[Federal Register Volume 75, Number 42 (Thursday, March 4, 2010)]
[Notices]
[Pages 9929-9946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4550]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Bemis Company, Inc., 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, 
Hold Separate Stipulation and Order, and Competitive Impact Statement 
have been filed with the United States District Court for the District 
of Columbia in United States v. Bemis Co. et al., Civil Action No. 
1:10-cv-00295. On February 24, 2010, the United States filed a 
Complaint alleging that the proposed acquisition by Bemis Company, Inc. 
(``Bemis'') of the Alcan Packaging Food Americas business of Rio Tinto 
plc would violate Section 7 of the Clayton Act, 15 U.S.C. 18, by 
substantially lessening competition in the markets for flexible-
packaging rollstock for chunk and sliced natural cheese packaged for 
retail sale, flexible-packaging rollstock for shredded natural cheese 
packaged for retail sale, and flexible-packaging shrink bags for fresh 
meat. The proposed Final Judgment, filed the same time as the 
Complaint, requires Bemis to divest the assets of Alcan Packaging Food 
Americas related to those markets, including production plants and 
assets located in Menasha, Wisconsin and Catoosa, Oklahoma, as well as 
certain other tangible and intangible assets. The proposed Final 
Judgment also permits Bemis temporarily to occupy certain portions of 
the Menasha facility while unrelated operations are relocated and 
allows for short-term supply agreements between Bemis and the entity 
that acquires the divested assets in order to ensure that customers 
continue to receive a reliable supply of the affected products.
    Copies of the Complaint, proposed Final Judgment and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth 
Street, NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-
2481), on the Department of Justice's Web site at http://www.usdoj.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, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, 
Department of Justice,

[[Page 9930]]

Washington, DC 20530, (telephone: 202-307-0924).

J. Robert Kramer II,
Director of Operations and Civil Enforcement.
    United States of America, Department of Justice, Antitrust 
Division, 450 5th Street, NW, Suite 8700, Washington, D.C. 20530, 
Plaintiff, v. Bemis Company, Inc., One Neenah Center, Neenah, WI 
54957 and Rio Tinto plc, 2 Eastbourne Terrace, London, W2 6LG, 
United Kingdom and Alcan Corporation, 8770 West Bryn Mawr Avenue, 
Chicago, IL 60631, Defendants.

Case No.: Case: 1:10-cv-00295, Assigned To: Kollar-Kotelly, Colleen, 
Assign. Date: February 24, 2010, Description: Antitrust, Judge:

Complaint

    The United States of America (``United States''), acting under the 
direction of the Attorney General, brings this civil antitrust action 
against defendants Bemis Company, Inc. (``Bemis''), Rio Tinto plc 
(``Rio Tinto''), and Alcan Corporation (``Alcan'') to enjoin Bemis's 
proposed acquisition from Rio Tinto of the Alcan Packaging Food 
Americas business and to obtain other equitable relief. The United 
States complains and alleges as follows:

I. Nature of This Action

    1. Bemis announced that it has agreed to purchase the Alcan 
Packaging Food Americas business from Rio Tinto for $1.2 billion.
    2. Bemis and Alcan are the two leading suppliers in the United 
States and Canada of flexible packaging products suitable for a variety 
of natural cheese products packaged for retail sale. Bemis and Alcan 
are also two of the three primary suppliers of shrink bags for fresh-
meat packaging in the United States and Canada.
    3. The proposed acquisition would eliminate competition between 
Bemis and Alcan, which for some customers are the two best sources of 
flexible packaging for certain natural cheese products. The proposed 
acquisition likely also would reduce competition substantially in the 
highly concentrated market for shrink bags for fresh-meat packaging. As 
a result, the proposed acquisition likely would substantially lessen 
competition in the development, production, and sale of flexible 
packaging and associated services for chunk, sliced, and shredded 
natural cheese packaged for retail sale and for fresh meat in the 
United States and Canada in violation of Section 7 of the Clayton Act, 
15 U.S.C. 18.

II. The Defendants

    4. Bemis is a Missouri corporation headquartered in Neenah, 
Wisconsin. In 2008, Bemis and its subsidiaries had total sales of 
approximately $3.8 billion, including approximately $2.1 billion of 
flexible packaging in the United States. Bemis's flexible packaging for 
cheese and meat is produced by its wholly owned, but separately 
incorporated, Curwood, Inc. division.
    5. Rio Tinto is organized under the laws of and headquartered in 
the United Kingdom. Its 2008 sales totaled approximately $58 billion. 
Rio Tinto acquired Alcan in 2007.
    6. Alcan is a wholly owned subsidiary of Rio Tinto. Alcan is a 
Delaware corporation headquartered in Chicago, Illinois. The Alcan 
Packaging Food Americas business produces and sells flexible packaging 
in the United States, Canada, and Latin America. In 2008, the Alcan 
Packaging Food Americas business sold approximately $1.5 billion of 
flexible packaging.

III. Jurisdiction and Venue

    7. 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.
    8. Defendants themselves, or through wholly owned subsidiaries, 
produce and sell flexible packaging and associated services for natural 
cheese and fresh meat, among other products, in the flow of interstate 
commerce. Defendants' activities in the development, production, and 
sale of flexible packaging for natural cheese and fresh meat, among 
other products, substantially affect interstate commerce. This Court 
has subject-matter jurisdiction over this action pursuant to Section 15 
of the Clayton Act, 15 U.S.C. 25 and 28 U.S.C. 1331, 1337(a) and 1345.
    9. Defendants have consented to venue and personal jurisdiction in 
the District of Columbia. Venue is therefore proper in this District 
under Section 12 of the Clayton Act, 15 U.S.C. 22, and 28 U.S.C. 
1391(c). Venue is also proper in the District of Columbia for defendant 
Rio Tinto under 28 U.S.C. 1391(d).

IV. Background

A. The Flexible-Packaging Industry

    10. Flexible packaging is any package the shape of which can be 
readily changed. Flexible packaging for food encompasses a wide range 
of products, including bags and wrappings for cheeses and meats, snack 
bags, and cereal-box liners. Flexible packaging is distinguishable from 
rigid packaging, such as jars, cans, cups, trays, and hard plastic 
bottles.
    11. Varying degrees of design and manufacturing sophistication are 
required to produce flexible packaging for different end uses. Some 
flexible packaging, such as single-layer packaging, is relatively 
simple to manufacture, and customers can choose from a number of 
producers for these types of flexible packaging. Flexible packaging for 
other end uses, such as natural cheese and fresh meat, however, has 
multiple layers, is subject to more rigorous performance standards, 
requires greater scientific knowledge and technical know-how to 
engineer, and requires that technical support be readily available, 
and, therefore, is more difficult to produce and commercialize 
successfully.

B. Procurement of Flexible Packaging for Natural Cheese and Fresh Meat

    12. Producers of flexible packaging sell their packaging to 
producers of food that package their products for wholesale or retail 
sale. Customers typically have particular and unique specifications for 
their packaging. For example, customers use flexible packaging to 
differentiate their products from those of their rivals. Moreover, 
customers have different packaging equipment, and the flexible 
packaging must be specifically qualified to run on the particular 
customer's equipment.
    13. Producers of flexible packaging must work closely with 
customers to ensure that their packaging material runs efficiently on 
their customers' machines, that they meet the promised lead times, and 
that they continuously find ways to cut the customer's costs. Producers 
must also engage in research and development to deliver better 
packaging products in order to compete effectively.
    14. Customers of flexible packaging for certain forms of natural 
cheese and fresh meat can incur substantial costs to switch between 
different flexible-packaging producers. These costs result, in part, 
from having to modify existing packaging equipment to make it 
compatible with the new producer's films and the downtime associated 
with that modification. Customers also incur costs from testing and 
qualifying a new supplier.
    15. Prices for flexible packaging for natural cheese and fresh meat 
are customer-specific and based on, among other things, an individual 
customer's unique requirements. The price charged to one customer 
likely will be different from the price charged to another customer.
    16. Price competition in the relevant markets occurs in two ways. 
First, customers may issue a request for proposal, through which they 
invite potential suppliers to bid on supplying

[[Page 9931]]

packaging that meets the customers' specifications. Customers evaluate 
the competing bids on the basis of, among other things, compliance with 
their specifications, price, delivery times, and the services provided 
by each producer. Second, price competition may also occur less 
formally if a customer seeks or receives an offer from an alternative 
supplier and the incumbent is given a chance to respond.

V. Relevant Product Markets

A. Product Markets for Natural-Cheese Packaging

    17. Natural cheese is sold in several different forms, including 
chunk cheese, sliced cheese, and shredded cheese.
    18. The films used in flexible packaging for some natural-cheese 
products are sold in the form of rollstock, which is a continuous sheet 
of film that is cut for each package. Most natural cheese sold at 
retail is packaged using rollstock films. The particular flexible-
packaging rollstock and the services associated with providing it to 
customers (``flexible-packaging rollstock'') used for: (a) Chunk and 
sliced natural cheese packaged for retail sale; and (b) shredded 
natural cheese packaged for retail sale are distinct product markets.
    19. Cheese-packaging customers demand a long shelf-life for natural 
cheese. The flexible-packaging rollstock for natural cheese must 
include a barrier layer that keeps out oxygen to prevent the cheese 
from spoiling. The packaging also must prevent moisture from leaking 
into or out of the package. Some cheeses emit gasses as they age; such 
cheeses require packaging that allows gasses to escape. In addition, 
the packaging film must be sufficiently transparent to present the 
cheese well to the consumer, but also avoid discoloration from 
fluorescent lights. The packaging also must resist abrasion and 
cracking during distribution and run smoothly and efficiently on the 
customer's filling machines. Finally, the packaging must be inert, so 
that the flavor of the cheese is not compromised by the plastic.
1. Flexible-Packaging Rollstock for Chunk and Sliced Natural Cheese 
Packaged for Retail Sale Is a Relevant Product Market
    20. Chunk natural cheese is sold in bricks of specific sizes, 
typically eight, but ranging to thirty-two, ounces. Sliced natural 
cheese is typically sold in packages with roughly ten or more slices. 
Producers of chunk and sliced natural cheese generally use the same 
films for packaging.
    21. Specialized rollstock films are designed specifically for 
packaging chunk and sliced natural cheese for retail sale. While some 
chunk and sliced natural cheeses for retail sale are packaged in other 
forms of packaging (e.g., shrink bags or rigid trays), these are more 
expensive to purchase than rollstock packaging and cannot be used on 
the same packaging equipment as rollstock. A small but significant 
increase in the price of flexible-packaging rollstock for chunk and 
sliced natural cheese packaged for retail sale likely would not cause 
customers faced with such an increase to substitute to other forms of 
packaging, or otherwise purchase sufficiently less of that product, so 
as to render the price increase unprofitable.
    22. Therefore, flexible-packaging rollstock for chunk and sliced 
natural cheese packaged for retail sale is a line of commerce and a 
relevant product market within the meaning of Section 7 of the Clayton 
Act. In 2008, approximately $100 million in sales of this product were 
made in the United States and Canada.
2. Flexible-Packaging Rollstock for Shredded Natural Cheese Packaged 
for Retail Sale Is a Relevant Product Market
    23. Shredded natural cheese packaged for retail sale typically is 
packaged in bags, which often come with an easy-open mechanism and an 
easy-close attachment. The easy-open mechanism is either laser-scored 
or mechanically scored, such that some of the package's layers are 
perforated (making the package easy to tear), while leaving the oxygen 
and moisture barriers intact (preventing contamination of the product). 
The scoring process presents significant challenges to flexible-
packaging producers. The sealing process also is difficult because the 
bags typically are filled with cheese while in a vertical position and 
the release of cheese into the bags is continuous and fast.
    24. Specialized films are designed specifically for shredded 
natural cheese packaged for retail sale. A small but significant 
increase in the price of flexible-packaging rollstock for shredded 
natural cheese packaged for retail sale likely would not cause 
customers faced with such an increase to substitute to other forms of 
packaging, or otherwise purchase sufficiently less of that product, so 
as to render the price increase unprofitable.
    25. Therefore, flexible-packaging rollstock for shredded natural 
cheese packaged for retail sale is a line of commerce and a relevant 
product market within the meaning of Section 7 of the Clayton Act. In 
2008, approximately $100 million in sales of this product were made in 
the United States.

