UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

FEDERAL TRADE COMMISSION )

600 Pennsylvania, Avenue, N.W. )

Washington, DC 20580 )

 )

Plaintiff, )

 )

v. ) Civil Action No. 1:13-cv-01021-RMC

 )

ARDAGH GROUP S.A. ) COMPLAINT – PUBLIC VERSION

56, rue Charles Martel, )

Luxembourg )

L-2135 )

 )

and )

 )

COMPAGNIE DE SAINT-GOBAIN )

“Les Miroirs” 18, avenue d’Alsace )

92400 Courbevoie )

France )

 )

and )

 )

SAINT-GOBAIN CONTAINERS, INC. )

1509 S. Macedonia Avenue )

Muncie, Indiana 47307 )

 )

Defendants. )

______________________________________)

COMPLAINT FOR PRELIMINARY INJUNCTION PURSUANT TO 

SECTION 13(b) OF THE FEDERAL TRADE COMMISSION ACT

Plaintiff, the Federal Trade Commission (“FTC” or “Commission”), by its designated 

attorneys, petitions this Court, pursuant to Section 13(b) of the Federal Trade Commission Act 

(“FTC Act”), 15 U.S.C. § 53(b) and Section 16 of the Clayton Act, 15 U.S.C. § 26, for a 

preliminary injunction enjoining Ardagh Group S.A. (“Ardagh”), Compagnie de Saint-Gobain 

(“CSG”), and Saint-Gobain Containers, Inc. (“Saint-Gobain”) (collectively, “Defendants”), 

including their domestic and foreign agents, divisions, parents, subsidiaries, affiliates, 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 1 of 22
2 

partnerships, or joint ventures, from taking any steps toward combining or acquiring any stock, 

assets, or other interest of one another, either directly or indirectly; thereby maintaining the status 

quo during the pendency of an administrative proceeding that has already been initiated by the 

Commission pursuant to Section 5 of the FTC Act, 15 U.S.C. § 45, and Section 7 of the Clayton 

Act, 15 U.S.C. § 18. The ongoing administrative proceeding will determine the legality of the 

acquisition, subject to judicial review by a federal Court of Appeals, and will provide a forum for 

all parties to conduct full discovery and present evidence regarding the likely effects of the 

acquisition. 

NATURE OF THE CASE

1. This is an action to stop Defendants from consummating or otherwise taking any 

steps to complete an anticompetitive acquisition. If Ardagh’s proposed $1.7 billion acquisition 

of Saint-Gobain (the “Acquisition”) is consummated, the number of significant companies 

selling glass containers in the United States would be reduced from three to two, resulting in an 

effective duopoly. Defendants Ardagh and Saint-Gobain manufacture and sell, among other 

things, glass containers to beer customers (“Brewers”) and spirits customers (“Distillers”) who 

fill the glass containers with beer and spirits products. In turn, Americans consume more than 18 

billion beer and spirits products packaged in glass containers each year. Ardagh and SaintGobain, along with Owens-Illinois, Inc. (“O-I”), produce the overwhelming majority of those 

glass containers. Together, these “Three Majors” dominate the $5.1 billion U.S. glass container 

industry. 

2. Absent injunctive relief, Ardagh and O-I will control the lion’s share of the 

markets for glass containers sold to Brewers and Distillers. The merging parties’ own business 

documents suggest that the Acquisition would result in a duopoly controlling more than of 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 2 of 22
3

the sales of glass containers to Brewers and Distillers in the United States. The post-Acquisition 

market shares in these relevant markets easily exceed the market concentration levels presumed 

likely to result in anticompetitive effects under the Federal Trade Commission and U.S. 

Department of Justice Horizontal Merger Guidelines (“Merger Guidelines”) and under the case 

law.

3. The Acquisition would substantially lessen competition by dramatically 

increasing the ease and likelihood of coordination between the only two remaining major glass 

container manufacturers and by eliminating existing head-to-head competition between Ardagh 

and Saint-Gobain, which will result in higher prices for customers. 

4. New entry into the relevant markets will not prevent the Acquisition’s 

anticompetitive effects. Glass container plants are expensive to build, costing at least $150 

million. Construction is also time-consuming and subject to significant regulatory hurdles. 

