In the Matter of

MAHLE GMBH,

a corporation,

MAHLE, INC.,

a corporation,

METAL LEVE, S.A.,

a corporation, and

METAL LEVE, INC.,

a corporation.

 UNITED STATES OF AMERICA 9610085 

 

 BEFORE FEDERAL TRADE COMMISSION B220486

Commissioners: Robert Pitofsky, Chairman

Mary L. Azcuenaga

Janet D. Steiger

Roscoe B. Starek, III

Christine A. Varney

DOCKET NO. C-3746

DECISION AND ORDER

The Federal Trade Commission (“Commission”), having initiated an investigation of the

acquisition by Mahle GmbH, the parent corporation of Mahle, Inc., of more than 50 percent of

the voting securities of Metal Leve, S.A., the parent corporation of Metal Leve, Inc., and having

been furnished thereafter with a copy of a draft of complaint which the Bureau of Competition

proposed to present to the Commission for its consideration and which, if issued by the

Commission, would charge respondents with a violation of Section 5 of the Federal Trade

Commission Act, as amended, 15 U.S.C. § 45, and a violation of Section 7 of the Clayton Act, as

amended, 15 U.S.C. § 18; and 

The respondents, their attorneys, and counsel for the Commission having thereafter

executed an agreement containing a consent order, an admission by the respondents of all the

jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said

agreement is for settlement purposes only and does not constitute an admission by respondents

that the law has been violated as alleged in such complaint, and waivers and other provisions as

required by the Commission's Rules; and
2

The Commission, having thereafter considered the matter and having determined that it had

reason to believe that the respondents have violated the said Acts, and that a complaint should

issue stating its charges in that respect, and having thereupon accepted the executed consent

agreement and placed such agreement on the public record for a period of sixty (60) days, and

having duly considered a comment filed thereafter, and having modified paragraph II.A. in one

respect, now in further conformity with the procedure prescribed in § 2.34 of its Rules, the

Commission hereby issues its complaint, makes the following jurisdictional findings and enters the

following order:

1. Respondent Mahle GmbH is a corporation organized, existing and doing business

under and by virtue of the laws of Germany, with its office and principal place of business located

at Pragstrasse 26-46, D-70376 Stuttgart, Germany.

2. Respondent Mahle, Inc. is a corporation organized, existing and doing business under

and by virtue of the laws of Delaware, with its office and principal place of business located at

1 Mahle Drive, Morristown, Tennessee 37815-0798.

3. Respondent Metal Leve, S.A. is a corporation organized, existing and doing business

under and by virtue of the laws of Brazil, with its office and principal place of business located at

Rua Brasilio Luz 535, Sao Paulo, SP 04746-901, Brazil.

4. Respondent Metal Leve, Inc. is a corporation organized, existing and doing business

under and by virtue of the laws of Michigan, with its office and principal place of business located

at 560 Avis Drive, Ann Arbor, Michigan 48108.

5. The Federal Trade Commission has jurisdiction of the subject matter of this

proceeding and of the respondents, and the proceeding is in the public interest.

ORDER

I

IT IS ORDERED that, as used in this Order, the following definitions shall apply:

A. “Commission” means the Federal Trade Commission.

B. “Respondents” means Mahle GmbH, Mahle, Inc., Metal Leve, S.A., and Metal Leve,

Inc., their directors, officers, employees, agents and representatives, predecessors, successors and

assigns; their subsidiaries, divisions, and groups and affiliates controlled by Mahle GmbH, Mahle,

Inc., Metal Leve, S.A., and Metal Leve, Inc., and the respective directors, officers, employees,

agents, representatives, successors, and assigns of each.
3

C. “Mahle GmbH” means Mahle GmbH, its directors, officers, employees, agents and

representatives, predecessors, successors, and assigns; its subsidiaries, divisions, groups and

affiliates controlled by Mahle GmbH, and the respective directors, officers, employees, agents,

and representatives, successors, and assigns of each.

D. “Mahle, Inc.” means Mahle, Inc., its directors, officers, employees, agents and

representatives, predecessors, successors, and assigns; its subsidiaries, divisions, groups and

affiliates controlled by Mahle, Inc., and the respective directors, officers, employees, agents, and

representatives, successors, and assigns of each.

E. “Metal Leve, S.A.” means Metal Leve, S.A., its directors, officers, employees, agents

and representatives, predecessors, successors, and assigns; its subsidiaries, divisions, groups and

affiliates controlled by Metal Leve, S.A., and the respective directors, officers, employees, agents,

and representatives, successors, and assigns of each.

