act, 15 U.S.C. 18.
ii. Round-Can Table Salt in the United States
    As described in the Complaint, Morton and US Salt are two of the 
largest table salt suppliers in the United States and are two of only 
three suppliers of round-can table salt in the United States. Morton is 
the largest supplier of branded round-can table salt in the United 
States. US Salt is the largest supplier of private-label round-can 
table salt--which is made by US Salt but sold under the brands of 
retailers and other third-parties--in the United States. US Salt is 
also the second-largest supplier of branded round-can table salt, with 
around six percent of sales.
    The Complaint alleges that, today, US Salt's private-label and 
branded round-can table salt products compete directly with Morton's 
branded round-can table salt. Together, the combined firm would control 
at least 90% of the round-can table salt market in the United States.
    The Complaint further alleges that the combination of Morton and US 
Salt would eliminate the head-to-head competition between Morton and US 
Salt and leave customers in the United States with only two 
alternatives for round-can table salt in the United States. Post-
acquisition, the combined firm likely would have the incentive and 
ability to increase prices and offer less favorable contractual terms.
    The Complaint also alleges that Morton and US Salt compete for 
sales of round-can table salt on the basis of quality, price, and 
contractual terms such as delivery times. This competition has resulted 
in higher quality, lower prices, and more reliable delivery. The 
combination of Morton and US Salt would eliminate this competition and 
its future benefits to customers, including grocery chains, big box 
stores, and discount stores.
    As alleged in the Complaint, the proposed acquisition, therefore, 
likely would substantially lessen competition in the production of 
round-can table salt in the United States in violation of Section 7 of 
the Clayton Act, 15 U.S.C. 18.
iii. Bulk Evaporated Salt in the Northeastern United States
    As described in the Complaint, three bulk evaporated salt 
suppliers--Morton, US Salt, and one additional competitor, each with 
production facilities in upstate New York--compete for bulk evaporated 
salt customers in the northeastern United States. The combination of 
Morton and US Salt would eliminate the head-to-head competition between 
the parties and result in only two remaining competitors in the region.
    The Complaint alleges that bulk evaporated salt customers in the 
northeastern United States, including food processors and chemical 
manufacturers, have been able to secure lower prices and improved 
quality and service--such as more reliable delivery--by threatening to 
switch between Morton and US Salt. The elimination of this head-to-head 
competition would allow a combined Morton and US Salt to exercise 
market power to unilaterally increase prices and reduce the quality and 
service for bulk evaporated salt customers in the northeastern United 
States.
    As alleged in the Complaint, the proposed acquisition, therefore, 
likely would substantially lessen competition in the production of bulk 
evaporated salt in the northeastern United States in violation of 
Section 7 of the Clayton Act, 15 U.S.C. 18.

[[Page 23995]]