B. Flexible-Packaging Shrink Bags for Fresh Meat Are a Relevant Product 
Market

    26. Certain characteristics are common to most flexible-packaging 
films for fresh meat (i.e., beef, veal, pork, and lamb). First, most 
films for fresh meat contain a layer that prevents oxygen from coming 
into contact with the meat. Second, fresh meat films must prevent 
moisture from leaking out and contaminants from entering the packaging. 
Third, fresh meat films must run effectively on the customer's 
packaging equipment. Finally, the sealant must bond through fatty and 
oily substances.
    27. The most common type of flexible-packaging film for fresh meat 
is a shrink bag, which is designed to shrink to the contours of the 
contents when heated, forming a tight seal. Shrink bags are 
particularly suitable for use with fresh meat, in particular for 
wholesale distribution of meat to be cut for retail sale in grocery 
stores. Shrink bags and the services associated with providing them to 
customers (``flexible-packaging shrink bags'') used for fresh meat 
constitute a distinct product market. The shrink bag must be durable to 
survive distribution while maintaining its oxygen and moisture barriers 
and allowing the meat to retain its flavor. The bag also must meet 
shelf-life requirements of 30 days or more and, when used for retail 
packaging, have a high degree of transparency for optimal presentation.
    28. A small but significant increase in the price of flexible-
packaging shrink bags for fresh meat likely would not cause customers 
faced with such an increase to substitute to other forms of packaging, 
or otherwise purchase sufficiently less of that product, so as to 
render the price increase unprofitable.
    29. Therefore, flexible-packaging shrink bags for fresh meat 
constitute a line of commerce and a relevant product market within the 
meaning of Section 7 of the Clayton Act. In 2008, approximately $800 
million in sales of this product were made in the United States.

C. The United States and Canada Is a Relevant Geographic Market

    30. Producers of flexible-packaging rollstock for chunk, sliced, 
and shredded natural cheese packaged for retail sale and flexible-
packaging shrink bags for fresh meat ship the packaging to customers 
throughout the United

[[Page 9932]]

States and Canada. Producers outside the United States and Canada are 
not good alternatives for customers in the United States and Canada. 
Customers using producers outside the United States and Canada would 
face longer lead times and an increased potential for supply-chain 
complications. Moreover, major customers demand that producers of 
flexible packaging provide frequent technical and operational service 
and support at the customer's premises and do not believe that foreign 
suppliers can provide the level of service and support they demand. A 
small but significant increase in the price of flexible-packaging 
rollstock for chunk, sliced, and shredded natural cheese packaged for 
retail sale and flexible-packaging shrink bags for fresh meat in the 
United States and Canada likely would not cause customers in the United 
States and Canada to turn to producers outside the United States and 
Canada in sufficient numbers so as to render such a price increase 
unprofitable.
    31. Accordingly, the United States and Canada is a relevant 
geographic market for flexible-packaging rollstock for chunk, sliced, 
and shredded natural cheese packaged for retail sale and flexible-
packaging shrink bags for fresh meat within the meaning of Section 7 of 
the Clayton Act.

VI. The Proposed Acquisition's Likely Anticompetitive Effects

A. Likely Anticompetitive Effects in the United States and Canada for 
Flexible-Packaging Rollstock for Chunk and Sliced Natural Cheese 
Packaged for Retail Sale

    32. Based on their capabilities and sales history, Bemis and Alcan 
are two of only a few competitors that might successfully bid to supply 
a customer with flexible-packaging rollstock for chunk and sliced 
natural cheese packaged for retail sale. Currently, Bemis and Alcan 
account for approximately 37 and 54 percent, respectively, of sales in 
the United States and Canada for this product. If the proposed 
acquisition is not enjoined, Bemis and Alcan combined would account for 
approximately 91 percent of sales in the United States and Canada for 
this product. Using a measure of market concentration called the 
Herfindahl-Hirschman Index (``HHI'') (explained in Appendix A), the HHI 
would increase by more than 3,900 points, resulting in a post-
acquisition HHI of more than 8,000 points.
    33. Market shares are best measured using revenues in the markets 
for the Relevant Products because suppliers with the capacity to 
produce similar goods outside of those markets cannot quickly and 
easily shift that capacity to supply customers with the Relevant 
Products. Thus, the mere possession of similar capacity does not make a 
supplier an ``uncommitted entrant''; meeting the requirements of 
customers in a cost-efficient manner also requires specialized know-
how, experience, qualification, and the ability to innovate.
    34. Due to Bemis's and Alcan's collective overall expertise in 
meeting the needs of customers and other technical and commercial 
factors for flexible-packaging rollstock for chunk and sliced natural 
cheese packaged for retail sale, including, among other things, price, 
delivery times, service, and technical support, Bemis and Alcan 
frequently are perceived by each other, by other bidders, and by 
customers as being the two strongest competitors in that market.
    35. Bemis's bidding behavior often has been constrained by the 
possibility of losing business to Alcan. By eliminating Alcan, Bemis 
would gain the incentive and likely ability to profitably increase its 
bid prices higher than it otherwise would without the acquisition. 
Customers have also benefitted from competition between Bemis and Alcan 
through higher quality, better supply-chain options (including delivery 
times and volume-purchase requirements), technical support, and 
numerous innovations. The combination of Bemis and Alcan would 
eliminate this other competition and future benefits to the customers.
    36. The proposed acquisition, therefore, likely would substantially 
lessen competition in the United States and Canada for flexible-
packaging rollstock for chunk and sliced natural cheese packaged for 
retail sale, which likely would lead to higher prices, lower quality, 
less favorable supply-chain options, reduced technical support, and 
less innovation, in violation of Section 7 of the Clayton Act.

B. Likely Anticompetitive Effects in the United States and Canada for 
Flexible-Packaging Rollstock for Shredded Natural Cheese Packaged for 
Retail Sale

    37. Based on their capabilities and sales history, Bemis and Alcan 
are two of only a few credible competitors that might successfully bid 
to supply a customer with flexible packaging rollstock for shredded 
natural cheese packaged for retail sale. Currently, Bemis and Alcan 
account for approximately 27 and 49 percent, respectively, of sales in 
the United States and Canada for this product. If the proposed 
acquisition is not enjoined, Bemis and Alcan combined would account for 
approximately 76 percent of sales in the United States and Canada for 
this product. The HHI would increase by approximately 2,500 points, 
resulting in a post-acquisition HHI of more than 5,600 points.
    38. Market shares are best measured using revenues in the markets 
for the Relevant Products because suppliers with the capacity to 
produce similar goods outside of those markets cannot quickly and 
easily shift that capacity to supply customers with the Relevant 
Products. Thus, the mere possession of similar capacity does not make a 
supplier an ``uncommitted entrant''; meeting the requirements of 
customers in a cost-efficient manner also requires specialized know-
how, experience, qualification, and the ability to innovate.
    39. Due to Bemis's and Alcan's collective overall expertise in 
meeting the needs of customers and other technical and commercial 
factors for flexible-packaging rollstock for shredded natural cheese 
packaged for retail sale, including, among other things, price, 
delivery times, service, and technical support, Bemis and Alcan 
frequently are perceived by each other, by other bidders, and by 
customers as being the two strongest competitors in that market.
    40. Bemis's bidding behavior often has been constrained by the 
possibility of losing business to Alcan. By eliminating Alcan, Bemis 
would gain the incentive and ability to profitably increase its bid 
prices higher than it otherwise would without the acquisition. 
Customers have also benefitted from competition between Bemis and Alcan 
through higher quality, better supply-chain options, better technical 
support, and numerous innovations. The combination of Bemis and Alcan 
would eliminate this other competition and future benefits to the 
customers.
    41. The proposed acquisition, therefore, likely would substantially 
lessen competition in the United States and Canada for flexible-
packaging rollstock for shredded natural cheese packaged for retail 
sale, which likely would lead to higher prices, lower quality, less 
favorable supply-chain options, reduced technical support, and less 
innovation, in violation of Section 7 of the Clayton Act.

C. Likely Anticompetitive Effects in the United States and Canada for 
Flexible-Packaging Shrink Bags for Fresh Meat

    42. Currently, Bemis and Alcan account for approximately 20 and 8

[[Page 9933]]

percent, respectively, of the sales in the United States and Canada for 
flexible-packaging shrink bags for fresh meat. If the proposed 
acquisition is not enjoined, Bemis and Alcan combined would account for 
approximately 28 percent of sales of flexible-packaging shrink bags for 
fresh meat in the United States and Canada, and leave Bemis and one 
other firm with approximately 93 percent of sales. The HHI would 
increase by more than 300 points, resulting in a post-acquisition HHI 
of more than 5,000 points.
    43. Market shares are best measured using revenues in the markets 
for the Relevant Products because suppliers with the capacity to 
produce similar goods outside of those markets cannot quickly and 
easily shift that capacity to supply customers with the Relevant 
Products. Thus, the mere possession of similar capacity does not make a 
supplier an ``uncommitted entrant''; meeting the requirements of 
customers in a cost-efficient manner also requires specialized know-
how, experience, qualification, and the ability to innovate.
    44. Although the third supplier of flexible-packaging shrink bags 
for fresh meat is the dominant supplier, some customers desire two or 
more suppliers. As a result, Bemis and Alcan often find themselves 
competing to be the second supplier, and their price competition exerts 
pricing pressure also on the dominant firm. Unless the proposed 
acquisition is enjoined, that bidding dynamic would be eliminated 
because Bemis and Alcan no longer would bid against one another. In 
addition, Bemis's elimination of Alcan as an independent competitor 
would result in only two suppliers accounting for nearly all of the 
market. Such an increase in concentration likely would make 
coordination easier.
    45. The proposed acquisition, therefore, likely would substantially 
lessen competition in the United States and Canada for flexible-
packaging shrink bags for fresh meat, which likely would lead to higher 
prices, lower quality, less favorable supply-chain options, reduced 
technical support, and less innovation, in violation of Section 7 of 
the Clayton Act.

D. Entry Is Unlikely To Prevent Anticompetitive Harm

    46. Some customers in the United States and Canada have attempted 
to procure suitable flexible-packaging rollstock for chunk, sliced, and 
shredded natural cheese packaged for retail sale from producers that do 
not currently produce packaging for these uses. Similarly, some 
customers in the United States and Canada have attempted to procure 
suitable flexible-packaging shrink bags for fresh meat from producers 
beyond Bemis and Alcan and the dominant producer. Most of those 
flexible-packaging producers have not been able cost-effectively to 
achieve the required specifications or quality requirements. These 
suppliers likely would not be able to meet customers' required 
specifications or quality requirements cost-effectively within a 
commercially reasonable period of time, nor would they likely be able 
to produce products that would run efficiently on their customers' 
packaging equipment.
    47. New entry into the markets for flexible-packaging rollstock for 
chunk and sliced natural cheese packaged for retail sale, flexible-
packaging rollstock for shredded natural cheese packaged for retail 
sale, and flexible-packaging shrink bags for fresh meat in the United 
States and Canada would be costly, difficult, and time consuming. A new 
supplier would need to construct production lines capable of producing 
films that meet the rigorous standards set forth by major buyers of 
such films. Construction of manufacturing facilities would require 
millions of dollars of capital investment and the entrant would have to 
be committed to research and development. In addition, the technical 
know-how necessary to design and successfully manufacture packaging 
that is able to run efficiently on customers' equipment cost-
effectively is difficult to obtain.
    48. Even after a new entrant has developed the capability to supply 
flexible-packaging rollstock for chunk, sliced, and shredded natural 
cheese packaged for retail sale and flexible-packaging shrink bags for 
fresh meat, the entrant must be qualified by potential customers, 
demonstrating that it is capable of manufacturing products that meet 
rigorous quality and performance standards. For example, because the 
qualifying process for natural cheese typically requires a shelf-life 
test, where sample products are wrapped in the candidate packaging and 
stored in retail-like conditions for extended periods of time, the 
process can take many months. Further, there is no guarantee that the 
attempted qualification will be successful, and the entrant may have to 
repeat the process multiple times. In such cases, the qualification 
process can take multiple years with no guarantee of success. Moreover, 
because customer specifications are unique, qualification with one 
customer does not guarantee qualification with another.
    49. Entry of existing packaging firms is unlikely because the 
technical know how necessary to create the packaging for the relevant 
products is difficult to obtain. Also, a company would have to pass 
each customer's rigorous qualification tests. Entry of existing 
packaging firms into the markets for flexible-packaging rollstock for 
chunk and sliced natural cheese packaged for retail sale, flexible-
packaging rollstock for shredded natural cheese packaged for retail 
sale, and flexible-packaging shrink bags for fresh meat, therefore, 
likely would not be timely, likely, and sufficient to defeat a small 
but significant increase in price in the relevant markets.
    50. As a result of these barriers, entry by new firms or by 
existing packaging firms likely would not be timely, likely, and 
sufficient to prevent a likely exercise of market power by Bemis after 
the acquisition.