F. “Metal Leve, Inc.” means Metal Leve, Inc., its directors, officers, employees, agents

and representatives, predecessors, successors, and assigns; its subsidiaries, divisions, groups and

affiliates controlled by Metal Leve, Inc., and the respective directors, officers, employees, agents,

and representatives, successors, and assigns of each.

G. “Articulated Piston” means any two-piece piston consisting of a separate crown and

skirt, as well as each individual piece of an Articulated Piston, including, but not limited to,

forgings, castings, and finished pistons.

H. “Other Diesel Piston” means any type of diesel piston, other than an Articulated

Piston, including, but not limited to, forgings, castings and finished pistons.

I. “Other Piston” means any Other Diesel Piston or other type of piston, other than an

Articulated Piston, including, but not limited to, castings and finished pistons.

J. “Metal Leve, Inc. Business” means:

1. all assets, properties, business and goodwill, tangible and intangible, of Metal

Leve, Inc., including, but not limited to:

a. the manufacturing facilities located at Orangeburg and Sumter, South

Carolina,

b. the research and development facility and corporate offices located at Ann

Arbor, Michigan; and
4

2. all assets, properties, business and goodwill, tangible and intangible, of Metal

Leve, S.A. worldwide relating to: (i) the research, development, manufacture, or sale of

Articulated Pistons or Other Pistons manufactured in the United States, (ii) the research,

development, manufacture, or sale of Articulated Pistons anywhere in the world, and (iii) the

research, development, manufacture or sale of Other Diesel Pistons sold in the United

States; including, without limitation, the following:

a. all machinery, fixtures, equipment, tools and other tangible personal

property, but excluding machinery, fixtures, and equipment located outside the United

States related to the manufacture of Other Diesel Pistons sold in the United States;

b. all rights, titles and interests in and to owned or leased real property

together with appurtenances, licenses and permits, but excluding real property located

outside the United States related to the manufacture of Other Diesel Pistons sold in the

United States or to the manufacture of Articulated Pistons sold in Brazil;

c. all inventory;

d. all customer lists, distribution agreements, vendor lists, catalogs, sales

promotion literature, and advertising materials;

e. all research materials, technical information, inventions, trade secrets,

intellectual property, patents, technology, know-how (including, but not limited to,

manufacturing know-how), specifications, designs, drawings, processes, quality

control data, and formulas, as well as licenses thereto, relating to the manufacture or

sale of Articulated Pistons;

f. all Metal Leve, S.A. research and development projects for Metal Leve,

Inc., including, but not limited to, all research materials, technical information,

inventions, trade secrets, intellectual property, patents, technology, know-how

(including, but not limited to, manufacturing know-how), specifications, designs,

drawings, processes, quality control data, and formulas, as well as licenses thereto,

relating to all such research and development projects, including, but not limited to,

the following: (i) lightweight articulated ppt, (ii) oxidation resistant steels, (iii) iron

aluminide, (iv) steel material evolution, (v) thermal barrier steel crown coatings, open

versus closed articulated gallery, (vi) analytical software development, (vii) rapid

solidification aluminum alloy, and (viii) bowl rim life prediction.

g. rights that are equal to the rights held by Metal Leve, S.A. to all research

materials, technical information, inventions, trade secrets, intellectual property,

patents, technology, know-how (including, but not limited to manufacturing know-
5

how), specifications, designs, drawings, processes, quality control data, and formulas,

as well as licenses thereto, relating to the manufacture or sale of Other Diesel Pistons

sold in the United States or Other Pistons manufactured in the United States;

h. all rights, titles and interests in and to the contracts entered into in the

ordinary course of business with customers (together with associated bid and

performance bonds), suppliers, sales representatives, distributors, agents, personal

property lessors, personal property lessees, licensors, licensees, consignors and

consignees;

i. all rights under warranties and guarantees, express or implied;

j. all books, records, and files; and

k. all items of prepaid expense.

Provided, that this definition of the Metal Leve, Inc. Business does not include

research and development conducted after the divestiture required by this Order. 