E. Difficulty of Entry

i. Difficulty of Entry Into Pharmaceutical-Grade Salt in the United 
States and Canada
    As alleged in the Complaint, entry of new competitors into 
pharmaceutical-grade salt in the United States would be difficult and 
time-consuming and is unlikely to prevent the harm to competition that 
is likely to result if the proposed transaction is consummated.
    The Complaint alleges that potential pharmaceutical-grade salt 
entrant would need to acquire suitable land that includes a salt 
deposit of sufficient purity, obtain the permits necessary to construct 
an evaporation and processing facility, possess or obtain appropriate 
financing for a significant capital expenditure, and then design, 
construct, and qualify the facility. This process would likely take 
several years, at a minimum. No new evaporated salt facility has been 
constructed in the United States in over 20 years.
    The Complaint alleges that, even if an entrant were able to 
construct an evaporated salt production facility, before selling a 
single grain of pharmaceutical-grade salt, it would need to install and 
test additional equipment needed to meet the exacting purity 
requirements for pharmaceutical-grade salt. Reputational barriers make 
entry even more difficult, as customers would be reluctant to switch to 
an unproven supplier that could not guarantee access to high-quality 
pharmaceutical-grade salt. Thus, as alleged in the Complaint, entry 
would not be timely, likely, or sufficient to mitigate the 
anticompetitive effects from SCIH's proposed acquisition of Morton.
ii. Difficulty of Entry Into Round-Can Table Salt in the United States
    As alleged in the Complaint, entry of new competitors into round-
can table salt in the United States would be difficult and time-
consuming and is unlikely to prevent the anticompetitive effects that 
are likely to result if the proposed transaction is consummated.
    The Complaint alleged that, even though table salt has lower purity 
requirements than pharmaceutical-grade salt, a round-can table salt 
entrant would still need to take all of the steps to construct a 
facility that a pharmaceutical-grade salt entrant would, including 
locating an appropriate salt deposit, and investing significant time 
and money to build the facility.
    The Complaint alleges that, in addition, an entrant in round-can 
table salt would have to secure a round-can packaging line. The 
packaging process for round-can table salt, created decades ago, is 
based on technology from that era and has proven to be difficult to 
replicate in a price-competitive manner. As a result, potential 
entrants with access to suitable salt deposits have tried, and failed, 
to develop round-can packaging technology in the last five years.
    Thus, as alleged in the Complaint, entry through the construction 
of a new round-can table salt facility therefore will not be timely, 
likely, or sufficient to mitigate the anticompetitive effects of SCIH's 
proposed acquisition of Morton.
iii. Difficulty of Entry Into Bulk Evaporated Salt in the Northeastern 
United States
    As alleged in the Complaint, entry of new competitors into bulk 
evaporated salt in the northeastern United States would be difficult 
and time-consuming and is unlikely to prevent the harm to competition 
that is likely to result if the proposed transaction is consummated.
    The Complaint alleges that, just as with pharmaceutical-grade salt 
or round-can table salt, a new entrant in bulk evaporated salt would 
need to invest significant time and money to acquire land and construct 
an evaporated salt processing facility. The Complaint further alleges 
that entry into bulk evaporated salt in the northeastern United States 
is particularly difficult because this area has limited salt deposits, 
which are necessary serve the market.
    As alleged in the Complaint, entry through the construction of a 
new bulk evaporated salt production facility will therefore not be 
timely, likely, or sufficient to mitigate the anticompetitive effects 
from SCIH's proposed acquisition of Morton.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment requires Stone Canyon and its 
subsidiary, SCIH, to divest their entire evaporated salt business, US 
Salt, to proceed with their proposed acquisition of Morton. This 
divestiture allows a third-party buyer to step in as the owner of US 
Salt and use all of those assets to compete for the production and sale 
of pharmaceutical-grade salt in the United States and Canada, round-can 
table salt in the United States, and bulk evaporated salt in the 
northeastern United States. The proposed divestiture will thus 
establish an independent and economically viable competitor that will 
ensure competition in these markets going forward.
    Paragraph IV(A) of the proposed Final Judgment requires Defendants, 
within 120 calendar days after the entry of the Stipulation and Order 
by the Court, to divest the Divestiture Assets to an Acquirer 
acceptable to the United States, in its sole discretion. The assets 
must be divested 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 in the production 
and sale of evaporated salt products so that the Acquirer can compete 
effectively in the market for pharmaceutical-grade salt in the United 
States and Canada, round-can table salt in the United States, and bulk 
evaporated salt in the northeastern United States. Defendants must use 
best efforts to accomplish the divestiture of the Divestiture Assets 
quickly and must take no action to jeopardize the divestiture.
    The Divestiture Assets include all of Defendants' rights, titles, 
and interests in US Salt, including two US Salt facilities (a refinery 
located in Watkins Glen, NY and a warehouse located in Horseheads, NY).
    The proposed Final Judgment contains provisions intended to 
facilitate efforts by the Acquirer to hire certain employees. 
Specifically, Paragraph IV(H) of the proposed Final Judgment requires 
Defendants to provide the Acquirer and the United States with 
organization charts and information relating to these employees and to 
make them available for interviews. It also provides that Defendants 
must not interfere with any efforts by the Acquirer to hire these 
employees. In addition, for employees who elect employment with the 
Acquirer, Defendants must waive all non-compete and non-disclosure 
agreements, vest all unvested pension and other equity rights, provide 
any pay pro-rata, provide all other compensation and benefits that 
those employees have fully or partially accrued, and provide all other 
benefits that those employees otherwise would have been provided had 
those employees continued employment with Defendants, including any 
retention bonuses or payments.
    Paragraph IV(H) further provides that Defendants may not solicit to 
hire any employees who elect employment with the Acquirer within a 
certain time after the divestiture is completed, unless an individual 
is terminated or laid off by the Acquirer or the Acquirer agrees in 
writing that Defendants may solicit or hire that individual. The non-
solicitation period runs for 12 months from the date of the 
divestiture. Paragraph IV(H) does not prohibit Defendants from 
advertising employment openings using general