Expansion by fringe manufacturers is also difficult and unlikely because the remaining firms in 

the marketplace are substantially smaller than the major manufacturers, with no fringe firm 

operating more than one dedicated glass container plant. Finally, Defendants cannot show 

cognizable efficiencies that would outweigh the competitive harm that the Acquisition will 

cause.

5. On June 28, 2013, by a 3-1 vote, the Commission found it had reason to believe

that this Acquisition would violate Section 7 of the Clayton Act and Section 5 of the FTC Act by 

substantially reducing competition leading to higher prices, lower availability, and less 

innovation. See Attachment. The Commission has scheduled a plenary administrative trial on 

the merits of the Acquisition before an FTC Administrative Law Judge commencing on 

December 2, 2013. Id. at 14. Preliminary injunctive relief is imperative to preserve the status 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 3 of 22
4

quo and protect competition during the Commission’s on-going administrative proceeding. Such

relief is warranted as long as the FTC raises “questions going to the merits so serious, 

substantial, difficult and doubtful as to make them fair ground for thorough investigation, study, 

deliberation and determination by the [FTC] in the first instance, and ultimately by the Court of 

Appeals.” Thus, the Court in this matter “is not called upon to reach a final determination on the 

antitrust issues.” Instead, the “one purpose of a proceeding under Section 13(b) is to preserve the 

status quo until the FTC can perform its function.” Allowing the Acquisition to proceed would 

harm consumers and undermine the Commission’s ability to remedy the anticompetitive effects 

of the Acquisition if it is ultimately found unlawful after a full trial on the merits and any 

subsequent appeals.

JURISDICTION AND VENUE

6. This Court’s jurisdiction arises under Section 13(b) of the FTC Act, 15 U.S.C. §

53(b), and Section 16 of the Clayton Act, 15 U.S.C. § 26, and under 28 U.S.C. §§ 1331, 1337, 

and 1345. This is a civil action arising under Acts of Congress protecting trade and commerce

against restraints and monopolies and is brought by an agency of the United States authorized by

an Act of Congress to bring this action. 

7. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), provides in pertinent part:

Whenever the Commission has reason to believe –

(1) that any person, partnership, or corporation is violating, or is about 

to violate, any provision of law enforced by the Federal Trade 

Commission, and

(2) that the enjoining thereof pending the issuance of a complaint by 

the Commission and until such complaint is dismissed by the 

Commission or set aside by the court on review, or until the order 

of the Commission made thereon has become final, would be in the 

interest of the public – the Commission by any of its attorneys 

designated by it for such purpose may bring suit in a district court 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 4 of 22
5 

of the United States to enjoin any such act or practice. Upon a 

proper showing that weighing the equities and considering the 

Commission’s likelihood of ultimate success, such action would be 

in the public interest, and after notice to the defendant, a temporary 

restraining order or a preliminary injunction may be granted 

without bond. . . . 

8. Defendants are, and at all relevant times have been, engaged in activities in or 

affecting “commerce” as defined in Section 4 of the FTC Act, 15 U.S.C. § 44, and Section 1 of 

the Clayton Act, 15 U.S.C. § 12. 

9. Defendants transact business in the District of Columbia and are subject to

personal jurisdiction therein. Venue therefore is proper in the District of Columbia under 28 

U.S.C. § 1391(b) and (c) and 15 U.S.C. §§ 22 and 53(b). 

THE PARTIES

10. Plaintiff, the Commission, is an administrative agency of the United States, 

established, organized, and existing pursuant to the FTC Act, 15 U.S.C. §§ 41 et seq., with its 

principal offices at 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The Commission 

is vested with authority and responsibility for enforcing, inter alia, Section 7 of the Clayton Act 

and Section 5 of the FTC Act. 