K. “Metal Leve, S.A. Piston Business” means all assets, properties, business and

goodwill, tangible and intangible, relating to the manufacture or sale of Articulated Pistons and

Other Pistons by Metal Leve, S.A. or Metal Leve, Inc. anywhere in the world, including, without

limitation, the following:

1. the Metal Leve, Inc. Business, plus all Metal Leve S.A. assets anywhere in the

world relating to research, development, manufacture or sale of Articulated Pistons or Other

Pistons, including, but not limited to:

a. the manufacturing facilities located at Santo Amaro and Limeira in Brazil,

b. the research and development facility located at Santo Amaro in Brazil;

2. all trademarks;

3. all machinery, fixtures, equipment, vehicles, transportation facilities, furniture,

tools and other tangible personal property;

4. inventory and storage capacity;

5. all customer lists, distribution agreements, vendor lists, catalogs, sales promotion

literature, and advertising materials;
6

6. exclusive rights to all research materials, technical information, inventions, trade

secrets, intellectual property, patents, technology, know-how (including, but not limited to

manufacturing know-how), specifications, designs, drawings, processes, quality control

data, and formulas relating to the manufacture of Articulated Pistons or Other Pistons by

Metal Leve;

7. all rights, titles and interests in and to owned or leased real property, together

with appurtenances, licenses and permits;

8. all rights, titles and interests in and to the contracts entered into in the ordinary

course of business with customers (together with associated bid and performance bonds),

suppliers, sales representatives, distributors, agents, personal property lessors, personal

property lessees, licensors, licensees, consignors and consignees;

9. all rights under warranties and guarantees, express or implied;

10. all books, records, and files; and

11. all items of prepaid expense.

II

IT IS FURTHER ORDERED that:

A. Respondents shall divest, absolutely and in good faith, no later than ten (10) days after

the date on which this Order becomes final, the Metal Leve, Inc. Business as a fully viable and

competitive ongoing business. Provided, however, that Metal Leve S.A. may retain a nonexclusive licence from the acquirer of the Metal Leve, Inc. Business to intellectual property for

the sole purpose of producing for Volvo Brazil and Volvo Sweden service part number P-2067 in

Brazil, and may retain the right to supply Volvo Brazil and Volvo Sweden service part number P2067. 

B. Respondents shall divest the Metal Leve, Inc. Business only to an acquirer or acquirers

that receive the prior approval of the Commission and only in a manner that receives the prior

approval of the Commission. The purpose of the divestiture of the Metal Leve, Inc. Business is to

ensure the continuation of the Metal Leve, Inc. Business as an ongoing, viable, and competitive

operation engaged in the same business of researching, developing, manufacturing, and selling

Articulated Pistons and Other Pistons, in which the Metal Leve, Inc. Business is engaged at the

time of the proposed divestiture, and to remedy the lessening of competition resulting from the

acquisition as alleged in the Commission’s complaint.
7

C. A condition of approval by the Commission of the divestiture shall be the submission

by the acquirer to the Commission of an acceptable five-year business plan for the Metal Leve,

Inc. Business demonstrating that the acquirer will establish the Metal Leve, Inc. Business as a

viable and competitive business free of all continuing relationships with Respondents in the

research, development, manufacture or sale of Articulated Pistons and Other Pistons, except as

set forth in paragraph II.D., below.

D. On reasonable notice to Metal Leve, S.A. from an approved acquirer, Metal Leve,

S.A. shall provide technical assistance and know-how to the acquirer with respect to the Metal

Leve, Inc. Business. Such technical assistance shall include, without limitation, consultation with

knowledgeable employees of Metal Leve, S.A. and training at the manufacturing facilities of

Metal Leve, S.A. Metal Leve, S.A. may charge the reasonable costs incurred in providing such

technical assistance, including reimbursement (commensurate with the salary and benefits of Metal

Leve, S.A. personnel involved) for the time plus expenses of Metal Leve, S.A. personnel

providing the technical assistance. Metal Leve, S.A. shall continue to provide such technical

assistance until the acquirer of the Metal Leve, Inc. Business is satisfied that it is capable of

producing, and of developing for production, commercially saleable Articulated Pistons and Other

Pistons utilizing the assets of the Metal Leve, Inc. Business; provided, however, Metal Leve, S.A.

shall not be required to continue providing such technical assistance and training for more than

two (2) years after the date on which the divestiture required by this Order is made.

E. Pending divestiture of the Metal Leve, Inc. Business, Respondents shall take such

actions as are reasonably necessary to maintain the viability, competitiveness, and marketability of

the Metal Leve, Inc. Business and the Metal Leve, S.A. Piston Business and to prevent the

destruction, removal, wasting, deterioration, or impairment of the Metal Leve, Inc. Business and

the Metal Leve, S.A. Piston Business.