VII. The Proposed Acquisition Violates Section 7 of the Clayton Act

    51. Bemis's proposed acquisition of the Alcan Packaging Food 
Americas business would be likely to substantially lessen competition 
in violation of Section 7 of the Clayton Act, 15 U.S.C. 18, in the 
United States and Canada for: (1) Flexible-packaging rollstock for 
chunk and sliced natural cheese packaged for retail sale; (2) flexible-
packaging rollstock for shredded natural cheese packaged for retail 
sale; and (3) flexible-packaging shrink bags for fresh meat.
    52. Unless enjoined, the proposed acquisition likely would have the 
following anticompetitive effects, among others:
    (a) Actual and potential competition between Bemis and Alcan in the 
relevant markets would be eliminated;
    (b) Competition in the relevant markets likely would be 
substantially lessened; and
    (c) For the relevant products, prices would likely increase, 
quality would likely decrease, supply-chain options would likely be 
less favorable, technical support would likely be reduced, and 
innovation would likely decline.

VIII. Requested Relief

    53. The United States requests that this Court:
    (a) Adjudge and decree Bemis's proposed acquisition of the Alcan 
Packaging Food Americas business to violate Section 7 of the Clayton 
Act, 15 U.S.C. 18;
    (b) Enjoin defendants and all persons acting on their behalf from 
consummating the proposed acquisition of the Alcan Packaging Food 
Americas

[[Page 9934]]

business by Bemis, or from entering into or carrying out any other 
agreement, plan, or understanding the effect of which would be to 
combine Bemis with the Alcan Packaging Food Americas business;
    (c) Award the United States its costs for this action; and
    (d) Award the United States such other and further relief as the 
Court deems just and proper.

For Plaintiff United States of America:

Christine A. Varney,
Assistant Attorney General, D.C. Bar # 411654.

William F. Cavanaugh, Jr.,
Deputy Assistant Attorney General.

J. Robert Kramer II,
Director of Operations.

Maribeth Petrizzi,
Chief, Litigation II Section, D.C. Bar # 435204.

Dorothy B. Fountain,
Assistant Chief, Litigation II Section, D.C. Bar # 439469.

Rachel Adcox,
Attorney, United States Department of Justice, Antitrust Division, 
450 Fifth Street NW., Suite 8700, Washington, DC, 20530 (202) 307-
0924.

Dated: February 24, 2010.

Appendix A--Definition of HHI

    The term ``HHI'' means the Herfindahl-Hirschman Index, a commonly 
accepted measure of market concentration. The HHI is calculated by 
squaring the market share of each firm competing in the market and then 
summing the resulting numbers. For example, for a market consisting of 
four firms with shares of 30, 30, 20, and 20%, the HHI is 2,600 (30\2\ 
+ 30\2\ + 20\2\ + 20\2\ = 2,600). The HHI takes into account the 
relative size distribution of the firms in a market. It approaches zero 
when a market is occupied by a large number of firms of relatively 
equal size and reaches its maximum of 10,000 points when a market is 
controlled by a single firm. The HHI increases both as the number of 
firms in the market decreases and as the disparity in size between 
those firms increases.
    Markets in which the HHI is between 1,000 and 1,800 points are 
considered to be moderately concentrated, and markets in which the HHI 
is in excess of 1,800 points are considered to be highly concentrated. 
See Horizontal Merger Guidelines ] 1.51 (revised Apr. 8, 1997). 
Transactions that increase the HHI by more than 100 points in highly 
concentrated markets presumptively raise antitrust concerns under the 
Horizontal Merger Guidelines issued by the Department of Justice and 
the Federal Trade Commission. See id.

    United States of America, Plaintiff, v. Bemis Company, Inc., and 
Rio Tinto PLC, and Alcan Corporation, Defendants.

Case No.: 1:10-cv-00295
Judge: Kollar-Kotelly, Colleen
Deck Type: Antitrust
Date Stamp: February 24, 2010

Final Judgment

    Whereas, Plaintiff United States of America (``United States'') 
filed its Complaint on February 24, 2010, the United States and 
defendants Bemis Company, Inc., Rio Tinto plc, and Alcan Corporation, 
by their respective attorneys, have consented to the entry of this 
Final Judgment without trial or adjudication of any issue of fact or 
law, and without this Final Judgment constituting any evidence against 
or admission by any party regarding any issue of fact or law;
    And whereas, defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by defendants to assure 
that competition is not substantially lessened;
    And whereas, the United States requires defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And whereas, defendants have represented to the United States that 
the divestitures required below can and will be made and that 
defendants will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the divestiture 
provisions contained below;
    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged, and decreed:

I. Jurisdiction

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

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer'' or ``Acquirers'' means the entity or entities to 
whom defendants divest the Divestiture Assets.
    B. ``Bemis'' means defendant Bemis Company, Inc., a Missouri 
corporation headquartered in Neenah, Wisconsin, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.
    C. ``Rio Tinto'' means defendant Rio Tinto plc, organized under the 
laws of and headquartered in the United Kingdom, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.
    D. ``Alcan'' means defendant Alcan Corporation, a Delaware 
corporation that is a wholly owned subsidiary of Rio Tinto 
headquartered 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.
    E. ``Divestiture Assets'' means:
    (1) Alcan's facility located at 905 W. Verdigris Parkway, Catoosa, 
Oklahoma 74015 (``Catoosa facility'');
    (2) Alcan's facility located at 271 River Street, Menasha, 
Wisconsin 54952 (``Menasha facility''); provided, however, that the 
tangible assets used exclusively or primarily for the wax-coating 
operation located at the Menasha facility shall not be divested 
pursuant to this Final Judgment;
    (3) The following tangible assets:
    (a) All tangible assets (leased or owned) necessary to operate or 
used in or for the Catoosa facility and the Menasha facility, 
including, but not limited to, all real property and improvements, 
manufacturing equipment, product inventory, tooling and fixed assets, 
personal property, titles, interests, leases, input inventory, office 
furniture, materials, supplies, and other tangible property;
    (b) All tangible assets (leased or owned) used exclusively or 
primarily for the research and development of any Alcan Relevant 
Product in the United States and/or Canada, including, but not limited 
to, materials, supplies, and other property; and
    (c) All records and documents relating to any Alcan Relevant 
Product in the United States and/or Canada, including, but not limited 
to, licenses, permits, and authorizations issued by any governmental 
organization; contracts, teaming agreements, leases, commitments, 
certifications, and understandings, including, but not limited to, 
supply agreements; customer lists, contracts, accounts, and credit 
records; and repair and performance records.
    (4) The following intangible assets:
    (a) All intangible assets used exclusively or primarily in the 
design, development, production, marketing, servicing, distribution, 
and/or sale of

[[Page 9935]]

any Alcan Relevant Product in the United States and/or Canada, 
including, but not limited to, all patents, licenses and sub-licenses, 
intellectual property, copyrights, trade names or trademarks, 
including, but not limited to, ``Halo,'' ``Maraflex,'' ``Clearshield,'' 
or any derivation thereof, service marks, service names, technical 
information, designs, trade dress, and trade secrets; computer 
software, databases, and related documentation; know-how, including, 
but not limited to, recipes, formulas, and machine settings; 
information relating to plans for, improvements to, or line extensions 
of, Alcan's Relevant Products; drawings, blueprints, designs, design 
protocols, specifications for materials, and specifications for parts 
and devices; marketing and sales data; quality assurance and control 
procedures; design tools and simulation capability; contractual rights; 
manuals and technical information provided by Alcan to its own 
employees, customers, suppliers, agents, or licensees; safety 
procedures for the handling of materials and substances; research 
information and data concerning historic and current research and 
development efforts, including, but not limited to, designs and 
experiments and the results of successful and unsuccessful designs and 
experiments; and
    (b) With respect to any intangible assets that are not included in 
paragraph II(E)(4)(a), above, and that prior to the filing of the 
Complaint in this matter were used in connection with the design, 
development, production, marketing, servicing, distribution, and/or 
sale of both any Alcan Relevant Product and any other Alcan product, a 
non-exclusive, non-transferable license for such intangible assets to 
be used for the design, development, production, marketing, servicing, 
distribution, and/or sale of any of the Relevant Products or the 
operation or use of the Catoosa facility and/or the Menasha facility 
for the period of time that defendants have rights to such assets; 
provided, however, that any such license is transferable to any future 
purchaser of all or any relevant portion of the Divestiture Assets.
    F. ``Relevant Products'' means any flexible-packaging rollstock 
used for chunk, sliced, and/or shredded natural cheeses packaged for 
retail sale and any flexible-packaging shrink bags used for fresh meat.
    G. ``Transaction'' means Bemis's proposed acquisition of the Alcan 
Packaging Food Americas business.