11. Defendant Ardagh is a corporation existing and doing business under and by 

virtue of the laws of Luxembourg, with its office and principal place of business located at 56, 

rue Charles Martel, Luxembourg. Ardagh is a global leader in glass and metal packaging 

solutions with global sales of approximately $4.8 billion. Ardagh owns nine glass container 

plants located in seven U.S. states. In 2012, Ardagh achieved U.S. glass container sales of 

. of these sales were made to Brewers and million were made to 

Distillers. Presently, Ardagh is the third-largest glass container manufacturer in the United 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 5 of 22
6 

States overall, the third-largest glass container manufacturer for Brewers, and the second-largest 

for Distillers.

12. Defendant Compagnie de Saint-Gobain is a corporation existing and doing 

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

located at “Les Miroirs,” 18 avenue d’Alsace, Courbevoie, France. Compagnie de Saint-Gobain 

operates a number of industrial manufacturing businesses, including manufacturing glass 

containers. Its U.S. glass container business, Saint-Gobain, operates under the name “Verallia 

North America” or “VNA.” Saint-Gobain operates 13 glass container plants in 11 U.S. states. In 

2012, Saint-Gobain achieved U.S. sales of . of these sales were made to 

Brewers and were made to Distillers. Presently, Saint-Gobain is the second-largest 

glass container manufacturer in the United States overall, the second-largest glass container 

manufacturer to Brewers, and the third-largest to Distillers.

THE ACQUISITION

13. Pursuant to a Share Purchase Agreement entered into between Ardagh and 

Compagnie de Saint-Gobain on January 17, 2013, Ardagh proposes to acquire all the voting 

securities of Saint-Gobain for approximately $1.7 billion. 

14. Pursuant to the Hart-Scott-Rodino Antitrust Improvements Act, 15 U.S.C. § 18a, 

and a timing agreement between Defendants and Commission staff, unless restrained or enjoined 

by this Court, Defendants may consummate the Acquisition on July 5, 2013. Defendants have 

indicated they intend to do so as soon as possible. 

15. On June 28, 2013, the Commission authorized commencement of this action 

under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), to seek a temporary restraining order and 

preliminary injunction barring the Acquisition until the resolution of the administrative 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 6 of 22
7

proceeding that was commenced by the Commission on the same day, pursuant to Section 11(b) 

of the Clayton Act, 15 U.S.C. § 21(b), and Section 5 of the FTC Act, 15 U.S.C. § 45. The 

legality of the Acquisition under Section 7 of the Clayton Act, 15 U.S.C. § 18, and Section 5 of 

the FTC Act, 15 U.S.C. § 45, and the appropriate remedy in the event liability is found, will be 

determined by the Commission through an administrative proceeding and will be subject to 

judicial review.

16. In authorizing the filing of this complaint in this Court, the Commission has 

determined that (1) it has reason to believe the Acquisition would violate the Clayton Act and the 

FTC Act by substantially reducing competition in one or more lines of commerce, and (2) it will 

promote the public interest for this Court to enjoin the Acquisition pending the resolution of the 

Commission’s administrative proceedings and any appeals, so as to minimize the potential harm 

to customers and preserve the Commission’s ability to grant an adequate remedy if it concludes, 

after the hearing, that the Acquisition is unlawful.

BACKGROUND – GLASS CONTAINERS

17. Glass container manufacturers produce beverage and food containers in a variety 

of shapes and sizes for beer, spirits, non-alcoholic beverages, ready-to-drink alcoholic beverages, 

and various food products. In 2011, sales to Brewers represented approximately 58% of U.S. 

glass container shipments and sales to Distillers represented approximately 4%.

18. Glass containers have certain attributes that are prized by Brewers and Distillers 

who package their products in glass. Among other features, glass:

• Protects beer and spirits by guarding against oxygen invasion for a longer 

shelf life;

• Maintains the true taste of the beer or spirits;

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 7 of 22
8

• Is chemically inert and does not leach chemicals into the beer and spirits;

• Is 100% recyclable;

• Promotes a premium or distinctive brand image; and

• Enables Brewers and Distillers to associate the quality appearance of the 

glass with their product identity.

19. Other categories of glass, such as flat window glass, table glass (e.g., drinking 

glasses and kitchenware), and specialty pharmaceutical or industrial glass are manufactured 

differently than glass containers. Defendants do not make or sell these other types of glass.