F. Respondents shall comply with all terms of the Agreement to Hold Separate signed by

the Respondents and accepted by the Commission on August 30, 1996, which is attached to this

Order and made a part hereof, and which shall continue in effect until such time as Respondents

have accomplished the divestiture required by this Order.

III

IT IS FURTHER ORDERED that:

A. If Respondents have not divested, absolutely and in good faith and with the

Commission’s prior approval, the Metal Leve, Inc. Business within ten (10) days of the date this

Order becomes final, then the Commission may appoint a trustee to divest the Metal Leve, Inc.

Business. The trustee shall have all rights and powers necessary to permit the trustee to effect the

divestiture of the Metal Leve, Inc. Business and to add to the Metal Leve, Inc. Business all or any

part of the Metal Leve, S.A. Piston Business in order to assure the viability, competitiveness, and

marketability of the Metal Leve, Inc. Business so as to expeditiously accomplish the remedial
8

purposes of this Order. In the event the Commission or the Attorney General brings an action

pursuant to Section 5(l) of the Federal Trade Commission Act, 15 U.S.C. § 45(l), or any other

statute enforced by the Commission, Respondents shall consent to the appointment of a trustee in

such action. Neither the appointment of a trustee nor a decision not to appoint a trustee under

this Paragraph shall preclude the Commission or the Attorney General from seeking civil penalties

or any other relief (including, but not limited to, a court-appointed trustee) pursuant to the

Federal Trade Commission Act or any other statute, for any failure by any of the Respondents to

comply with this Order.

B. If a trustee is appointed by the Commission or a court pursuant to Paragraph III.A. of

this Order, Respondents shall consent to the following terms and conditions regarding the

trustee’s powers, duties, authority, and responsibilities:

1. The Commission shall select the trustee, subject to the consent of Respondents,

which consent shall not be unreasonably withheld. The trustee shall be a person with

experience and expertise in acquisitions and divestitures. If respondent has not opposed, in

writing, including the reasons for opposing, the selection of any proposed trustee within ten

(10) days after notice by the staff of the Commission to Respondents of the identity of any

proposed trustee, Respondents shall be deemed to have consented to the selection of the

proposed trustee.

2. Subject to the prior approval of the Commission, the trustee shall have the

exclusive power and authority to divest the Metal Leve, Inc. Business and shall have the

power to add to the Metal Leve, Inc. Business all or any part of the Metal Leve, S.A. Piston

Business in order to accomplish the divestiture required by this Order.

3. Within ten (10) days after appointment of the trustee, Respondents shall execute

a trust agreement that, subject to the prior approval of the Commission (and, in the case of a

court-appointed trustee, of the court), transfers to the trustee all rights and powers

necessary to permit the trustee to effect the divestiture of the Metal Leve, Inc. Business, to

add to the Metal Leve, Inc. Business all or any part of the Metal Leve, S.A. Piston Business,

and to divest such additional ancillary assets of Metal Leve S.A. and effect such additional

arrangements, in order to assure the viability, competitiveness, and marketability of the

Metal Leve, Inc. Business so as to expeditiously accomplish the remedial purposes of this

Order.

4. The trustee shall have twelve (12) months to accomplish the divestiture required

by this Order, which shall be subject to the prior approval of the Commission. If, however,

at the end of the twelve (12) month period, the trustee has submitted a plan of divestiture or

believes that divestiture can be achieved within a reasonable time, the divestiture period 
9

may be extended by the Commission (or, in the case of a court-appointed trustee, by the

court); provided, however, the Commission may extend this period for no more than two

(2) additional terms of six (6) months each.

5. The trustee shall have full and complete access to the personnel, books, records,

and facilities related to the Metal Leve, Inc. Business or the Metal Leve, S.A. Piston

Business, or to any other relevant information, as the trustee may request. Respondents

shall develop such financial or other information as such trustee may request and shall

cooperate with the trustee. Respondents shall take no action to interfere with or impede the

trustee’s accomplishment of the divestiture. Any delays in divestiture caused by the

respondent shall extend the time for divestiture under this Paragraph III in an amount equal

to the delay, as determined by the Commission (or, in the case of a court-appointed trustee,

by the court).