III. Applicability

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

IV. Divestitures

    A. Bemis is ordered and directed, within ninety (90) calendar days 
after the filing of the Complaint in this matter, or five (5) calendar 
days after notice of the entry of this Final Judgment by the Court, 
whichever is later, to divest the Divestiture Assets in a manner 
consistent with this Final Judgment to an Acquirer or Acquirers 
acceptable to the United States, in its sole discretion. The United 
States, in its sole discretion, may agree to one or more extensions of 
this time period not to exceed sixty (60) calendar days in total, and 
shall notify the Court in such circumstances. Bemis agrees to use its 
best efforts to divest the Divestiture Assets as expeditiously as 
possible.
    B. In accomplishing the divestitures ordered by this Final 
Judgment, Bemis promptly shall make known, by usual and customary 
means, the availability of the Divestiture Assets. Bemis shall inform 
any person making inquiry regarding a possible purchase of the 
Divestiture Assets that they are being divested pursuant to this Final 
Judgment and provide that person with a copy of this Final Judgment. 
Bemis shall offer to furnish to all prospective Acquirers, subject to 
customary confidentiality assurances, all information and documents 
relating to the Divestiture Assets customarily provided in a due 
diligence process, except such information or documents subject to the 
attorney-client privilege or work-product doctrine. Bemis shall make 
available such information to the United States at the same time that 
such information is made available to any other person.
    C. Bemis shall provide the Acquirer or Acquirers and the United 
States information relating to the personnel employed at the Catoosa 
facility and the Menasha facility and the personnel otherwise involved 
in the design, development, production, marketing, servicing, 
distribution, and/or sale of Alcan's Relevant Products to enable the 
Acquirer or Acquirers to make offers of employment. Defendants will not 
interfere with any negotiations by the Acquirer or Acquirers to employ 
any person who is employed at the Catoosa facility or the Menasha 
facility or is otherwise involved in the design, development, 
production, marketing, servicing, distribution, and/or sale of Alcan's 
Relevant Products. Interference with respect to this paragraph 
includes, but is not limited to, offering to increase an employee's 
salary or benefits other than as a part of a company-wide increase in 
salary or benefits. In addition, for each employee who elects 
employment by the Acquirer or Acquirers, Bemis shall vest all unvested 
pension and other equity rights of that employee and provide all 
benefits to which the employee would have been entitled if terminated 
without cause.
    D. Defendants shall waive all noncompete agreements for any current 
or former Alcan employee employed at the Catoosa facility, the Menasha 
facility, or otherwise employed in the design, development, production, 
marketing, servicing, distribution, and/or sale of any Alcan Relevant 
Product.
    E. Bemis shall permit prospective Acquirers of the Divestiture 
Assets to have reasonable access to personnel and to make inspections 
of the physical facilities associated with the Divestiture Assets; 
access to any and all environmental, zoning, and other permit documents 
and information; and access to any and all financial, operational, or 
other documents and information customarily provided as part of a due 
diligence process.
    F. Bemis shall warrant to the Acquirer or Acquirers that each asset 
will be operational on the date of sale.
    G. Defendants shall not take any action that will impede in any way 
the permitting, operation, use, or divestiture of the Divestiture 
Assets.
    H. Defendants shall warrant to the Acquirer or Acquirers that there 
are no material defects in the environmental, zoning or other permits 
pertaining to the operation of each asset, and that following the sale 
of the Divestiture Assets, defendants will not undertake, directly or 
indirectly, any challenges to the environmental, zoning, or other 
permits relating to the operation of the Divestiture Assets.
    I. Bemis shall take all steps necessary to accomplish the transfer 
of the leasehold and other rights of possession of the Catoosa facility 
to the Acquirer,

[[Page 9936]]

including, but not limited to, invoking and exercising all applicable 
early termination, early purchase, or other provisions contained in the 
agreements related to the Catoosa facility, and paying all necessary 
sums specified in such agreements.
    J. Bemis shall warrant that it is divesting Alcan's entire business 
relating to each of the Relevant Products and will not manufacture any 
Alcan Relevant Product after the date the Divestiture Assets are 
divested until the expiration of this Final Judgment. Defendants shall 
not solicit business for any Relevant Product that is subject to an 
unexpired Alcan customer contract transferred to the Acquirer for a 
period of one (1) year from the date of the divestiture of such 
contract or the remaining term of the contract, whichever is shorter.
    K. The Acquirer of the Menasha facility shall enter into an 
agreement with Bemis permitting Bemis to occupy the portions of the 
Menasha facility utilized for Alcan's wax-coating operations for a 
period of no longer than three (3) years after the date the Transaction 
is closed. By no later than three (3) months after the date the 
Transaction is closed, Bemis shall create physical barriers that 
segregate the wax-coating operations from the portions of the Menasha 
facility to be occupied by the Acquirer. Bemis's areas and operations 
at the Menasha facility shall be secured separately from those of the 
Acquirer so that the Acquirer's areas and operations cannot be accessed 
by Bemis and Bemis's areas and operations cannot be accessed by the 
Acquirer, other than for facility repair, support, and maintenance 
pursuant to a lease or other agreement. At the option of the Acquirer, 
the lease agreement may include a provision requiring Bemis to remove 
any or all physical barriers erected to segregate its areas and 
operations from the Acquirer's areas and operations pursuant to this 
paragraph.
    L. At the option of the Acquirer of the Divestiture Assets relating 
to the ``Maraflex'' products, Bemis shall enter into a supply contract 
with that Acquirer for the ``Maraflex'' products sufficient to satisfy 
that Acquirer 's obligations under any customer contract for a period 
of up to one (1) year. The amount of ``Maraflex'' products produced by 
Bemis for the Acquirer pursuant to such a supply contract shall be 
limited to the total volume of ``Maraflex'' products produced by Alcan 
in 2009 plus one percent, unless otherwise mutually agreed by Bemis and 
the Acquirer. The terms and conditions of any contractual arrangement 
intended to satisfy this provision must be reasonably related to market 
conditions for these products. The United States, in its sole 
discretion, may approve an extension of the term of this supply 
contract for a period of up to two (2) years. If the Acquirer seeks an 
extension of the term of this supply contract, it shall so notify the 
United States in writing at least four (4) months prior to the date the 
supply contract expires. If the United States approves such an 
extension, it shall so notify Bemis in writing at least three (3) 
months prior to the date the supply contract expires.
    M. At the option of the Acquirer of the Divestiture Assets relating 
to the ``Maraflex'' products, Bemis shall enter into a transition 
services agreement with that Acquirer sufficient to meet all or part of 
that Acquirer's needs for assistance in matters relating to the 
development, production, and/or service of the ``Maraflex'' products or 
technology for a period of at least six (6) months but no longer than 
three (3) years. The terms and conditions of any contractual 
arrangement intended to satisfy this provision must be reasonably 
related to the market value of the expertise of the personnel providing 
any needed assistance.
    N. At the option of the Acquirer of the Menasha facility, Bemis 
shall enter into a supply contract with that Acquirer for any Relevant 
Product produced at Alcan's facility located at 901 Morrison Drive, 
Boscobel, Wisconsin 53805 (the ``Boscobel facility''), sufficient to 
satisfy that Acquirer's obligations under any customer contract for a 
period of up to one (1) year. The amount of Relevant Products produced 
by Bemis for the Acquirer pursuant to such a supply contract shall be 
limited to the total volume of Relevant Products produced by Alcan at 
the Boscobel facility in 2009 plus one percent, unless otherwise 
mutually agreed by Bemis and the Acquirer. The terms and conditions of 
any contractual arrangement intended to satisfy this provision must be 
reasonably related to market conditions for these products. The United 
States, in its sole discretion, may approve an extension of the term of 
this supply contract for a period of up to one (1) year. If the 
Acquirer seeks an extension of the term of this supply contract, it 
shall so notify the United States in writing at least four (4) months 
prior to the date the supply contract expires. If the United States 
approves such an extension, it shall so notify Bemis in writing at 
least three (3) months prior to the date the supply contract expires.
    O. At the option of Bemis, the Acquirer of the Catoosa facility 
shall enter into a supply contract for the ``Clearshield'' products 
sufficient to satisfy Alcan's or Bemis's obligations to Alcan 
affiliates Danaflex, Maua, and Envaril for a period of up to one (1) 
year. The amount of ``Clearshield'' products produced by the Acquirer 
for Bemis pursuant to such a supply contract shall be limited to the 
total volume of ``Clearshield'' products produced by Alcan for 
Danaflex, Maua, and Envaril in 2009 plus one percent, unless otherwise 
mutually agreed by Bemis and the Acquirer. The terms and conditions of 
any contractual arrangement intended to satisfy this provision must be 
reasonably related to market conditions for these products. The United 
States, in its sole discretion, may approve an extension of the term of 
this supply contract for a period of up to two (2) years. If Bemis 
seeks an extension of the term of this supply contract, it shall so 
notify the United States in writing at least four (4) months prior to 
the date the supply contract expires. If the United States approves 
such an extension, it shall so notify the Acquirer in writing at least 
three (3) months prior to the date the supply contract expires.
    P. At the option of Bemis, the Acquirer or Acquirers shall enter 
into an agreement to provide Bemis with a non-exclusive, non-
transferable license for the intangible assets described in paragraph 
II(E)(4)(a), above, that prior to the filing of the Complaint in this 
matter were used in connection with the design, development, 
production, marketing, servicing, distribution, and/or sale of both any 
Alcan Relevant Product and any other Alcan product; provided, however, 
that any such license is solely for use in connection with the design, 
development, production, marketing, servicing, distribution, and/or 
sale of products other than the Alcan Relevant Products. The terms and 
conditions of any contractual arrangement intended to satisfy this 
provision must be reasonably related to market conditions for such 
licenses.
    Q. At the option of Bemis, the Acquirer of the Divestiture Assets 
relating to the ``Clearshield'' products shall enter into an agreement 
to provide Bemis with a non-exclusive, non-transferable license to 
enable Bemis to produce ``Clearshield'' products for sale outside the 
United States and Canada. The terms and conditions of any contractual 
arrangement intended to satisfy this provision must be reasonably 
related to market conditions for such licenses.
    R. At the option of Bemis, the Acquirer of the Menasha facility 
shall enter into an agreement with Bemis to

[[Page 9937]]

provide Bemis with rotogravure printing services to be used in 
connection with Alcan's wax-coating operation located at the Menasha 
facility for a period of up to twelve (12) months. The terms and 
conditions of any contractual arrangement intended to satisfy this 
provision must be reasonably related to market conditions for these 
services.
    S. In any instance where a third party has a right to a divested 
intangible asset pursuant to an agreement with any defendant, and where 
the agreement was entered into prior to the date of the filing of the 
Complaint in this matter, the Acquirer of that divested asset shall 
enter into an agreement with that third party to provide it with a 
right to that asset under terms and conditions sufficient to satisfy 
defendants' obligations under the original agreement.
    T. Unless the United States otherwise consents in writing, the 
divestitures pursuant to Section IV, or by trustee appointed pursuant 
to Section V, of this Final Judgment, shall include the entire 
Divestiture Assets, and shall be accomplished in such a way as to 
satisfy the United States, in its sole discretion, that the Divestiture 
Assets can and will be used by the Acquirer or Acquirers as part of a 
viable, ongoing business engaged in the design, development, 
production, marketing, servicing, distribution, and sale of the 
Relevant Products. Divestiture of the Divestiture Assets may be made to 
one or more Acquirers, provided that in each instance it is 
demonstrated to the sole satisfaction of the United States that the 
Divestiture Assets will remain viable and the divestiture of such 
assets will remedy the competitive harm alleged in the Complaint. The 
divestitures, whether pursuant to Section IV or Section V of this Final 
Judgment:
    (1) Shall be made to an Acquirer or Acquirers that, in the United 
States's sole judgment, has the intent and capability (including the 
necessary managerial, operational, technical and financial capability) 
of competing effectively as a supplier of the Relevant Products; and
    (2) Shall be accomplished so as to satisfy the United States, in 
its sole discretion, that none of the terms of any agreement between 
the Acquirer or Acquirers and defendants give defendants the ability 
unreasonably to raise the Acquirer's or Acquirers' costs, to lower the 
Acquirer's or Acquirers' efficiency, or otherwise to interfere in the 
ability of the Acquirer or Acquirers to compete effectively.