INDUSTRY DYNAMICS

20. The approximately $5 billion glass container industry in the United States is 

dominated by the Three Majors: O-I, Saint-Gobain, and Ardagh. Presently, O-I is the largest 

U.S. producer of glass containers, operating 17 plants in the country, plus two in Canada. SaintGobain is the second-largest glass container producer with 13 plants, and Ardagh is the thirdlargest with 9 plants.

21. Ardagh entered the U.S. glass container industry in 2012 with two acquisitions. 

First, Ardagh bought Leone Industries, a small, single-plant glass container producer in 

Bridgeton, New Jersey. Shortly thereafter, it bought Anchor Glass Container Corporation 

(“Anchor”), the longstanding, third-largest glass container producer in the United States. 

Ardagh’s proposed acquisition of Saint-Gobain would be its third glass container acquisition in 

the United States in less than two years, and, in its own words, will make Ardagh the largest 

glass producer in the country.

22. Beyond the Three Majors, there is a fringe of glass manufacturers each with only 

a single-plant dedicated to glass containers in the United States, including the independent glassCase 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 8 of 22
9

makers Arkansas Glass, Piramal, Anchor Hocking, Bennu Glass, and Gerresheimer Glass. Of 

these, only three make glass containers for Distillers and only two make any type of glass 

containers for Brewers. These sales are extremely limited.

23. Three beverage companies, E. & J. Gallo Winery (through Gallo Glass 

Company), Anheuser-Busch InBev (through Longhorn Glass Corporation), and MillerCoors 

(through Rocky Mountain Bottle Company - a joint venture with O-I) operate single-plant glass 

container manufacturing facilities. Gallo manufactures mostly wine bottles and a small number 

of glass containers for its own spirits products. Brewers Anheuser-Busch InBev and MillerCoors 

do not have any external sales of the glass containers that they produce.

24. Two Mexican manufacturers, Vitro and Fevisa, currently export a small amount 

of glass containers to the United States. The U.S. fringe, self-suppliers, and Mexican firms have 

a limited impact on competition in the relevant markets, servicing limited regions and portions of 

demand from Brewers and Distillers.

25. The U.S. glass container industry has changed dramatically over the past thirty 

years, as manufacturers have consolidated and shed excess capacity. In 1983, there were 

approximately 121 glass container plants run by 23 different manufacturers, 19 of which 

operated more than one plant in the United States. During the 1980s and 1990s, a series of 

mergers reduced the number of competitors. Today, there are only 47 glass container plants, and 

only the Three Majors operate more than one dedicated glass container plant.

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 9 of 22
10 

[Note: Anchor Glass is now Ardagh; Glenshaw is now Kelman and is not currently 

operational]. 

26. In the years past, mainly before the mid-2000s, when there was excess capacity in 

the market, the Three Majors competed particularly vigorously against each other. To keep their 

plants fully loaded, the Three Majors prioritized glass container sales volume over prices. The 

Defendants refer to this period as one of or Their 

efforts to fill excess capacity and the resulting price competition led to lower margins for the 

Three Majors and lower prices for their customers.

27. Beginning in the mid-2000s, the Three Majors 

 The Three Majors began pursuing a 

“price over volume” strategy (also referred to as “value over volume” or “margin before 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 10 of 22
11 

volume”). The Three Majors recognized that this shared approach would help keep industry 

capacity in close balance with demand, help maintain pricing policies, and ensure more 

profitable returns. As a presentation to Ardagh’s top executives explains, 

28. While rationalizing capacity and announcing a focus on profitability, the Three 

Majors began demanding cost pass-through provisions in their contracts and implementing 

surcharges to protect themselves from cost increases. Meanwhile, the Three Majors successfully 

shielded themselves from increases in raw materials, energy, labor, natural gas, and fuel costs, 

which were passed on to customers. At the same time, the Three Majors recognized the 

advantages of keeping industry supply tight, which maximized their own leverage with 

customers. To avoid excess capacity, they closed down glass container plants and idled 

furnaces. As demonstrated in this chart prepared in 2012 for Ardagh contemplating this very 