6. The trustee shall use his or her best efforts to negotiate the most favorable price

and terms available in each contract that is submitted to the Commission, subject to

Respondents’ absolute and unconditional obligation to divest at no minimum price. The

divestiture shall be made in the manner, and to the acquirer or acquirers, as set out in

Paragraph II of this Order; provided, however, if the trustee receives bona fide offers from

more than one acquiring entity, and if the Commission approves more than one such

acquiring entity, then the trustee shall divest to the acquiring entity or entities selected by

Respondents from among those approved by the Commission. 

7. The trustee shall serve, without bond or other security, at the cost and expense

of Respondents, on such reasonable and customary terms and conditions as the Commission

or a court may set. The trustee shall have authority to employ, at the cost and expense of

Respondents, such consultants, accountants, attorneys, investment bankers, business

brokers, appraisers, and other representatives and assistants as are necessary to carry out the

trustee’s duties and responsibilities. The trustee shall account for all monies derived from

the divestiture and all expenses incurred. After approval by the Commission (and, in the

case of a court-appointed trustee, by the court), of the account of the trustee, including fees

for his or her services, all remaining monies shall be paid at the direction of Respondents and

the trustee’s power shall be terminated. The trustee’s compensation shall be based at least

in significant part on a commission arrangement (based on sales price) contingent on the

trustee’s accomplishing the divestiture required by this Order.

8. Respondents shall indemnify the trustee and hold the trustee harmless against any

losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the

performance of the trustee’s duties, including all reasonable fees of counsel and other

expenses incurred in connection with the preparation for, or defense of any claim, whether

or not resulting in any liability, except to the extent that such liabilities, losses, damages,

claims, or expenses result from misfeasance, gross negligence, recklessness, willful or

wanton acts, or bad faith by the trustee.
10

9. If the trustee ceases to act or fails to act diligently, a substitute trustee shall be

appointed in the same manner as provided in Paragraph III.A. of this Order.

10. The Commission (or, in the case of a court-appointed trustee, the court) may on

its own initiative or at the request of the trustee issue such additional orders or directions as

may be necessary or appropriate to accomplish the divestiture required by this Order.

11. The trustee shall have no obligation or authority to operate or maintain the 

Metal Leve, Inc. Business or the Metal Leve, S.A. Piston Business.

12. The trustee shall report in writing to Respondents and the Commission every

thirty (30) days concerning the trustee’s efforts to accomplish the divestiture.

IV

IT IS FURTHER ORDERED that, for a period of ten (10) years from the date this Order

becomes final, Respondents shall not, without prior notification to the Commission, directly or

indirectly:

A. Acquire any stock, share capital, equity, or other interest in any concern,

corporate or non-corporate, engaged in the sale of Articulated Pistons or Other Pistons in

the United States within the year preceding such acquisition; provided, however, an

acquisition of securities will be exempt from the requirements of this paragraph if, after such

acquisition of securities, Respondents will hold cumulatively no more than two (2) percent

of the outstanding shares of any class of securities of such person; or 

B. Enter into any agreement or other arrangement to transfer direct or indirect

ownership, management, or control of any assets used for or previously used for (and still

suitable for use for) the manufacture or sale of Articulated Pistons or Other Pistons in the

United States; provided, however, prior notice shall not be necessary for: the acquisition of

assets in the ordinary course of business or the acquisition of assets valued at less than

$100,000 from the same person within any twelve (12) month period; or for transfers to or

from manufacturers of diesel engines.

The prior notifications required by this paragraph shall be given on the Notification and Report

Form set forth in the Appendix to Part 803 of Title 16 of the Code of Federal Regulations as

amended (hereinafter referred to as “the Notification”), and shall be prepared and transmitted in

accordance with the requirements of that part, except that: no filing fee will be required for any

such notification; notification shall be filed with the Secretary of the Commission and a copy shall

be delivered to the Bureau of Competition; notification need not be made to the United States

Department of Justice; and notification is required only of Respondents and not of any other party

to the transaction. Respondents shall provide the Notification to the Commission at least thirty

(30) days prior to the consummation of any such transaction (hereinafter referred to as the “initial
11

phase of the waiting period”). If, within the initial phase of the waiting period, the Commission or

its staff makes a written request for additional information and documentary material,

Respondents shall not consummate the transaction until at least twenty (20) days after complying

with such request for additional information and documentary material. Early termination of the

waiting periods in this paragraph may, where appropriate, be granted by letter from the Bureau of

Competition. Notwithstanding, prior notification shall not be required by this paragraph for a

transaction for which notification is required to be made, and has been made, pursuant to

Section 7A of the Clayton Act, 15 U.S.C. § 18a, and prior notification shall not be required by

this paragraph for acquisitions by Respondents Mahle GmbH or Mahle, Inc. of Metal Leve, S.A.

stock or assets.