V. Appointment of Trustee

    A. If Bemis has not divested the Divestiture Assets within the time 
period specified in Section IV(A), Bemis shall notify the United States 
of that fact in writing. Upon application of the United States, the 
Court shall appoint a 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 trustee becomes effective, only the 
trustee shall have the right to sell the Divestiture Assets. The 
trustee shall have the power and authority to accomplish the 
divestiture to an Acquirer or Acquirers acceptable to the United States 
at such price and on such terms as are then obtainable upon reasonable 
effort by the trustee, subject to the provisions of Sections IV, V, and 
VI of this Final Judgment, and shall have such other powers as this 
Court deems appropriate. Subject to Section V(D) of this Final 
Judgment, the trustee may hire at the cost and expense of Bemis any 
investment bankers, attorneys, or other agents, who shall be solely 
accountable to the trustee, reasonably necessary in the trustee's 
judgment to assist in the divestiture.
    C. Defendants shall not object to a sale by the trustee on any 
ground other than the trustee's malfeasance. Any such objections by 
defendants must be conveyed in writing to the United States and the 
trustee within ten (10) calendar days after the trustee has provided 
the notice required under Section VI.
    D. The trustee shall serve at the cost and expense of Bemis, on 
such terms and conditions as the United States approves, and shall 
account for all monies derived from the sale of the assets sold by the 
trustee and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services and 
those of any professionals and agents retained by the trustee, all 
remaining money shall be paid to defendants and the trust shall then be 
terminated. The compensation of the trustee and any professionals and 
agents retained by the trustee shall be reasonable in light of the 
value of the Divestiture Assets and based on a fee arrangement 
providing the trustee with an incentive based on the price and terms of 
the divestiture and the speed with which it is accomplished, but 
timeliness is paramount.
    E. Defendants shall use their best efforts to assist the trustee in 
accomplishing the required divestitures. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to the personnel, books, 
records, and facilities of the business to be divested, and defendants 
shall develop financial and other information relevant to such business 
as the trustee may reasonably request, subject to reasonable protection 
for trade secret or other confidential research, development, or 
commercial information. Defendants shall take no action to interfere 
with or to impede the trustee's accomplishment of the divestitures.
    F. After its appointment, the trustee shall file monthly reports 
with the United States and the Court setting forth the trustee's 
efforts to accomplish the divestitures ordered under this Final 
Judgment. To the extent such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. Such reports shall include the name, 
address, and telephone number of each person who, during the preceding 
month, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in the Divestiture Assets, and 
shall describe in detail each contact with any such person. The trustee 
shall maintain full records of all efforts made to divest the 
Divestiture Assets.
    G. If the trustee has not accomplished the divestitures ordered 
under this Final Judgment within six (6) months after his or her 
appointment, the trustee shall promptly file with the Court a report 
setting forth: (1) The trustee's efforts to accomplish the required 
divestitures; (2) the reasons, in the trustee's judgment, why the 
required divestitures have not been accomplished; and (3) the trustee's 
recommendations. To the extent such reports contain information that 
the trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. The trustee shall at the same time furnish 
such report to the United States, which shall have the right to make 
additional recommendations consistent with the purpose of the trust. 
The Court thereafter shall enter such orders as it shall deem 
appropriate to carry out the purpose of the Final Judgment, which may, 
if necessary, include extending the trust and the term of the trustee's 
appointment by a period requested by the United States.

VI. Notice of Proposed Divestiture

    A. Within two (2) business days following execution of a definitive 
divestiture agreement, Bemis shall notify the United States of any 
proposed divestiture required by Section IV of

[[Page 9938]]

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

VII. Financing

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

VIII. Hold Separate

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

IX. Affidavits

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, and every thirty (30) calendar days thereafter until 
the divestitures have been completed under Section IV or V, Bemis shall 
deliver to the United States an affidavit as to the fact and manner of 
its compliance with Section IV or V of this Final Judgment. Each such 
affidavit shall include the name, address, and telephone number of each 
person who, during the preceding thirty (30) calendar days, made an 
offer to acquire, expressed an interest in acquiring, entered into 
negotiations to acquire, or was contacted or made an inquiry about 
acquiring, any interest in the Divestiture Assets, and shall describe 
in detail each contact with any such person during that period. Each 
such affidavit shall also include a description of the efforts Bemis 
has taken to solicit buyers for the Divestiture Assets, and to provide 
required information to prospective Acquirers, including the 
limitations, if any, on such information. Assuming the information set 
forth in the affidavit is true and complete, any objection by the 
United States to information provided by Bemis, including limitations 
on information, shall be made within fourteen (14) calendar days of 
receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, Bemis shall deliver to the United States an affidavit 
that describes in reasonable detail all actions defendants have taken 
and all steps defendants have implemented on an ongoing basis to comply 
with Section VIII of this Final Judgment. Bemis shall deliver to the 
United States an affidavit describing any changes to the efforts and 
actions outlined in defendants' earlier affidavits filed pursuant to 
this Section within fifteen (15) calendar days after the change is 
implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after such 
divestiture has been completed.

X. Compliance Inspection

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of determining whether the Final Judgment should be 
modified or vacated, and subject to any legally recognized privilege, 
from time to time authorized representatives of the United States 
Department of Justice Antitrust Division, including consultants and 
other persons retained by the United States, shall, upon written 
request of an authorized representative of the Assistant Attorney 
General in charge of the Antitrust Division, and on reasonable notice 
to defendants, be permitted:
    (1) Access during defendants' office hours to inspect and copy, or 
at the option of the United States, to require defendants to provide 
hard copy or electronic copies of, all books, ledgers, accounts, 
records, data, and documents in the possession, custody, or control of 
defendants, relating to any matters contained in this Final Judgment; 
and
    (2) To interview, either informally or on the record, defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by defendants.
    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit written reports or responses to written 
interrogatories, under oath if requested, relating to any of the 
matters contained in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this Section shall be divulged by the United States to any person other 
than an authorized representative of the executive branch of the United 
States, except in the course of legal proceedings to which the United 
States is a party (including grand jury proceedings), for the purpose 
of securing compliance with this Final Judgment, or as otherwise 
required by law.
    D. If, at the time information or documents are furnished by 
defendants to the United States, defendants represent and identify in 
writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(1)(G) of the 
Federal Rules of Civil Procedure, and defendants mark each pertinent 
page of such material, ``Subject to claim of protection under Rule 
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United 
States shall give defendants ten (10) calendar days notice prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding).

XI. Notification

    Unless such transaction is otherwise subject to the reporting and 
waiting

[[Page 9939]]

period requirements of the Hart-Scott-Rodino Antitrust Improvements Act 
of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''), Bemis, without 
providing advance notification to the Antitrust Division, shall not 
directly or indirectly acquire any assets of or any interest 
(including, but not limited to, any financial, security, loan, equity, 
or management interest) in any company in the business of designing, 
developing, producing, marketing, servicing, distributing, and/or 
selling any of the Relevant Products in the United States and/or Canada 
during the term of this Final Judgment.
    Such notification shall be provided to the Antitrust Division in 
the same format as, and per the instructions relating to the 
Notification and Report Form set forth in the Appendix to Part 803 of 
Title 16 of the Code of Federal Regulations as amended, except that the 
information requested in Items 5 through 9 of the instructions must be 
provided only about the Relevant Products. Notification shall be 
provided at least thirty (30) calendar days prior to acquiring any such 
interest, and shall include, beyond what may be required by the 
applicable instructions, the names of the principal representatives of 
the parties to the agreement who negotiated the agreement, and any 
management or strategic plans discussing the proposed transaction. If 
within the 30-day period after notification, representatives of the 
Antitrust Division make a written request for additional information, 
defendants shall not consummate the proposed transaction or agreement 
until thirty (30) calendar days after submitting all such additional 
information. Early termination of the waiting periods in this paragraph 
may be requested and, where appropriate, granted in the same manner as 
is applicable under the requirements and provisions of the HSR Act and 
rules promulgated thereunder. This Section shall be broadly construed 
and any ambiguity or uncertainty regarding the filing of notice under 
this Section shall be resolved in favor of filing notice.

XII. No Reacquisition

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

XIII. Retention of Jurisdiction

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

XIV. Expiration of Final Judgment

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

XV. Public Interest Determination

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

Date: ------------

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

United States District Judge.
    United States of America, Plaintiff, v. Bemis Company, Inc., and 
Rio Tinto PLC, and Alcan Corporation, Defendants.

Case: 1:10-cv-00295
Assigned To: Kollar-Kotelly, Colleen
Assign. Date: 02/24/2010
Description: Antitrust
Judge:
Deck Type: Antitrust
Date Stamp:

Competitive Impact Statement

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

I. Nature and Purpose of the Proceeding

    Defendants Bemis Company, Inc. and Rio Tinto plc entered into a 
Sale and Purchase Agreement, dated July 5, 2009, pursuant to which 
Bemis agreed to acquire the Alcan Packaging Food Americas business from 
Rio Tinto for $1.2 billion.
    The United States filed a civil antitrust Complaint against Bemis, 
Rio Tinto, and Alcan Corporation on February 24, 2010, seeking to 
enjoin Bemis's acquisition of the Alcan Packaging Food Americas 
business. The Complaint alleged that the acquisition likely would 
substantially lessen competition in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18, in the United States and Canada, for the 
design, development, production, marketing, servicing, distribution, 
and sale of: (1) Flexible-packaging rollstock for chunk and sliced 
natural cheese packaged for retail sale; (2) flexible-packaging 
rollstock for shredded natural cheese packaged for retail sale; and (3) 
flexible-packaging shrink bags for fresh meat (hereinafter, 
collectively, the ``Relevant Products''). That loss of competition 
likely would result in higher prices, decreased quality, less favorable 
supply-chain options, reduced technical support, and lesser innovation 
in the markets for the Relevant Products.
    At the same time the Complaint was filed, the United States filed a 
Hold Separate Stipulation and Order (``Hold Separate'') and a proposed 
Final Judgment, which are designed to eliminate the anticompetitive 
effects of Bemis's acquisition of the Alcan Packaging Food Americas 
business. Under the proposed Final Judgment, which is explained more 
fully below, Bemis is required to divest all of the intangible assets 
(i.e., intellectual property and know-how) related to the production of 
Alcan Relevant Products \1\ in the United States and Canada and two of 
the plants involved in the production of the Alcan Relevant Products. 
Bemis is also required to divest all of the tangible assets necessary 
to operate the divested plants and all tangible assets used exclusively 
or primarily in the production of any Alcan Relevant Product in the 
United States or Canada.
---------------------------------------------------------------------------

    \1\ The term ``Alcan Relevant Products'' refers specifically to 
those Relevant Products produced by Alcan, rather than to Relevant 
Products produced by Bemis or others.
---------------------------------------------------------------------------

    The United States and defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment would terminate this action, except that 
the Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the Final Judgment and to punish violations thereof.

II. Description of the Events Giving Rise to the Alleged Violations

A. The Defendants

    Bemis is a worldwide provider of packaging materials, including 
flexible packaging for natural cheese and fresh meat. In 2008, Bemis 
and its subsidiaries had total sales of approximately $3.8 billion, 
including approximately $2.1 billion in sales of flexible packaging in 
the United States.
    Rio Tinto is an international mining company headquartered in the 
United

[[Page 9940]]

Kingdom, with approximately $58 billion in sales in 2008. Alcan is a 
wholly owned subsidiary of Rio Tinto. The Alcan Packaging Food Americas 
business produces and sells flexible packaging in the United States, 
Canada, and Latin America. In 2008, the Alcan Packaging Food Americas 
business sold approximately $1.5 billion of flexible packaging.