[[Page 23996]]

solicitations or advertisements and rehiring employees who apply for a 
position through a general solicitation or advertisement.
    Paragraph IV(J) of the proposed Final Judgment will facilitate the 
transfer of customers and other contractual relationships from 
Defendants to the Acquirer. Defendants must transfer all contracts, 
agreements, and relationships to the Acquirer and must use best efforts 
to assign, subcontract, or otherwise transfer contracts or agreements 
that require the consent of another party before assignment, 
subcontracting, or other transfer.
    The proposed Final Judgment contains provisions to ensure that the 
Acquirer will be able to operate US Salt and serve customers 
immediately upon completion of the divestiture. For example, Paragraph 
IV(L) of the proposed Final Judgment requires Defendants, at the 
Acquirer's option, to enter into a transition services agreement for 
back office, human resource, and information technology services and 
support for US Salt for a period of up to 12 months. The Acquirer may 
terminate the transition services agreement, or any portion of it, 
without cost or penalty at any time upon 30 days' written notice. 
Paragraph IV(L) further provides that the United States, in its sole 
discretion, may approve one or more extensions of the transition 
services agreement for a total of up to an additional six months and 
that any amendments to or modifications of any provisions of a 
transition services agreement between Defendants and Acquirer are 
subject to approval by the United States, in its sole discretion. 
Paragraph IV(L) also provides that employees of Defendants tasked with 
providing any transition services must not share any competitively 
sensitive information of the Acquirer with any other employee of 
Defendants.
    Paragraph IV(K) requires Defendants to use best efforts to assist 
the Acquirer to obtain all necessary licenses, registrations, and 
permits to operate US Salt. Defendants must provide Acquirer with the 
benefit of Defendants' licenses, registrations, and permits until 
Acquirer obtains the necessary licenses, registrations, and permits,
    Certain executives and employees of Stone Canyon and/or SCIH, who 
will remain with Stone Canyon and/or SCIH after the divestiture, have 
had access to competitively sensitive information about US Salt's 
business operations. In order to prevent Stone Canyon and SCIH from 
using that information, Paragraph XI(A) requires Stone Canyon and SCIH 
to implement a firewall. Specifically, Stone Canyon and SCIH must 
implement and maintain reasonable procedures to prevent the sharing of 
competitively sensitive information relating to US Salt with 
Defendants' personnel with responsibilities relating to Morton's 
production or sale of evaporated salt products. Such a firewall will 
prevent competitively sensitive information about US Salt--to which 
Stone Canyon will have had access prior to the divestiture--from being 
used to influence business decisions relating to Morton's production or 
sale of evaporated salt products or otherwise used to subvert 
competition. The implementation of these procedures for a two-year 
period will ensure that the information cannot be used while it is 
still competitively sensitive. After two years, any information will be 
sufficiently out of date to no longer pose a risk and the firewall can 
be eliminated. Under Paragraph XI(B), Stone Canyon and SCIH must, 
within 30 days of the entry of the Stipulation and Order, submit a 
document setting forth in detail the procedures Defendants have 
implemented to effect compliance with Section XI. The United States 
will determine, in its sole discretion, whether to approve or reject 
Stone Canyon and SCIH's proposed compliance plan.
    If Defendants do not accomplish the divestiture within the period 
prescribed in Paragraph IV(A) of the proposed Final Judgment, Section V 
of the proposed Final Judgment provides that the Court will appoint a 
divestiture trustee selected by the United States to effect the 
divestiture. If a divestiture trustee is appointed, the proposed Final 
Judgment provides that Defendants must pay all costs and expenses of 
the trustee. The divestiture trustee's compensation must be structured 
so as to provide an incentive for the trustee based on the price and 
terms obtained and the speed with which the divestiture is 
accomplished. After the divestiture trustee's appointment becomes 
effective, the trustee must provide monthly reports to the United 
States setting forth his or her efforts to accomplish the divestiture. 
If the divestiture has not been accomplished within six months of the 
divestiture trustee's appointment, the United States may make 
recommendations to the Court, which will enter such orders as 
appropriate, in order to carry out the purpose of the proposed Final 
Judgment, including by extending the trust or the term of the 
divestiture trustee's appointment by a period requested by the United 
States.
    The proposed Final Judgment also contains provisions designed to 
promote compliance with and make enforcement of the Final Judgment as 
effective as possible. Paragraph XIV(A) provides that the United States 
retains and reserves all rights to enforce the Final Judgment, 
including the right 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 
with the Final Judgment with the standard of proof that applies to the 
underlying offense that the Final Judgment addresses.
    Paragraph XIV(B) provides additional clarification regarding the 
interpretation of the provisions of the proposed Final Judgment. The 
proposed Final Judgment is intended to remedy the loss of competition 
the United States alleges would otherwise be harmed by the transaction. 
Defendants agree that they will abide by the proposed Final Judgment 
and that they may be held in contempt of the 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 XIV(C) provides that if the Court finds in an enforcement 
proceeding that a Defendant has 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, to compensate American taxpayers for any costs associated 
with investigating and enforcing violations of the Final Judgment, 
Paragraph XIV(C) provides that, in any successful effort by the United 
States to enforce the Final Judgment against a Defendant, whether 
litigated or resolved before litigation, the Defendant must reimburse 
the United States for attorneys' fees, experts' fees, and other costs 
incurred in connection with any effort to enforce the Final Judgment, 
including the investigation of the potential violation.
    Paragraph XIV(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. This 
provision is meant to address circumstances such as when evidence that 
a violation of the Final

[[Page 23997]]

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 XV of the proposed Final Judgment provides that 
the Final Judgment will expire 10 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 divestiture has been completed and that 
continuation of the Final Judgment is no longer necessary or in the 
public interest.

