| **ANALYSIS OF PROPOSED CONSENT ORDER    TO AID PUBLIC COMMENT**

The Federal Trade Commission ("Commission") has accepted, subject to final    approval, an Agreement Containing Consent Order ("Agreement") from Global    Industrial Technologies, Inc. ("proposed respondent").

The proposed Order has been placed on the public record for sixty (60) days for    reception of comments by interested persons. Comments received during this period will    become part of the public record. After sixty (60) days, the Commission will again review    the Agreement and the comments received and will decide whether it should withdraw from    the Agreement or make final the Agreement’s proposed Order.

The Commission's investigation of this matter concerns the proposed acquisition by    Global of all of the outstanding shares of AP Green Industries, Inc. ("AP    Green") through a cash tender offer. Global and AP Green are two leading U.S.    manufacturers of refractories. Refractories are heat-resistant materials used to line    furnaces in industries that involve the heating or containment of solids, liquids, or    gases at high temperatures. The Commission's proposed complaint alleges that Global and AP    Green compete with each other in the United States market for glass-furnace silica    refractories. Glass-furnace silica refractories are used in the glass industry to build    the roofs and other portions of glass-melting furnaces.

The Agreement Containing Consent Order would, if finally accepted by the Commission,    settle charges that the acquisition may substantially lessen competition in the production    and sale of glass-furnace silica refractories in the United States and lead to a monopoly    in that line of commerce. The Commission has reason to believe that the acquisition    agreement violates Section 5 of the Federal Trade Commission Act and the acquisition would    have anticompetitive effects and would violate Section 7 of the Clayton Act and Section 5    of the Federal Trade Commission Act if consummated, unless an effective remedy eliminates    such anticompetitive effects.

The Commission's Complaint alleges that glass-furnace silica refractories provide    unique characteristics, and that as a result, the use of these materials would not be    diminished by even a large price increase. The Complaint further alleges that imports of    glass-furnace silica refractories are small. Global and AP Green are the only two    producers of glass-furnace silica refractories in the United States, and entry of other    producers is unlikely and would be time consuming. The Commission's Complaint alleges that    the proposed acquisition, which would result in a monopoly in the United States, would    lessen competition by eliminating competition between Global and AP Green, and would lead    to higher prices and less product innovation.

The proposed Order accepted for public comment contains provisions that would require    Global to divest AP Green's glass-furnace silica refractories business to Robert R.    Worthen and Dennis R. Williams (jointly or through a corporation called Utah Refractories    Corp.) in a manner that receives the prior approval of the Commission within 30 days of    the date the proposed Order was accepted for public comment, or if such divestiture fails,    to another buyer that receives the prior approval of the Commission in a manner that    receives the prior approval of the Commission within 90 days of the date the proposed    Order was accepted for public comment. The divestiture includes the AP Green manufacturing    plant located in Lehi, Utah, where AP Green produces silica refractories, together with    the sources of raw materials used to manufacture silica refractories and all other assets    relating to the research, development, production, sale, or distribution of silica    refractories, but excluding AP Green's manufacturing facility in Sproul, Pennsylvania.    Global's divestiture of the AP Green silica refractories business, if completed, would    satisfy the requirements of the Order and remedy the lessening of competition alleged in    the Complaint.

If Global fails to divest AP Green's silica refractories business within 90 days of the    date the proposed Order was accepted for public comment, then the Commission may appoint a    trustee to divest AP Green's silica refractories business, or, at the option of the    trustee, Global's Northeast, Maryland manufacturing plant, where Global produces silica    refractories, together with the sources of raw materials used to manufacture silica    refractories and all other assets relating to the research, development, production, sale,    or distribution of silica refractories, but excluding Global's manufacturing facility in    Calhoun, Georgia.

The Order also contains a provision requiring Global to maintain the viability and    marketability of the Global and AP Green silica refractories businesses pending the    divestiture.

The consent is crafted to preserve the current competitive state of the U.S. market for    glass-furnace silica refractories. The consent will maintain the AP Green silica plant as    an independent supplier of glass-furnace silica refractories for U.S. customers. Thus,    there will continue to be two domestic sources of the product, as there were prior to the    proposed merger.

The purpose of this analysis is to facilitate public comment on the proposed Order.    Comments should also be directed to whether the pre-approved buyers, Robert R. Worthen and    Dennis R. Williams and their corporation, Utah Refractories Corp., will be financially    viable and able to replace the competition lost by this acquisition. This analysis is not    intended to constitute an official interpretation of the Agreement or the proposed Order    or in any way to modify the terms of the Agreement or the proposed Order. |
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