Acquisition, the combination of these two strategies led to higher margins for glass container 

manufacturers and higher prices for customers. 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 11 of 22
Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 12 of 22

29. Despite the Three Majors' recognition of mutually beneficial behavior, glass 

container buyers continue to pit 0-I, Saint-Gobain, and Ardagh against each other to obtain 

better prices. For example, in 2013, a Saint-Gobain distributor rep01t ed that it was awhen one of its major Brewers switched to Ardagh in response to al % price increase, and 

wamed Saint-Gobain to Similarly, in August 2011, the CEO of 

Anchor (now Ardagh Glass N01th America) wrote that it 

II after one of Ardagh's liquor customers obtained a lower price quote from 0-I. 

THE RELEVANT PRODUCT MARKETS 

30. The relevant product markets in which to analyze the Acquisition 's effects are: (1) 

the manufacture and sale of glass containers to Brewers; and (2) the manufacture and sale of 

glass containers to Distillers. This is appropriate because, as described in the Merger Guidelines, 

prices are individually negotiated in this industry and customers cannot engage in arbit:I·age. 

12 
13

31. Together, beer and spirits are an important driver for U.S. glass container demand 

and represent more than 60% of the glass container usage in this country. Brewers purchase over 

$2 billion in glass containers annually to meet consumer demand for beer in glass bottles. Nonglass packaging materials, such as aluminum cans or plastic containers, are not in this relevant 

product market because not enough Brewers would switch to such products to make a small but 

significant and non-transitory increase in the price (“SSNIP”) of glass containers to Brewers 

unprofitable for a hypothetical monopolist.

32. Brewers and Distillers do not view other packaging materials as interchangeable 

for glass containers because of commercial constraints, such as consumer preferences and brand 

identity. The existence of other packaging materials has not prevented the Three Majors from 

shifting cost increases to Brewers and Distillers and raising prices in recent years. Indeed, glass 

container prices have increased substantially more than plastic containers and aluminum cans.

33. Aluminum cans are already significantly less expensive than size-equivalent glass 

containers, yet Brewers continue to purchase glass containers. Many Brewers sell beer in both 

aluminum cans and glass bottles, and view these two forms of packaging as complementary to 

each other, not as substitutes. Despite the presence of aluminum cans, Defendants forecast 

demand for glass bottles for beer as stable for the two largest Brewers and growing for craft 

Brewers.

34. Distillers purchase over $500 million in glass containers to package and promote 

their spirits products. Non-glass packaging materials, such as plastic containers, are not in this 

relevant product market because not enough spirits customers would switch to non-glass 

packaging materials to make a SSNIP in glass containers to spirits customers unprofitable for a 

hypothetical monopolist.

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 13 of 22
14

35. Distillers who package their products in glass containers rely on competition 

among glass container manufacturers, not plastic suppliers, to obtain favorable pricing. In 

instances where spirits manufacturers decide to package their products in plastic – mainly in the 

sub-premium brands, small container sizes, and bulk sizes – there is little that glass 

manufacturers can do to prevent these customers from switching to plastic containers. In other 

words, a customer’s decision to convert spirits products from glass packaging to plastic 

packaging are not typically driven by price competition. Moreover, once a customer converts to 

plastic, they very rarely return to packaging in glass.

36. Head-to-head competition between glass containers and other types of packaging 

is rare. Brewers and Distillers compete glass container manufacturers against each other to 

obtain favorable pricing and commercial terms. While other packaging materials can 

functionally be used to package beer and spirits, these other packaging materials, primarily 

aluminum cans for beer and plastic for spirits, lack a close price relationship with glass 

containers. Quite simply, other types of packaging do not constrain Ardagh and Saint-Gobain to 

the same degree as glass container competition. Indeed, as Ardagh itself described in its bond 

offering memorandum raising money to acquire Anchor: “We are subject to intense competition 

from other glass container producers against whom we compete on the basis of price, quality, 

customer service, reliability of delivery and marketing.” Ardagh distinguished this direct 

competition with its glass-making rivals by describing that it competes “indirectly” with other 

forms of rigid packaging, such as plastic and metal. The absence of plastic and metal 

competition is particularly acute in the relevant product markets.