IV. Remedies Available to Potential Private Plaintiffs

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

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least 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 U.S. 
Department of Justice, which remains free to withdraw its consent to 
the proposed Final Judgment at any time before the Court's entry of the 
Final Judgment. The comments and the response of the United States will 
be filed with the Court. In addition, the comments and the United 
States' responses will be published in the Federal Register unless the 
Court agrees that the United States instead may publish them on the 
U.S. Department of Justice, Antitrust Division's internet website.
    Written comments should be submitted in English to: Katrina Rouse, 
Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, 
U.S. Department of Justice, 450 Fifth Street NW, Suite 8700, 
Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    As an alternative to the proposed Final Judgment, the United States 
considered a full trial on the merits against Defendants. The United 
States could have continued the litigation and sought preliminary and 
permanent injunctions against Stone Canyon and SCIH's acquisition of 
Morton. The United States is satisfied, however, that the relief 
required by the proposed Final Judgment will remedy the anticompetitive 
effects alleged in the Complaint, preserving competition for the 
production and sale of evaporated salt products in the markets alleged 
in the Complaint: Pharmaceutical-grade salt in the United States and 
Canada, round-can table salt in the United States, and bulk evaporated 
salt in the northeastern United States. Thus, the proposed Final 
Judgment achieves 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.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    Under the Clayton Act and APPA, proposed Final Judgments or 
``consent decrees'' in antitrust cases brought by the United States are 
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. 16(e)(1). In making that determination, 
the Court, in accordance with the statute as amended in 2004, is 
required to consider:

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

15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors, 
the Court's inquiry is necessarily a limited one as the government is 
entitled to ``broad discretion to settle with the defendant within the 
reaches of the public interest.'' United States v. Microsoft Corp., 56 
F.3d 1448, 1461 (D.C. Cir. 1995); 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 a court's review of a 
proposed Final 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 U.S. 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 proposed Final Judgment is 
sufficiently clear, whether its enforcement mechanisms are sufficient, 
and whether it may positively harm third parties. See Microsoft, 56 
F.3d at 1458-62. With respect to the adequacy of the relief secured by 
the proposed Final Judgment, a court may not ``make de novo 
determination of facts and issues.'' United States v. W. Elec. Co., 993 
F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); see also 
Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 F.

[[Page 23998]]

Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 F. 
Supp. 2d 10, 16 (D.D.C. 2000); 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.'' W. 
Elec. Co., 993 F.2d at 1577 (quotation marks omitted). ``The court 
should bear in mind the flexibility of the public interest inquiry: the 
court's function is not to determine whether the resulting array of 
rights and liabilities is one that will best serve society, but only to 
confirm that the resulting settlement is within the reaches of the 
public interest.'' Microsoft, 56 F.3d at 1460 (quotation marks 
omitted); see also United States v. Deutsche Telekom AG, No. 19-2232 
(TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More demanding 
requirements would ``have enormous practical consequences for the 
government's ability to negotiate future settlements,'' contrary to 
congressional intent. Microsoft, 56 F.3d at 1456. ``The Tunney Act was 
not intended to create a disincentive to the use of the consent 
decree.'' Id.
    The United States' predictions about 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 by 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 W. Elec. Co., 900 F.2d at 309).
    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 (``[T]he 
`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, Congress made clear its intent 
to preserve the practical benefits of using judgments proposed by the 
United States in antitrust enforcement, Public Law 108-237 Sec.  221, 
and added the unambiguous instruction that ``[n]othing in this section 
shall be construed to require the court to conduct an evidentiary 
hearing or to require the court to permit anyone to intervene.'' 15 
U.S.C. 16(e)(2); see also 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 Enova Corp., 107 F. 
Supp. 2d at 17).

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: April 29, 2021

Respectfully submitted,

FOR PLAINTIFF UNITED STATES OF AMERICA:

-----------------------------------------------------------------------
KERRIE J. FREEBORN
(D.C. Bar #503143)
United States Department of Justice
Antitrust Division
Defense, Industrials and Aerospace Section,
450 Fifth St. NW, Suite 8700 Washington DC 20530
Telephone: (202) 476-9160
Email: [email protected]

[FR Doc. 2021-09504 Filed 5-4-21; 8:45 am]
BILLING CODE 4410-11-P