V

IT IS FURTHER ORDERED that within thirty (30) days after the date this Order

becomes final, and every thirty (30) days thereafter until Respondents have fully complied with

the provisions of Paragraphs II and III of this Order, Respondents shall submit to the Commission

verified written reports setting forth in detail the manner and form in which Respondents intend to

comply, are complying, and have complied with Paragraphs II and III of this Order. Respondents

shall include in their compliance reports, among other things that are required from time to time, a

full description of the efforts being made to comply with Paragraphs II and III of the Order,

including a description of all substantive contacts or negotiations for the divestiture and the

identity of all parties that have contacted Respondents or that have been contacted by

Respondents. Respondents shall include in their compliance reports copies of all written

communications to and from such parties, all internal memoranda, and all reports and

recommendations concerning divestiture.

VI

IT IS FURTHER ORDERED that one (1) year from the date this Order becomes final,

annually for the next nine (9) years on the anniversary of the date this Order becomes final, and at

such other times as the Commission may require, Respondents shall file a verified written report

with the Commission setting forth in detail the manner and form in which they have complied and

are complying with Paragraph IV of this Order.

VII

IT IS FURTHER ORDERED that Respondents shall notify the Commission at least thirty

(30) days prior to any proposed change in the corporate Respondents, such as dissolution,

assignment, sale resulting in the emergence of a successor corporation, the creation or dissolution

of subsidiaries, or any other change in Mahle GmbH, Mahle, Inc., Metal Leve, S.A., or Metal

Leve, Inc. that may affect compliance obligations arising out of the Order.
12

VIII

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance

with this Order, and Respondents shall permit any duly authorized representatives of the

Commission:

A. Access, during office hours and in the presence of counsel, to inspect and copy

all books, ledgers, accounts, correspondence, memoranda and other records and documents

in the possession or under the control of Respondents relating to any matters contained in

this Order; and 

B. Upon five (5) days notice to Respondents, and without restraint or interference,

to interview officers, employees, or agents of Respondents.

By the Commission.

Benjamin I. Berman

Acting Secretary

ISSUED: June 4, 1997

SEAL
UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

______________________________

)

In the Matter of )

)

MAHLE GmbH )

a German corporation; )

)

MAHLE, INC. )

a Delaware corporation; )

) File No. 961-0085

METAL LEVE, S.A. )

a Brazilian corporation; and )

)

METAL LEVE, INC. )

a Michigan corporation. )

______________________________)

AGREEMENT TO HOLD SEPARATE

This Agreement to Hold Separate (the “Agreement”) is by and among Mahle GmbH, a

German corporation and an entity included within its “ultimate parent entity” as that term is

defined in 16 C.F.R. § 801.1(a)(3), MABEG, e.V., with its principal office and place of business

at Pragstrasse 26-46, D-70376 Stuttgart, Germany; Mahle Inc., a corporation organized and

existing under the laws of Delaware and a wholly owned subsidiary of Mahle GmbH, with its

principal office and place of business at 1 Mahle Drive, Morristown, Tennessee 37815-0798,

(collectively referred to as “Mahle”); Metal Leve, S.A., a Brazilian corporation with its principal

office and place of business at Rua Brasilo Luz 535, Sao Paolo, SP 04746-901, Brazil; Metal

Leve, Inc., a corporation and an indirect wholly owned subsidiary of Metal Leve S.A. organized

and existing under the laws of Michigan, with its principal office and place of business at 560 Avis

Drive, Ann Arbor, Michigan 48108 (collectively referred to as “Metal Leve”); and the Federal

Trade Commission (the “Commission”), an independent agency of the United States Government,

established under the Federal Trade Commission Act of 1914, 15 U.S.C. 41, et seq. (collectively,

the “Parties”).