37. The Defendants’ own assessment of competition shows why products other than 

glass containers are not in the relevant markets. In their business documents, Saint-Gobain and 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 14 of 22
15 

Ardagh routinely identify each other and O-I as their most consistent and direct competitive 

constraints. Defendants’ own documents focus on competition from each other and O-I when 

analyzing sales to Brewers and Distillers. Defendants identify their competition as the other 

glass container manufacturers and discuss business strategies for glass container sales. Ardagh 

and Saint-Gobain calculate their sales volumes and revenues relative to each other and O-I. For 

example, in a recent presentation to , Ardagh explained its “North 

American Glass Expansion” would make Ardagh the “#1 Player [with a] 49% Market Share.” 

THE RELEVANT GEOGRAPHIC MARKET

38. The relevant geographic market in which to analyze the competitive effects of this 

Acquisition is no broader than the United States. All Three Majors have manufacturing plants 

throughout the United States that enable them to compete on a nationwide basis. There are 

limited imports of glass containers to the United States, because of high freight costs, logistical 

and supply chain risks, and customer perceptions of inferior quality. Imports are thus unlikely to 

defeat a small but significant and non-transitory increase in price by a hypothetical monopolist of 

glass containers manufactured and sold to Brewers and Distillers in the United States. 

MARKET CONCENTRATION AND THE ACQUISITION’S 

PRESUMPTIVE ILLEGALITY

39. Ardagh’s post-Acquisition market share in the sale of glass containers to Brewers 

will be %, based on sales. In the market for glass containers to Distillers, the postAcquisition market share will be %. 

40. The glass container industry in the United States will be highly concentrated after 

the Acquisition. The Merger Guidelines measure concentration using the Herfindahl-Hirschman 

Index (“HHI”). Under that test, a merger is presumed likely to create or enhance market power 

(and is presumptively illegal) when the post-merger HHI exceeds 2,500 and the merger increases 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 15 of 22
16 

the HHI by more than 200 points. Here, both markets’ post-merger HHI well exceeds 2,500, and 

the Acquisition increases concentration in the sale of glass containers sold to Brewers by 781 

points, and 1,069.3 for the sale of glass containers to Distillers. 

ANTICOMPETITIVE EFFECTS – THE ACQUISITION WOULD LIKELY LEAD TO 

ANTICOMPETITIVE COORDINATION

41. The glass container markets for beer and spirits have many features that increase 

the likelihood of post-Acquisition coordination, including low demand growth, tight capacity, 

stable market shares, and high barriers to entry. The Three Majors already obtain a wealth of 

information about the markets and each other, including plant-by-plant production capabilities, 

profitability, the identities of each other’s customers, and details regarding each other’s contracts 

and negotiations with customers. Customers, industry analysts, public statements, and 

distributors all serve as conduits for market information. 

42. After the Acquisition, with only two major glass container manufacturers left, it 

will become substantially easier for the remaining two majors to coordinate with one another on 

price and non-price terms to achieve supracompetitive prices or other anticompetitive outcomes. 

43. All Three Majors recognize their mutual interdependence and aligned incentives 

today. They have reduced capacity, either by closing plants or idling furnaces, to rationalize 

industry supply so as not to exceed customer demand. The Three Majors share an “ 

 and have embraced a “price over volume” or “margin 

over volume” strategy of cutting capacity, boosting price, and shifting input cost volatility to the 

customers. Indeed, Saint-Gobain repeatedly referred to its strategy of “margin over volume” as 

its O-I is the only one of the Three Majors that is publicly 

traded and Ardagh and Saint-Gobain closely follow O-I’s financial reports and public strategy 

statements.

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 16 of 22
17 

44. Not only do the Three Majors pay close attention to each other’s public 

statements but their executives often obtain non-public information through third parties. For 

example, in 2009, Anchor requested a call with a key industry analyst. After the call, in which 

Anchor’s CEO, CFO, and a board member participated, the industry analyst wrote back, “I will 

let you know what I hear back from St. Gobain when I hear from them.” Three days later, 

Anchor’s CEO responded: 

We hope that our view confirms your thoughts regarding the 

industry leader’s efforts on enhanced performance. We continue to desire 

to play the role as the rational #3 glass provider in NA, support customers

where there is a strong geographic alignment logistically, and focus our 

assets to support improved value rather than just volume. 

