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0610281

UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS: Deborah Platt Majoras, Chairman

Pamela Jones Harbour

Jon Leibowitz

William E. Kovacic

J. Thomas Rosch

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In the Matter of )

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OWENS CORNING, ) Docket No. C-

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 a corporation. )

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COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act and of the Clayton Act,

and by virtue of the authority vested by said Acts, the Federal Trade Commission (the

“Commission”), having reason to believe that respondent Owens Corning (“Owens Corning”), a

corporation, and Compagnie de Saint Gobain (“Saint Gobain”), a corporation, both subject to the

jurisdiction of the Commission, have agreed to an acquisition by Owens Corning of certain

fiberglass reinforcements and composite fabrics assets of Saint Gobain in violation of Section 7

of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission

Act, as amended, 15 U.S.C. § 45, and it appearing to the Commission that a proceeding in

respect thereof would be in the public interest, hereby issues its Complaint, stating its charges as

follows:

I. RESPONDENT

1. Respondent Owens Corning is a corporation organized and existing under the

laws of the State of Delaware, with its principal place of business at One Owens Corning

Parkway, Toledo, Ohio, 43659. Owens Corning is a global company engaged in a wide variety

of businesses, including the development, manufacture, marketing, and sale of glass fiber

reinforcements.
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II. JURISDICTION

2. Owens Corning is, and at all times relevant herein has been, engaged in commerce

as “commerce” is defined in Section 1 of the Clayton Act, as amended, 15 U.S.C. § 12, and is a

corporation whose business is in or affects commerce as “commerce” is defined in Section 4 of

the Federal Trade Commission Act, as amended, 15 U.S.C. § 44.

III. THE PROPOSED TRANSACTION

3. Saint Gobain is a French company with its head office in Courbevoie, France. 

Saint Gobain controls a number of companies in the United States, including, but not limited to,

Saint Gobain Vetrotex America, Inc. (“Vetrotex America”) located at 4515 Allendale Rd,

Wichita Falls, Texas, 76310. Saint Gobain is a global company engaged in a wide variety of

businesses, including the development, manufacture, marketing, and sale of glass fiber

reinforcements.

4. Owens Corning and Saint Gobain originally planned to combine their respective

glass fiber reinforcement businesses in a new entity to be called Owens Corning Vetrotex

Reinforcements (“OCVR”). The new entity was to be owned 60% by Owens Corning and 40%

by Saint Gobain. 

5. In August 2007, the parties restructured the transaction and entered into an

acquisition agreement whereby Owens Corning will acquire Saint Gobain’s glass fiber

reinforcements and composite fabric business assets worldwide with several important

exclusions. Owens Corning will not acquire Saint Gobain assets of the glass fiber

reinforcements business located in the United States. Additionally, certain assets located in

Europe will be divested pursuant to an agreement entered into between the parties and the

European Commission. Consequently, Saint Gobain’s glass fiber reinforcements business and

assets located in the United States will be excluded from the proposed acquisition as well as

certain assets located in Europe. However, the proposed acquisition still includes Saint Gobain

assets that are located in Europe and used in the design, manufacture, and sale of Continuous

Filament Mat (“CFM”), a unique glass fiber reinforcement product. 

IV. CONTINUOUS FILAMENT MAT AND RELATED TECHNOLOGY

6. CFM is a unique glass fiber reinforcement product manufactured by melting

quarry inputs (combinations of silica, clay, and other materials) in a refractory lined furnace. The

resulting molten glass product is drawn through a holed surface called a bushing. The resulting

filaments (in the case of standard furnaces), or the resulting spheres, also known as marbles (in

the case of marble furnaces), are then diverted to a separate production function which reheats

the materials and uses various chemical and physical processes to alter its properties, ultimately

tailoring it for a range of end use applications. In contrast to other types of glass fiber

reinforcement products, CFM is a non-woven material in which filament or marbles are
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ultimately converted into a mat using soluble and insoluble binders. Consequently, once the

initial filaments or marbles are produced, the downstream production processes and equipment

(on which CFM is produced) are unique to CFM and are not used to produce other types of glass

fiber reinforcement products. 

V. THE RELEVANT PRODUCT MARKET

7. CFM has distinct performance characteristics and physical properties, including,

but not limited to, strength, toughness, and ease of processing in automated manufacturing

processes. CFM is used where its properties are important, such as compression molding

processes. CFM allows the manufacturer that uses it to cost effectively produce non-electrical

laminates, turbine blades, marine products such as boat parts and accessories, as well as a variety

of products for which its performance characteristics are desirable and cost effective. Because of

the superior performance and cost effectiveness of CFM in the applications in which it is used,

consumers of CFM would not switch to other materials in response to a small but significant and

non-transitory increase in the price of CFM. More than $60 million dollars worth of CFM was

purchased in the United States last year.

8. Owens Corning and Saint Gobain are leaders in the CFM industry, both in product

sales and technology. Owens Corning produces and sells CFM in North America, and was the

leading seller of CFM in the United States in 2006. Its focus is on performance products, and it

developed a proprietary furnace technology which is used to produce glass fiber filaments or

marbles used in the manufacture of glass reinforcement products, including CFM. Saint Gobain

is also a leading producer of CFM and a leading developer of glass fiber reinforcement products

and related technology. Saint Gobain does not produce CFM in the United States. It develops

and produces CFM products in Italy, which it imports to the United States. Owens Corning and

Saint Gobain account for more than 90 percent of the CFM sold in North America. The only

other substantial supplier is PPG Industries, a firm that accounted for less than 10 percent of the

CFM sold in the United States last year.

VI. RELEVANT GEOGRAPHIC MARKET

9. The relevant geographic market within which to analyze the likely effects of the

proposed transaction is the design, manufacture, and sale of CFM and related technology in

North America, including imports.
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VII. CONCENTRATION IN THE RELEVANT MARKET

10. The relevant market would be highly concentrated as a result of the acquisition. 

Post-acquisition, Respondent would account for more than 90 percent of CFM sales in North

America.

VIII. CONDITIONS OF ENTRY

11. Entry into the relevant market would not be timely, likely, or sufficient in

magnitude, character, and scope to deter or counteract the anticompetitive effects of the

acquisition.

IX. EFFECTS OF THE ACQUISITION

12. The effects of the acquisition, if consummated, may be substantially to lessen

competition and tend to create a monopoly in the relevant market in violation of Section 7 of the

Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C.

§ 45. Specifically, the acquisition would:

a. Eliminate actual, direct, and substantial competition between Owens Corning and

Saint Gobain in the relevant market;

b. Reduce innovation competition among developers of the relevant product,

including the delay of, or redirection of, research and development projects in the

relevant product and CFM applications;

c. Substantially increase the level of concentration in the relevant market and

enhance the probability of coordination; and

d. Increase Respondent’s ability to exercise market power unilaterally in the relevant

market.
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X. VIOLATIONS CHARGED

13. The agreement described in Paragraph 5 constitutes a violation of Section 5 of the

FTC Act, as amended, 15 U.S.C. § 45.

14. The transaction described in Paragraph 5, if consummated, would constitute a

violation of Section 5 of the FTC Act, as amended, 15 U.S.C. § 45, and Section 7 of the Clayton

Act, as amended, 15 U.S.C. § 18.

WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade Commission on this

__day of _________, 2007, issues its Complaint against said Respondent.

By the Commission.

 SEAL Donald S. Clark

Secretary