WHEREAS, on June 11, 1996, Mahle entered into a Purchase Agreement to acquire

50.1% of the voting shares of Metal Leve S.A. (hereinafter the “Acquisition”); and
Agreement to Hold Separate Page 2

WHEREAS, this Acquisition was subject to the prior notification requirements of the Hart

Scott Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 18a (“HSR Act”); and

WHEREAS, on or before June 26, 1996, Mahle consummated the Acquisition without

MABEG, e.V. or Mahle filing notification with the Commission or the Department of Justice

pursuant to the HSR Act, and without observing the waiting periods required by that Act; and

WHEREAS, on July 22, 1996, Mahle, on behalf of MABEG, e.V. and Metal Leve

submitted filings pursuant to the HSR Act; and

WHEREAS, Mahle and Metal Leve produce pistons for sale in the United States; and

WHEREAS, the Commission is now investigating the Acquisition to determine if it

violates Section 7 of the Clayton Act, 15 U.S.C. §18; Section 5 of the FTC Act, 15 U.S.C. § 45;

or any other statute enforced by the Commission; and 

WHEREAS, the Commission is concerned that if an understanding is not reached, further

changes in the operation and organization of Metal Leve by Mahle or its nominees during the

period prior to the final resolution of the Commission’s investigation of the Acquisition, may

preclude an effective remedy; and

WHEREAS, the Commission is concerned that it is necessary to preserve the

Commission's ability to seek an effective remedy and the Commission's right to seek to restore

Metal Leve as a viable competitor; and

WHEREAS, the purpose of this Agreement is to:

(i) preserve Mahle’s and Metal Leve's piston businesses and other

businesses as viable independent businesses pending the

Commission’s investigation, and

(ii) prevent any anticompetitive effects resulting from the Acquisition;

and

WHEREAS, Mahle and Metal Leve entering into this Agreement shall in no way be

construed as an admission by Mahle or Metal Leve that the Acquisition is in violation of Section 7

of the Clayton Act or Section 5 of the FTC Act; and

WHEREAS, Mahle and Metal Leve understand that this Agreement shall in no way limit

civil penalties of up to $10,000 per day under § 7A(g)(1) of the Clayton Act for failing to file

notifications and for continuing to hold stock in violation of the HSR Act; and

WHEREAS, Mahle and Metal Leve understand that no act or transaction contemplated by
Agreement to Hold Separate Page 3

this Agreement shall be deemed immune or exempt from the provisions of the antitrust laws or the

Federal Trade Commission Act by reason of anything contained in this Agreement; and

WHEREAS, the Commission has not yet determined whether the Acquisition will be

challenged under any statute it enforces.

NOW, THEREFORE, Mahle and Metal Leve agree, in consideration of the Commission's

agreement that the Commission will not seek further relief from Mahle or Metal Leve under

Section 7A(g)(2) of the Clayton Act, 15 U.S.C. § 18(a)(g)(2), except that the Commission may

exercise any and all rights to enforce this Agreement, and, in the event that the Parties do not

comply with the terms of this Agreement, to seek further relief, as follows:

1. Mahle and Metal Leve agree to execute and be bound by this Agreement.

2. Mahle and Metal Leve agree that from the date they sign this Agreement until the

earliest of the dates listed in subparagraphs 2.a - 2.b, they will comply with the provisions of

paragraph 3 of this Agreement:

a. the expiration of all waiting periods under the HSR Act with

respect to the Acquisition;

b. such time as specified in any Consent Agreement accepted by the

Commission in resolution of antitrust concerns raised by the Acquisition.

3. Mahle will hold Metal Leve separate and apart on the following terms and

conditions:

a. Metal Leve shall be held separate and apart and shall

be operated independently of Mahle (meaning here

and hereinafter, Mahle excluding Metal Leve) except

to the extent that Mahle must exercise direction and

control over Metal Leve to assure compliance with

this Agreement;

b. Mahle shall place its Metal Leve shares in trust

pending the outcome of the Commissions

investigation, and shall not vote those shares or in

any other manner exercise control over Metal Leve; 

c. Mahle shall not exercise direction or control over, or

influence directly or indirectly, Metal Leve or any of

its operations or businesses, and Metal Leve shall

not receive direction from Mahle;
Agreement to Hold Separate Page 4

d. Mahle and Metal Leve shall maintain the viability

and marketability of Metal Leve as a separate entity

and shall not reorganize its operations in any way

that would reduce the value or competitiveness of

Metal Leve or Metal Leve Inc.’s business;

e. Mahle shall not permit any director, officer,

employee, consultant or agent of Mahle, or any

person affiliated with or associated with Mahle, to

also be a director, officer, or employee of Metal

Leve;

f. No Mahle employees, consultants, or agents shall

consult with, advise on, or participate in any manner

in the planning or conduct of Metal Leve operations;