We believe our curtailment efforts on capacity and balancing 

capacity/demand/inventory are very consistent with what has been pursued 

by the leader as well.

The industry analyst later responded with information he had learned from discussions with O-I:

I was chatting with OI recently and they are optimistic about the 

outlook for a recovery in glass volumes, but probably not until 2010 . . . In 

the US, they anticipate achieving some price success with their 2 big 

customers at the end of this year, but they seemed (in my opinion) to have 

backed off a bit of the bullishness they had a few quarters ago regarding 

timing and absolute level of increase. They do feel that supply/demand is 

being well managed in the US, but given the volume trends thus far in 

2009 they seem a little concerned (in my view) on whether they will be 

able to get the big step up in price they (and investors) wanted . . . Reading 

between the lines a little, it seems to me they are a little concerned about 

losing some volume to competitors. 

45. This merger to duopoly would greatly increase the likelihood and risk of 

coordination. For example, prior to quoting on craft Brewer business, Saint-Gobain advised its 

sales committee to 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 17 of 22
18 

ANTICOMPETITIVE EFFECTS – THE ACQUSITION WILL ELIMINATE DIRECT 

COMPETITION BETWEEN ARDAGH AND SAINT-GOBAIN 

46. In addition, the Acquisition would eliminate head-to-head competition between 

the second- and third-largest U.S. glass container manufacturers in the relevant product markets. 

Brewers and Distillers have reaped substantial benefits from Defendants’ rivalry, which would 

be immediately extinguished by the Acquisition. 

47. Direct competition between Ardagh and Saint-Gobain has led to lower prices for 

customers. For example, in 2012, Anchor lowered its prices to in response to 

competition from Saint-Gobain. Another craft brewer, was able to obtain more favorable 

pricing by competing Saint-Gobain and Anchor off each other. A spirits customer, , also 

used the threat of switching from Saint-Gobain to Anchor to get better prices on its glass bottles.

48. Defendants’ ordinary-course business documents confirm that they understand 

competition from each other to constrain price increases. For example, in a 2011 email, the Vice 

President of Sales for Anchor wrote about price increases through its glass distributor for beer 

customers

 In a 2012 email, the other Vice President 

of Sales for Anchor wrote about Saint-Gobain’s pricing at another beer customer: 

49. Ardagh and Saint-Gobain have also competed directly to offer customers more 

innovative products and better service. For example, in 2012, a customer invited Ardagh and 

Saint-Gobain to submit prototypes for an innovative glass beer bottle. Both firms submitted 

proposals before Saint-Gobain won the business. At another Brewer, competition from SaintGobain prompted Ardagh to offer lighter weight glass bottles.

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 18 of 22
19 

50. The Acquisition is also likely to lead to output reductions. 

 In an industry where capacity is tight, and 

utilization rates are nearly at maximum capacity, such plant closures or idling furnaces are likely 

to result in overall output reductions. 

ENTRY BARRIERS

51. Effective entry or expansion into the relevant markets would neither be timely, 

likely, or sufficient to counteract the Acquisition’s likely anticompetitive effects. The barriers 

facing potential entrants include the large capital investment necessary to build a glass plant, the 

need to obtain environmental permits, the high fixed costs of operating a glass plant, existing 

long-term contracts that foreclose much of the market, the need for specific manufacturing 

knowledge that is not easily transferred from other industries, and the molding technologies and 

extensive mold libraries already in place at existing manufacturers.

EFFICIENCIES

52. Extraordinarily great merger-specific efficiencies would be necessary to justify 

the Acquisition in light of its vast potential to harm competition. Nearly all of Ardagh’s alleged 

efficiencies are either speculative, unverifiable, or not merger-specific. Defendants cannot show 

cognizable efficiencies that would outweigh the competitive harm that the Acquisition will 

cause.