B. The Competitive Effects of the Acquisition in the Markets for 
Flexible Packaging for Natural Cheese and Fresh Meat

    Flexible packaging is any package the shape of which can be readily 
changed. Flexible packaging for food encompasses a wide range of 
products, including bags and wrappings for cheeses and meats, snack 
bags, and cereal-box liners. Flexible packaging is distinguishable from 
rigid packaging, such as jars, cans, cups, trays, and hard plastic 
bottles.
    Varying degrees of design and manufacturing sophistication are 
required to produce flexible packaging for different end uses. Some 
flexible packaging, such as single-layer packaging, is relatively 
simple to manufacture, and customers can choose from a number of 
producers for these types of flexible packaging. Flexible packaging for 
other end uses, such as natural cheese and fresh meat, however, has 
multiple layers, is subject to more rigorous performance standards, 
requires greater scientific knowledge and technical know-how to 
engineer, and requires that technical support be readily available, 
and, therefore, is more difficult to produce and commercialize 
successfully.
    Bemis and Alcan are the two leading suppliers in the United States 
and Canada of flexible packaging products suitable for a variety of 
natural cheese products packaged for retail sale. Bemis and Alcan are 
also two of the three primary suppliers of shrink bags for fresh-meat 
packaging in the United States and Canada.
1. Relevant Product Markets
a. Natural-Cheese Packaging
    Natural cheese is sold in several forms, including chunk cheese, 
sliced cheese, and shredded cheese. The films used in flexible 
packaging for some natural cheese products are sold in the form of 
rollstock, which is a continuous sheet of film that is cut for each 
package. Most natural cheese sold at retail is packaged using rollstock 
films.
    Cheese packaging customers demand a long shelf-life for natural 
cheese. The flexible-packaging rollstock for natural cheese must 
include a barrier layer that keeps out oxygen to prevent the cheese 
from spoiling. The packaging must also prevent moisture from leaking 
into or out of the package. Some cheeses emit gasses as they age; such 
cheeses require packaging that allows gasses to escape. In addition, 
the packaging film must be sufficiently transparent to present the 
cheese well to the consumer, but also avoid discoloration from 
fluorescent lights. The packaging must also resist abrasion and 
cracking during distribution and run smoothly and efficiently on the 
customer's filling machines. Finally, the packaging must be inert, so 
that the flavor of the cheese is not compromised by the plastic.
(i) Flexible-Packaging Rollstock for Chunk and Sliced Natural Cheese
    Chunk natural cheese is sold in bricks of specific sizes, typically 
eight, but ranging to thirty-two, ounces. Sliced natural cheese is 
typically sold in packages with roughly ten or more slices. Producers 
of chunk and sliced natural cheese generally use the same films for 
packaging. Specialized rollstock films are designed specifically for 
packaging chunk and sliced natural cheese for retail sale. While some 
chunk and sliced natural cheeses for retail sale are packaged in other 
forms of packaging (e.g., shrink bags or rigid trays), these are more 
expensive to purchase than rollstock packaging and cannot be used on 
the same packaging equipment as rollstock. A small but significant 
increase in the price of flexible-packaging rollstock for chunk and 
sliced natural cheese packaged for retail sale likely would not cause 
customers faced with such an increase to substitute other forms of 
packaging, or otherwise purchase sufficiently less of the product, so 
as to render the price increase unprofitable. Accordingly, the United 
States has alleged that flexible-packaging rollstock for chunk and 
sliced natural cheese packaged for retail sale is a line of commerce 
and a relevant product market within the meaning of Section 7 of the 
Clayton Act.
(ii) Flexible-Packaging Rollstock for Shredded Natural Cheese Packaged 
for Retail Sale
    Shredded natural cheese packaged for retail sale typically is 
packaged in bags, which often come with an easy-open mechanism and an 
easy-close attachment. The easy-open mechanism is either laser scored 
or mechanically scored, such that some of the package's layers are 
perforated (making the package easy to tear), while leaving the oxygen 
and moisture barriers intact (preventing contamination of the product). 
The scoring process presents significant challenges to flexible-
packaging producers. The sealing process also is difficult because the 
bags typically are filled with cheese while in a vertical position and 
the release of cheese into the bags is continuous and fast.
    Specialized films are designed specifically for shredded natural 
cheese packaged for retail sale. A small but significant increase in 
the price of flexible-packaging rollstock for shredded natural cheese 
packaged for retail sale likely would not cause customers faced with 
such an increase to switch to other forms of packaging, or otherwise 
purchase sufficiently less of the product, so as to render the price 
increase unprofitable. Accordingly, the United States has alleged that 
flexible-packaging rollstock for shredded natural cheese packaged for 
retail sale is a line of commerce and a relevant product market within 
the meaning of Section 7 of the Clayton Act.
b. Flexible-Packaging Shrink Bags for Fresh Meat
    Several characteristics are common to most flexible packaging films 
for fresh meat (i.e., beef, veal, pork, and lamb). First, most films 
for fresh meat contain a layer that prevents oxygen from coming into 
contact with the meat. Second, fresh meat films must prevent moisture 
from leaking out and contaminants from entering the packaging. Third, 
fresh meat films must run effectively on the customer's packaging 
equipment. Finally, the sealant must bond through fatty and oily 
substances.
    The most common type of flexible packaging film for fresh meat is a 
shrink bag, which is designed to shrink to the contours of the contents 
when heated, forming a tight seal. Shrink bags are particularly 
suitable for use with fresh meat, in particular for wholesale 
distribution of meat to be cut for retail sale in grocery stores. 
Shrink bags used for fresh meat must be durable enough to survive the 
rigors of distribution while maintaining its oxygen and moisture 
barriers and allowing the meat to retain its flavor. The bag must also 
meet shelf-life requirements of 30 days or more and, when used for 
retail packaging, have a high degree of transparency for optimal 
presentation.
    A small but significant increase in the price of flexible-packaging 
shrink bags for fresh meat likely would not cause customers faced with 
such an increase to substitute to other forms of packaging, or 
otherwise purchase sufficiently less of the product, so as to render 
the price increase unprofitable.

[[Page 9941]]

Accordingly, the United States has alleged that flexible-packaging 
shrink bags for fresh meat constitute a line of commerce and a relevant 
product market within the meaning of Section 7 of the Clayton Act.
i. Relevant Geographic Market
    Producers of the Relevant Products ship the products to customers 
throughout the United States and Canada. Producers outside the United 
States and Canada are not good alternatives for customers in the United 
States and Canada, and producers outside the United States and Canada 
have not been able to obtain significant business from customers in the 
United States and Canada. Customers using producers outside the United 
States and Canada would face longer lead times and an increased 
potential for supply-chain complications. Moreover, major customers 
demand that producers of flexible packaging provide frequent technical 
and operational service and support at the customer's premises and do 
not believe that foreign suppliers can provide the level of service and 
support they demand. A small but significant increase in the price of 
the Relevant Products in the United States and Canada would not cause a 
sufficient number of customers in the United States and Canada to turn 
to manufacturers of the Relevant Products outside the United States and 
Canada so as to make such a price increase unprofitable. Accordingly, 
the United States has alleged that the United States and Canada 
comprise a relevant geographic market within the meaning of Section 7 
of the Clayton Act.
3. Anticompetitive Effects
a. Flexible-Packaging Rollstock for Chunk and Sliced Natural Cheese 
Packaged for Retail Sale
    Bemis and Alcan dominate sales of flexible-packaging rollstock for 
chunk and sliced natural cheese packaged for retail sale. Due to 
Bemis's and Alcan's collective overall expertise in meeting the needs 
of customers and other technical and commercial factors for flexible-
packaging rollstock for chunk and sliced natural cheese packaged for 
retail sale, including, among other things, price, delivery times, 
service, and technical support, Bemis and Alcan frequently are 
perceived by each other, by other bidders, and by customers as being 
the two strongest competitors in that market. Currently, Bemis and 
Alcan account for approximately 37 and 54 percent, respectively, of 
sales in the United States and Canada for this product. Absent the 
divestitures, Bemis and Alcan combined would account for approximately 
91 percent of sales in the United States and Canada for this product.
    Market shares are best measured using revenues in the markets for 
the Relevant Products because suppliers with the capacity to produce 
similar goods outside of those markets cannot quickly and easily shift 
that capacity to supply customers with the Relevant Products. Thus, the 
mere possession of similar capacity does not make a supplier an 
``uncommitted entrant'' as that term is used in the Horizontal Merger 
Guidelines; meeting the requirements of customers in a cost-efficient 
manner also requires specialized know-how, experience, qualification, 
and the ability to innovate.
    Bemis's bidding behavior often has been constrained by the threat 
of losing business to Alcan. By eliminating Alcan, Bemis would gain the 
incentive and likely ability to profitably increase its bid prices 
higher than it otherwise would without the acquisition. Customers have 
also benefitted from competition between Bemis and Alcan through higher 
quality, better supply-chain options (including delivery times and 
volume-purchase requirements), technical support, and numerous 
innovations. The combination of Bemis and Alcan would eliminate this 
other competition and future benefits to the customers.
    The proposed acquisition, therefore, likely would substantially 
lessen competition in the United States and Canada for flexible-
packaging rollstock for chunk and sliced natural cheese packaged for 
retail sale, which likely would lead to higher prices, lower quality, 
less favorable supply-chain options, reduced technical support, and 
less innovation, in violation of Section 7 of the Clayton Act.
b. Flexible-Packaging Rollstock for Shredded Natural Cheese Packaged 
for Retail Sale
    Bemis and Alcan are two of only a few credible competitors that 
might successfully bid to supply a customer with flexible packaging 
rollstock for shredded natural cheese packaged for retail sale. 
Although other flexible packaging suppliers market competing products, 
customers have stated that Bemis's and Alcan's products are 
technologically superior to other available packaging and have uniquely 
effective features (e.g., easy-open and reclose mechanisms). Bemis and 
Alcan have also massed a collective expertise in meeting the needs of 
customers with respect to price, delivery times, service, technical 
support, scale, breadth of product offering, and new product 
development that other competitors have not been able to match. 
Therefore, Bemis and Alcan frequently are perceived by each other, by 
other bidders, and by customers as being the two strongest competitors 
in that market. Currently, Bemis and Alcan account for approximately 27 
and 49 percent, respectively, of sales in the United States and Canada 
for this product. Absent the divestitures, Bemis and Alcan combined 
would account for approximately 76 percent of sales in the United 
States and Canada for this product.
    Market shares are best measured using revenues in the markets for 
the Relevant Products because suppliers with the capacity to produce 
similar goods outside of those markets cannot quickly and easily shift 
that capacity to supply customers with the Relevant Products. Thus, the 
mere possession of similar capacity does not make a supplier an 
``uncommitted entrant'' as that term is used in the Horizontal Merger 
Guidelines; meeting the requirements of customers in a cost-efficient 
manner also requires specialized know-how, experience, qualification, 
and the ability to innovate.
    Bemis's bidding behavior often has been constrained by the threat 
of losing business to Alcan. By eliminating Alcan, Bemis would gain the 
incentive and ability to profitably increase its bid prices higher than 
it otherwise would without the acquisition. Customers have also 
benefitted from competition between Bemis and Alcan through higher 
quality, better supply-chain options, better technical support, and 
numerous innovations. The combination of Bemis and Alcan would 
eliminate this other competition and future benefits to the customers.
    The proposed acquisition, therefore, likely would substantially 
lessen competition in the United States and Canada for flexible-
packaging rollstock for shredded natural cheese packaged for retail 
sale, which likely would lead to higher prices, lower quality, less 
favorable supply-chain options, reduced technical support, and less 
innovation, in violation of Section 7 of the Clayton Act.
c. Flexible-Packaging Shrink Bags for Fresh Meat
    Currently, Bemis and Alcan account for approximately 20 and 8 
percent, respectively, of the sales in the United States and Canada for 
flexible-packaging shrink bags for fresh meat. If the proposed 
acquisition is not enjoined, Bemis and Alcan combined would account for 
approximately 28 percent of

