| **Concurring Statement of    Commissioner Mozelle W. Thompson**

in *Nestle S.A./Ralston    Purina Co.*, File No. 011-0083 

The Commission today has voted to accept a Consent Order that    remedies competitive concerns in the dry cat food market stemming from Nestle S.A.'s    ("Nestle") proposed acquisition of Ralston Purina Co. ("Ralston").    Pursuant to the proposed Consent Agreement and Order, Ralston would divest its top-selling    Meow Mix brand and its Alley Cat brand to investment firm J.W. Childs Equity Partners II,    L.P. ("Childs"), owners of the Hartz Mountain line of specialty pet care    products. For me, this decision was difficult because the continued competitiveness of    these brands is so important to consumers.

As always, the key issue facing the Commission in its    analysis of the proposed remedy is whether or not the remedy will restore competition that    would be lost as a result of the proposed merger. This is at its essence a factual    inquiry, involving consideration of a multitude of factors, including the extent of the    prospective buyer's industry know-how, its financial viability, its future marketing    plans, and its capacity to research, develop, and make innovations to the relevant    products.

Our analysis here was made all the more difficult in that we    were presented with a buyer that does not have a record of experience in the market in    question, therefore, historical indicia of market competitiveness were not available for    the Commission's review. As such, the Commission undertook an extraordinarily rigorous    analysis of Childs and its ability to be competitive with the assets in question.    Ultimately, my primary reservation was not about Childs' ability to be competitive in the    dry cat food marketplace, but rather that Childs, as a financial buyer, might in the near    term re-sell the assets in question to a buyer who will operate the business poorly or not    at all, thus defeating the purpose of the Commission's Order. 

These concerns are addressed in Section VI of the proposed    Order, which provides that Childs' will not sell the acquired assets within five years of    the date of the Order without prior approval of the Commission. While generally I am    cautious about including lengthy oversight provisions in such orders, it is appropriate in    this case because these provisions ensure that in the event of a resale by Childs, the    Commission will be able to assure that the prospective buyer is committed to enhancing the    assets in question, thus maintaining the integrity of the Commission's Order.UBLIC "-//IETF//DTD HTML//EN"> |
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