LIKELIHOOD OF SUCCESS ON THE MERITS, 

BALANCE OF EQUITES, AND NEED FOR RELIEF

53. In deciding whether to grant relief, the Court must balance the likelihood of the 

Commission’s ultimate success on the merits against the public equities, using a sliding scale. 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 19 of 22
20

The principal equity in cases brought under Section 13(b) is the public’s interest in effective 

enforcement of the antitrust laws. Equities affecting only the defendants cannot tip the scale. 

54. The Commission’s administrative complaint raises questions about the lawfulness 

of Defendants’ Acquisition under the Clayton Act and the FTC Act that are serious, substantial, 

difficult, and doubtful enough to make them fair ground for thorough investigation, study, 

deliberation, and determination by the Commission during the administrative proceeding in the 

first instance, subject to appellate review. 

55. The Commission has reason to believe that the Acquisition would violate Section 

7 of the Clayton Act and that the merger agreement violates Section 5 of the FTC Act. In 

particular, the Complaint Counsel for the Commission is likely to succeed in demonstrating, 

among other things, that: 

a. The Acquisition would have anticompetitive effects in both the 

market of glass containers sold to Brewers and the market of glass 

containers sold to Distillers;

b. Substantial and effective entry into the markets of glass containers

sold to Brewers and to Distillers is difficult, and would not be 

likely, timely, or sufficient to offset the anticompetitive effects of 

the Acquisition; and 

c. Any efficiencies that Defendants may assert will result from the 

Acquisition are speculative, not merger-specific, and are, in any 

event, insufficient as a matter of law to justify the Acquisition.

56. Should the Commission rule, after the full administrative trial, that the 

Acquisition is unlawful, reestablishing the status quo ante of vigorous competition between 

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 20 of 22
21

Ardagh and Saint-Gobain would be difficult, if not impossible, if the Acquisition has already 

occurred. Moreover, in the absence of relief from this Court, substantial harm to competition 

would likely occur in the interim, even if suitable divestiture remedies could be devised. 

57. Accordingly, the equitable relief requested here is in the public interest.

WHEREFORE, the Commission respectfully requests that the Court:

1. Preliminarily enjoin the Defendants from taking any further steps to 

consummate the Acquisition, or any other acquisition of stock, assets, or other 

interests, either directly or indirectly;

2. Retain jurisdiction and maintain the status quo until the administrative 

proceeding that the Commission has initiated is concluded; and

3. Award such other and further relief as the Court may determine is appropriate, 

just, and proper.

Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 21 of 22
Case 1:13-cv-01021-RMC Document 26-1 Filed 07/17/13 Page 22 of 22

) 

Dated: July 2, 2013 

Of counsel: 

NORMAN A. ARMSTRONG, JR. (D.C. Bar 459621) 

Deputy Director 

Federal Trade Commission 

Bureau of Competition 

JONATHAN NUECHTERLEIN (D.C. Bar 442470) 

General Counsel 

Federal Trade Commission 

CATHARINEM. MOSCATELLI (D.C. Bar418510) 

Assistant Director 

BRENDAN MCNAMARA 

Deputy Assistant Director 

ANGELIKE MINA 

SEANHUGHTO (D.C. Bar421224) 

STEVEN WILENSKY (D.C. Bar 430398) 

MONICA CASTILLO 

ANGEL PRADO 

JAMES ABELL (D.C. Bar 990773) 

MEREDITH ROBINSON (D.C. Bar 498245) 

JOSH GOODMAN 

MICHAEL FRANCHAK 

STEVENDAHM 

DANIELLE SIMS (D.C. Bar 982506) 

KRISTIAN ROGERS 

AMANDA HAMILTON (D.C. Bar 499646) 

Attorneys 

Federal Trade Commission 

Bureau of Competition 

Mergers II Division 

22 

) 

Respectfully submitted, 

- ? - ( /" /) 

___.-/) \- ~ 

EDWARD D. HASSI 

Chief Litigation Counsel 

Federal Trade Commission 

Bureau of Competition 

600 Pennsylvania Ave., NW 

Washington, DC 20580 

Telephone: (202) 326-2470 

Facsimile: (202) 326-2884 

Email: ehassi@ftc.gov 

Attorney for Plaintiff