[[Page 9942]]

sales of flexible-packaging shrink bags for fresh meat in the United 
States and Canada, and leave Bemis and one other firm with over 90 
percent of sales.
    Market shares are best measured using revenues in the markets for 
the Relevant Products because suppliers with the capacity to produce 
similar goods outside of those markets cannot quickly and easily shift 
that capacity to supply customers with the Relevant Products. Thus, the 
mere possession of similar capacity does not make a supplier an 
``uncommitted entrant'' as that term is used in the Horizontal Merger 
Guidelines; meeting the requirements of customers in a cost-efficient 
manner also requires specialized know-how, experience, qualification, 
and the ability to innovate.
    Although the third supplier of flexible-packaging shrink bags for 
fresh meat is the dominant supplier, some customers desire two or more 
suppliers. As a result, Bemis and Alcan often find themselves competing 
to be the second supplier, and their price competition exerts pricing 
pressure also on the dominant firm. Unless the proposed acquisition is 
enjoined, that bidding dynamic would be eliminated because Bemis and 
Alcan no longer would bid against one another. In addition, Bemis's 
elimination of Alcan as an independent competitor would result in only 
two suppliers accounting for nearly all of the market. Such an increase 
in concentration likely would make coordination more likely.
    The proposed acquisition, therefore, likely would substantially 
lessen competition in the United States and Canada for flexible-
packaging shrink bags for fresh meat, which likely would lead to higher 
prices, lower quality, less favorable supply-chain options, reduced 
technical support, and less innovation, in violation of Section 7 of 
the Clayton Act.
d. Entry
    Some customers in the United States and Canada have attempted to 
procure suitable flexible-packaging rollstock for chunk, sliced, and 
shredded natural cheese packaged for retail sale from producers that do 
not currently produce packaging for these uses. Similarly, some 
customers in the United States and Canada have attempted to procure 
suitable flexible-packaging shrink bags for fresh meat from producers 
beyond Bemis and Alcan and the dominant producer. Most of those 
flexible-packaging producers have not been able cost-effectively to 
achieve the required specifications or quality requirements. These 
suppliers likely would not be able to meet customers' required 
specifications or quality requirements cost-effectively within a 
commercially reasonable period of time, nor would they likely be able 
to produce Relevant Products that would run efficiently on their 
customers' packaging equipment. Indeed, many customers who have looked 
for alternative suppliers have not been able to find credible 
competitors other than Bemis, Alcan, and, in the case of flexible-
packaging shrink bags for fresh meat, the aforementioned dominant 
producer.
    New entry into the markets for Relevant Products in the United 
States and Canada would be costly, difficult, and time consuming. A new 
supplier would need to construct production lines capable of producing 
films that meet the rigorous standards set forth by major buyers of 
such films. Construction of manufacturing facilities would require 
millions of dollars of capital investment, and the entrant would have 
to be committed to research and development. In addition, the technical 
know-how necessary to design and successfully manufacture packaging 
that is able to run efficiently on customers' equipment cost-
effectively is difficult to obtain.
    Even after a new entrant has developed the capability to supply the 
Relevant Products, the entrant must be qualified by potential 
customers, demonstrating that it is capable of manufacturing products 
that meet rigorous quality and performance standards. For example, 
because the qualifying process for natural cheese typically requires a 
shelf-life test, where sample products are wrapped in the candidate 
packaging and stored in retail-like conditions for extended periods of 
time, the process can take many months. Further, there is no guarantee 
that the attempted qualification will be successful, and the potential 
entrants may have to repeat the process multiple times. In some cases, 
the qualification process has taken multiple years and in other cases 
has failed repeatedly. Moreover, because customer specifications are 
unique, qualification with one customer does not guarantee 
qualification with another.
    Entry of existing packaging firms that do not currently produce 
Relevant Products is also unlikely because the technical know-how 
necessary to create the Relevant Products is difficult to obtain. Also, 
a company would have to pass each customer's rigorous qualification 
tests. Entry by new firms or by existing packaging firms into the 
markets for Relevant Products, therefore, likely would not be timely, 
likely, and sufficient to defeat a small but significant post-
acquisition increase in price in the relevant markets.

III. Explanation of the Proposed Final Judgment

    The divestitures required by the proposed Final Judgment will 
eliminate the anticompetitive effects that would otherwise likely 
result from Bemis's acquisition of the Alcan Packaging Food Americas 
business. These divestitures will preserve competition in the markets 
for the Relevant Products by creating an additional independent, 
economically viable competitor to Bemis in the United States and Canada 
for each of the Relevant Products.
    The Final Judgment requires the divestiture of the entire business 
that currently produces the Alcan Relevant Products, which includes all 
of the intangible and non-plant tangible assets associated with those 
products, as well as two of the four plants currently producing those 
products. The divestiture of the intangible assets associated with the 
Alcan Relevant Products is critically important, as it is difficult to 
obtain the know-how necessary to design and successfully manufacture 
packaging that is able to run efficiently on customers' equipment. The 
divestiture package must also include plants that are already 
successful in producing the Relevant Products, as the know-how required 
to create competitive packaging includes specialized knowledge of the 
equipment used in producers' and customers' plants. The collective 
knowledge and experience of the plant management and employees will 
enable an Acquirer to compete successfully with Bemis for the 
manufacture and sale of the Relevant Products. Divestiture of all the 
plants currently producing the Alcan Relevant Products is not necessary 
to remedy the competitive issues presented by the Transaction, however; 
once a critical base of knowledge and experience regarding the 
production of the Relevant Products is attained, an Acquirer will be 
able to create or expand its own physical facilities to accommodate its 
business.
    To this end, the divestiture assets include: (1) All tangible 
assets used exclusively or primarily for the research and development 
of any Alcan Relevant Product in the United States or Canada; (2) all 
records and documents relating to any Alcan Relevant Product in the 
United States or Canada; (3) all intangible assets used exclusively or 
primarily in the design, development, production, marketing, servicing, 
distribution, or sale of any Alcan Relevant Product in the United 
States or Canada; and (4) with respect to any

[[Page 9943]]

intangible assets not included in (3), above, and that prior to the 
filing of the Complaint in this matter were used in connection with the 
design, development, production, marketing, servicing, distribution, or 
sale of both any Alcan Relevant Product and any other Alcan product, a 
non-exclusive, non-transferable license for such intangible assets to 
be used for the design, development, marketing, servicing, 
distribution, or sale of any of the Relevant Products or the operation 
or use of the plants to be divested. These assets are to be divested 
regardless of whether they are currently used at the plants to be 
divested.
    The proposed Final Judgment also requires the divestiture of two of 
the four plants currently manufacturing the Alcan Relevant Products. 
The first of these plants is the Alcan facility located at 905 W. 
Verdigris Parkway, Catoosa, Oklahoma (the ``Catoosa facility''), which 
exclusively produces flexible-packaging shrink bags for fresh meat. The 
second plant is the Alcan facility located at 271 River Street, 
Menasha, Wisconsin (the ``Menasha facility''), which produces both 
flexible-packaging rollstock for chunk and sliced natural cheese 
packaged for retail sale and flexible-packaging rollstock for shredded 
natural cheese packaged for retail sale. The Menasha facility also 
contains a wax-coating operation that is not associated with the 
Relevant Products and will be moved by Bemis to another of its plants.
    The other two plants currently producing Alcan Relevant Products 
are the Alcan facility located at 901 Morrison Drive, Boscobel, 
Wisconsin (the ``Boscobel facility'') and the Alcan facility located at 
1500 East Aurora Avenue, Des Moines, Iowa (the ``Des Moines 
facility''). The Boscobel facility produces flexible-packaging 
rollstock for shredded natural cheese packaged for retail sale and 
packaging for processed meat (which is not a Relevant Product), while 
the Des Moines facility produces flexible packaging shrink bags for 
fresh meat and packaging for processed meat (which is not a Relevant 
Product). The Boscobel and Des Moines facilities produce such a 
substantial quantity of non-Relevant Products that a divestiture of 
those plants likely would require either that the plant be split, with 
both Bemis and the Acquirer occupying the plant for a significant 
period of time, or that a significant amount of business involving non-
Relevant Products be transferred to the Acquirer.
    By contrast, the Catoosa facility exclusively produces Relevant 
Products, and the Menasha facility, while also containing a non-
relevant wax-coating operation, is uniquely situated because the wax-
coating operation is largely confined to a discrete area of the plant 
and can be moved by Bemis to another facility with minimal disturbance 
to the Acquirer. The proposed Final Judgment requires, therefore, 
divestiture of the Catoosa facility and all related assets, and of the 
Menasha facility and all related assets, with the exception of the wax-
coating operation.
    The only near-term issue created by the fact that Bemis will be 
divesting only two of the plants currently producing the Relevant 
Products is that the Acquirer(s) may not immediately have the capacity 
to produce the quantities of Relevant Products currently demanded by 
customers. Thus, supply and transition services agreements are 
contemplated in the proposed Final Judgment to allow the Acquirer(s) 
time to build or adapt its own facilities to accommodate the new 
production.
    First, because the Alcan shrink bag product known as ``Maraflex'' 
is not produced at either the Menasha facility or the Catoosa facility, 
supply and transition services agreements may be necessary to ensure 
that the Acquirer will be able immediately to provide Maraflex products 
to customers. Therefore, the proposed Final Judgment provides that, at 
the option of the Acquirer of the assets relating to the Maraflex 
products, Bemis shall enter into a supply contract with that Acquirer 
for Maraflex products sufficient to satisfy that Acquirer's obligations 
under any customer contract for a period of up to one (1) year. The 
United States, in its sole discretion, may approve an extension of the 
term for a period of up to two (2) additional years. In addition, at 
the option of the Acquirer of the assets relating to Maraflex products, 
Bemis shall enter into a transition services agreement with that 
Acquirer sufficient to meet all or part of that Acquirer's needs for 
assistance in matters relating to the development, production, and 
service of the Maraflex products or technology for a period of at least 
six (6) months, but no longer than three (3) years.
    Second, the proposed Final Judgment provides for a supply agreement 
relating to the provision of flexible-packaging rollstock for shredded 
natural cheese packaged for retail sale. Currently, flexible-packaging 
rollstock for shredded natural cheese is produced in the Menasha 
facility and the Boscobel facility. While the Menasha facility will be 
divested to an Acquirer, the Boscobel facility will be retained by 
Bemis. As a consequence, an Acquirer's ability immediately to produce 
flexible-packaging rollstock for shredded natural cheese may not be 
sufficient to satisfy the Acquirer's existing supply obligations or to 
allow the Acquirer to expand the business in competition with Bemis. 
Therefore, the proposed Final Judgment provides that, at the option of 
the Acquirer of the Menasha facility, Bemis shall enter into a supply 
contract with that Acquirer for any Relevant Product produced at the 
Boscobel facility, sufficient to satisfy that Acquirer's obligations 
under any customer contract for a period of up to one (1) year. The 
United States, in its sole discretion, may approve an extension of the 
term of this supply contract for a period of up to one (1) additional 
year.
    Third, because Bemis will retain the wax-coating operation 
currently housed in the Menasha facility and move it to another of its 
plants after the Transaction is closed, the proposed Final Judgment 
requires that the Acquirer of the Menasha facility enter into an 
agreement with Bemis permitting Bemis to occupy the portions of the 
Menasha facility utilized for the wax-coating operation for a period of 
no longer than three (3) years after the date the Transaction is 
closed. Also, at the option of Bemis, the Acquirer of the Menasha 
facility will be required to enter into an agreement with Bemis to 
provide Bemis with rotogravure printing services for the wax-coating 
operation at the Menasha facility for a period of up to twelve (12) 
months.
    Finally, the proposed Final Judgment provides for a supply 
agreement relating to ``Clearshield,'' which is another Alcan shrink 
bag product. Clearshield is produced exclusively at the Catoosa 
facility, which is to be divested. However, as a part of the 
Transaction, Bemis will be acquiring an obligation to supply 
Clearshield to certain of Alcan's South American and New Zealand 
affiliates. In order to allow Bemis to meet those obligations, the 
proposed Final Judgment provides that, at the option of Bemis, the 
Acquirer of the Catoosa facility shall enter into a supply contract for 
the Clearshield products sufficient to satisfy Alcan's or Bemis's 
obligations to Alcan's South American and New Zealand affiliates for a 
period of up to one (1) year. The United States, in its sole 
discretion, may approve an extension of the term of this supply 
contract for a period of up to two (2) years. In addition, to allow 
Bemis to continue to supply the Clearshield products to those 
affiliates in the future, the proposed Final Judgment provides that, at 
the option of Bemis, the Acquirer of the assets relating to the

[[Page 9944]]