g. Except as required by law, and except to the extent

necessary information is exchanged among outside

counsel in defending investigations or litigation,

Metal Leve shall not give and Mahle shall not

receive or have access to, or use of, any of Metal

Leve’s Confidential Information and Mahle shall not

give and Metal Leve shall not receive or have access

to, or use of, any of Mahle’s Confidential

information, except as such information would be

available to Mahle or Metal Leve in the normal

course of business if the Acquisition had not taken

place (“Confidential Information,” as used herein,

means competitively sensitive or proprietary

information and includes but is not limited to

financial information, customer lists, price lists,

prices, engineering, manufacturing, and marketing

methods, patents, technologies, processes, research

and development or other trade secrets);

h. Mahle shall not change the composition of the

Board of Directors or any officers of Metal Leve;

and 

i. Metal Leve shall not pay to Mahle, nor shall Mahle

accept from Metal Leve any dividends.

4. Should the Commission or the United States institute any action under this
Agreement to Hold Separate Page 5

Agreement, the FTC Act, or the Clayton Act, arising from this Acquisition, Mahle and Metal

Leve waive any objection based on lack of personal jurisdiction. Mahle and Metal Leve appoint

the attorneys identified below to accept service of process in any such action.

5. Should the Commission seek in a proceeding to compel Mahle to divest itself of

Metal Leve or to compel Mahle to divest any assets or businesses of Metal Leve, or seek any

other injunctive or equitable relief, neither Mahle nor Metal Leve shall raise any objection based

upon this Agreement; and should the United States seek civil penalties under the HSR Act, neither

Mahle nor Metal Leve shall raise any objection based on this Agreement. Mahle and Metal Leve

also waive the right to contest the validity of this Agreement.

6. For the purpose of determining or securing compliance with this Agreement,

subject to any legally recognized privilege, and upon written request with reasonable notice to

Mahle and Metal Leve made to their principal offices, Mahle and Metal Leve shall permit any duly

authorized representative or representatives of the Commission:

a. Access during the office hours of Mahle or Metal

Leve and in the presence of counsel to inspect and

copy all books, ledgers, accounts, correspondence,

memoranda, and other records and documents in the

possession or under the control of Mahle or Metal

Leve relating to compliance with this Agreement;

b. Upon five (5) days notice to Mahle and Metal Leve,

and without restraint or interference from them, to

interview their officers or employees, who may have

counsel present, regarding any such matters.

7. For the purpose of determining or securing compliance with this Agreement:

a. Metal Leve shall provide the Commission with

reports every 30 days following the signing of this

Agreement by Metal Leve which describe each

change in organization, production, investment,

sales, or research and development conducted by

Metal Leve or its U.S. subsidiary; 

i. since June 11, 1996 and

ii. since the date of the last report filed

under this subparagraph; and

b. Mahle shall provide the Commission with reports
Agreement to Hold Separate Page 6

every 30 days following the signing of this

Agreement which describe its compliance with this

Agreement.

8. The Parties agree to publicize this Agreement by taking the following actions:

a. the Commission making public this Agreement after

acceptance by the Commission; 

b. Mahle and Metal Leve promptly providing copies of

this Agreement to all of Mahle and Metal Leve’s

officers and directors; and

c. Mahle and Metal Leve promptly providing notice of

this Agreement to all Mahle and Metal Leve

employees in the United States and to all U.S.

pistons customers.

9. This Agreement shall be effective and binding immediately upon signing by Mahle

and Metal Leve, but is subject to acceptance of the Commission.

MAHLE GmbH

By:____________________________

MAHLE, Inc.

By:____________________________

ATTORNEYS FOR MAHLE GmbH, and

MAHLE Inc.

Cadwalader, Wickersham & Taft 

100 Maiden Lane

New York, NY 10038

By:____________________________

Haven C. Roosevelt, Esq

Jeanne P. Bolger, Esq..
Agreement to Hold Separate Page 7

METAL LEVE S.A.

By:____________________________

METAL LEVE, Inc.

By:____________________________

.

ATTORNEYS FOR METAL LEVE, S.A.

and METAL LEVE, Inc.

Driggers, Schultz, Herbst & Patterson

2600 W. Big Beaver, Suite 550

Troy, MI 48084

By:____________________________

Jay A. Herbst, Esq.

FEDERAL TRADE COMMISSION 

By:____________________________

Stephen C. Calkins, Esq.

General Counsel

Accepted by the Commission on August 30, 1996.

Donald S. Clark

Secretary