Clearshield products shall enter into an agreement to provide Bemis 
with a non-exclusive, non-transferable license to enable Bemis to 
produce the Clearshield products for sale outside the United States and 
Canada. These agreements, along with the divestiture of the assets 
described previously, will ensure that the Acquirer(s) will be able to 
immediately and fully compete with Bemis for the production and sale of 
Relevant Products.
    The proposed Final Judgment also provides that, at the option of 
Bemis, the Acquirer(s) must enter into an agreement to provide Bemis 
with a non-exclusive, non-transferable license for the intangible 
assets used primarily in the design, development, production, 
marketing, servicing, distribution, or sale of any Alcan Relevant 
Product in the United States or Canada that, prior to the filing of the 
Complaint in this matter, were also used in connection with any other 
Alcan product. Any such license, however, is to be granted for use 
solely in connection with products other than the Alcan Relevant 
Products. Bemis will have no rights to the intangible assets used 
exclusively in the design, development, production, marketing, 
servicing, distribution, or sale of any Alcan Relevant Product in the 
United States or Canada.
    In addition, because certain of the intangible assets to be 
divested currently are encumbered by existing third-party rights, the 
proposed Final Judgment provides that the Acquirer of any asset thus 
encumbered must enter into an agreement with the affected third party 
to provide it with a right to that asset under terms and conditions 
sufficient to satisfy defendants' obligations to that third party.
    Bemis is also required to provide the Acquirer(s) of the 
divestiture assets information relating to personnel involved in the 
design, development, production, marketing, servicing, distribution, or 
sale of the Alcan Relevant Products to enable them to make offers of 
employment, and prevents Bemis, Rio Tinto or Alcan from interfering 
with any negotiations by the Acquirer(s) to employ any employee whose 
primary responsibility is the design, development, production, 
marketing, servicing, distribution, or sale of the Alcan Relevant 
Products. The proposed Final Judgment further requires Bemis, Rio 
Tinto, and Alcan to waive all noncompete agreements for any current or 
former Alcan employee involved in the design, development, production, 
marketing, servicing, distribution, or sale of any Alcan Relevant 
Product.
    In addition, Bemis may not solicit business for any Relevant 
Product that is subject to an unexpired Alcan customer contract 
transferred to an Acquirer for a period of one (1) year from the date 
of the divestiture or the remaining term of the contract, whichever is 
shorter. This provision is necessary to ensure that the Acquirer has 
the full benefit of the transferred contracts and the time to 
demonstrate its ability to independently produce the Relevant Products. 
This provision does not prevent a customer from seeking alternative 
suppliers at any time that it chooses, subject to the terms and 
conditions of its own contract.
    The assets required to be divested must be divested in such a way 
as to satisfy the United States in its sole discretion that these 
assets can and will be operated by the Acquirer(s) as viable, ongoing 
businesses that can compete effectively in the design, development, 
production, marketing, servicing, distribution, or sale of the Alcan 
Relevant Products in the United States and Canada. These assets may be 
divested to one or more Acquirers, provided that the asset listed in 
paragraphs II(E)(2) of the proposed Final Judgment (the Menasha 
facility) is divested to the same purchaser as any tangible or 
intangible assets related to the design, development, production, 
marketing, servicing, distribution, or sale of the Alcan Relevant 
Products produced at the Boscobel facility. Defendants must take all 
reasonable steps necessary to accomplish the divestitures quickly and 
shall cooperate with prospective purchasers.
    In the event that defendants do not accomplish the divestiture 
within ninety (90) days after the filing of the Complaint, or five (5) 
days after notice of the entry of the Final Judgment of the Court, 
whichever is later, the Final Judgment provides that the Court will 
appoint a trustee selected by the United States to effect the 
divestiture. If a trustee is appointed, the proposed Final Judgment 
provides that Bemis will pay all costs and expenses of the trustee. The 
trustee's commission will be structured so as to provide an incentive 
for the trustee based on the price and terms obtained and the speed 
with which the divestiture is accomplished. After his or her 
appointment becomes effective, the trustee will file monthly reports 
with the Court and the United States setting forth his or her efforts 
to accomplish the divestiture. At the end of six (6) months, if the 
divestiture has not been accomplished, the trustee and the United 
States will make recommendations to the Court, which shall enter such 
orders as appropriate, in order to carry out the purpose of the trust, 
including extending the trust or the term of the trustee's appointment.
    The divestiture provisions of the proposed Final Judgment will 
eliminate the anticompetitive effects that likely would result if Bemis 
acquired the Alcan Packaging Food Americas business because the 
Acquirer(s) will have the ability to design, develop, produce, market, 
service, distribute, and sell the Alcan Relevant Products in the United 
States and Canada, in competition with Bemis.

IV. Remedies Available to Potential Private Litigants

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

V. Procedures Available for Modification of the Proposed Final Judgment

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

[[Page 9945]]

Register. Written comments should be submitted to: Maribeth Petrizzi, 
Chief, Litigation II Section, Antitrust Division, United States 
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

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against defendants. The 
United States could have continued the litigation and sought 
preliminary and permanent injunctions preventing Bemis's acquisition of 
the Alcan Packaging Food Americas business. The United States is 
satisfied, however, that the divestiture of the assets described in the 
proposed Final Judgment will preserve competition for the design, 
development, production, marketing, servicing, distribution, and sale 
of the Relevant Products in the United States and Canada. Thus, the 
proposed Final Judgment would achieve all or substantially all of the 
relief the United States would have obtained through litigation, but 
avoids the time, expense, and uncertainty of a full trial on the merits 
of the Complaint.

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

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

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

15 U.S.C. 16(e)(1)(A)-(B). In considering these statutory factors, the 
court's inquiry is necessarily a limited one as the government is 
entitled to ``broad discretion to settle with the defendant within the 
reaches of the public interest.'' United States v. Microsoft Corp., 56 
F.3d 1448, 1461 (D.C. Cir. 1995); see generally United States v. SBC 
Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) (assessing public 
interest standard under the Tunney Act); United States v. InBev N.V./
S.A., 2009-2 Trade Cas. (CCH) ] 76,736, 2009 U.S. Dist. LEXIS 84787, 
No. 08-1965 (JR), at *3 (D.D.C. Aug. 11, 2009) (noting that the court's 
review of a consent judgment is limited and only inquires ``into 
whether the government's determination that the proposed remedies will 
cure the antitrust violations alleged in the complaint was reasonable, 
and whether the mechanism to enforce the final judgment are clear and 
manageable.'').
    As the United States Court of Appeals for the District of Columbia 
has held, under the APPA a court considers, among other things, the 
relationship between the remedy secured and the specific allegations 
set forth in the government's complaint, whether the decree is 
sufficiently clear, whether enforcement mechanisms are sufficient, and 
whether the decree may positively harm third parties. See Microsoft, 56 
F.3d at 1458-62. With respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F.2d 456, 462 (9th Cir. 1988) (citing United States v. Bechtel 
Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see also Microsoft, 56 F.3d 
at 1460-62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 
(D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787, at *3. Courts have 
held that:

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

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

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

    Courts have greater flexibility in approving proposed consent 
decrees than in crafting their own decrees following a finding of 
liability in a litigated matter. ``[A] proposed decree must be approved 
even if it falls short of the remedy the court would impose on its own, 
as long as it falls within the range of acceptability or is `within the 
reaches of public interest.' '' United States v. Am. Tel. & Tel. Co., 
552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United 
States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd 
sub nom. Maryland v. United States, 460 U.S. 1001 (1983); see also 
United States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 
1985) (approving the consent decree even though the court would have 
imposed a greater remedy). Therefore, the United States ``need only 
provide a factual basis for concluding that the settlements are 
reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 489 
F. Supp. 2d at 17.
    Moreover, the court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459; see also InBev, 2009 
U.S.

[[Page 9946]]

Dist. LEXIS 84787, at *20 (``the `public interest' is not to be 
measured by comparing the violations alleged in the complaint against 
those the court believes could have, or even should have, been 
alleged''). Because the ``court's authority to review the decree 
depends entirely on the government's exercising its prosecutorial 
discretion by bringing a case in the first place,'' it follows that 
``the court is only authorized to review the decree itself,'' and not 
to ``effectively redraft the complaint'' to inquire into other matters 
that the United States did not pursue. Microsoft, 56 F.3d at 1459-60. 
As this Court confirmed in SBC Communications, courts ``cannot look 
beyond the complaint in making the public interest determination unless 
the complaint is drafted so narrowly as to make a mockery of judicial 
power.'' 489 F. Supp. 2d at 15.
    In its 2004 amendments to the Tunney Act,\3\ Congress made clear 
its intent to preserve the practical benefits of utilizing consent 
decrees in antitrust enforcement, stating: ``[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). The language wrote into the statute what Congress 
intended when it enacted the Tunney Act in 1974, as Senator Tunney 
explained: ``[t]he court is nowhere compelled to go to trial or to 
engage in extended proceedings which might have the effect of vitiating 
the benefits of prompt and less costly settlement through the consent 
decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of Senator 
Tunney). Rather, the procedure for the public interest determination is 
left to the discretion of the court, with the recognition that the 
court's ``scope of review remains sharply proscribed by precedent and 
the nature of Tunney Act proceedings.'' SBC Commc'ns, 489 F. Supp. 2d 
at 11.\4\
---------------------------------------------------------------------------

    \3\ The 2004 amendments substituted the word ``shall'' for 
``may'' when directing the courts to consider the enumerated factors 
and amended the list of factors to focus on competitive 
considerations and address potentially ambiguous judgment terms. 
Compare 15 U.S.C. 16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see 
also SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004 
amendments ``effected minimal changes'' to Tunney Act review).
    \4\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the 
court to make its public interest determination on the basis of the 
competitive impact statement and response to comments alone''); 
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ] 
61,508, at 71,980 (W.D. Mo. 1977) (``Absent a showing of corrupt 
failure of the government to discharge its duty, the Court, in 
making its public interest finding, should * * * carefully consider 
the explanations of the government in the competitive impact 
statement and its responses to comments in order to determine 
whether those explanations are reasonable under the 
circumstances.''); S. Rep. No. 93-298, 93d Cong., 1st Sess., at 6 
(1973) (``Where the public interest can be meaningfully evaluated 
simply on the basis of briefs and oral arguments, that is the 
approach that should be utilized.'').
---------------------------------------------------------------------------

VIII. Determinative Documents

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

Dated: February 24, 2010.

Respectfully submitted.

Rachel J. Adcox,
U.S. Department of Justice, Antitrust Division, Litigation II 
Section, 450 Fifth Street, NW., Suite 8700, Washington, DC 20530, 
(202) 305-2738.

Certificate of Service

    I, Rachel J. Adcox, hereby certify that on February 24, 2010, I 
caused a copy of the foregoing Competitive Impact Statement to be 
served upon defendants Bemis Company, Inc., Rio Tinto plc, and Alcan 
Corporation by mailing the documents electronically to the duly 
authorized legal representatives of defendants as follows:

Counsel for Defendant Bemis Company, Inc.:
    Stephen M. Axinn, Esq., John D. Harkrider, Esq., Axinn, Veltrop & 
Harkrider LLP, 114 West 47th Street, New York, NY 10036, (212) 728-
2200, <a href="/cdn-cgi/l/email-protection#c4b7a9a584a5b2aca8a5b3eaa7aba9"><span class="__cf_email__" data-cfemail="6f1c020e2f0e1907030e18410c0002">[email protected]</span></a>, <a href="/cdn-cgi/l/email-protection#056f616d4564736d6964722b666a68"><span class="__cf_email__" data-cfemail="a7cdc3cfe7c6d1cfcbc6d089c4c8ca">[email protected]</span></a>.
Counsel for Defendants Rio Tinto plc and Alcan Corporation:
    Steven L. Holley, Esq., Bradley P. Smith, Esq., Sullivan & Cromwell 
LLP, 125 Broad Street, New York, NY 10004, (212) 558-4737, 
<a href="/cdn-cgi/l/email-protection#eb838487878e9298ab989e878788998486c5888486"><span class="__cf_email__" data-cfemail="543c3b3838312d27142721383837263b397a373b39">[email protected]</span></a>, <a href="/cdn-cgi/l/email-protection#e596888c918d8797a59690898986978a88cb868a88"><span class="__cf_email__" data-cfemail="2c5f414558444e5e6c5f5940404f5e4341024f4341">[email protected]</span></a>.

Rachel J. Adcox, Esq.,
United States Department of Justice, Antitrust Division, Litigation 
II Section, 450 Fifth Street, NW., Suite 8700, Washington, DC 20530, 
(202) 616-3302.

[FR Doc. 2010-4550 Filed 3-3-10; 8:45 am]
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