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1010175

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS: Jon Leibowitz, Chairman 

William E. Kovacic

J. Thomas Rosch

Edith Ramirez

Julie Brill

In the Matter of

Keystone Holdings, LLC,

a limited liability company, and

Compagnie de Saint-Gobain,

a corporation.

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Docket No. CCOMPLAINT

Pursuant to the Clayton Act and the Federal Trade Commission Act, and its authority

thereunder, the Federal Trade Commission (“Commission”), having reason to believe that

Respondent Keystone Holdings, LLC (“Keystone”), a limited liability company subject to the

jurisdiction of the Commission, has made an offer to acquire the Advanced Ceramics Business

assets of Respondent Compagnie de Saint-Gobain (“Saint-Gobain”), a corporation subject to the

jurisdiction of the Commission, 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. RESPONDENTS

1. Respondent Keystone is a limited liability company organized, existing, and doing business

under, and by virtue of, the laws of the State of Delaware, with its office and principal place

of business located at 16000 Table Mountain Parkway, Golden, Colorado.
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2. Respondent Saint-Gobain is a corporation organized, existing, and doing business under, and

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

Courbevoie, France, Les Miroirs, 18 Avenue d’Alsace, 92096 La Defense Codex, France.

3. Respondents Keystone and Saint-Gobain are engaged in, among other things, the research,

development, manufacture, marketing and sale of alumina wear tiles.

II. JURISDICTION

4. Respondents Keystone and Saint-Gobain are, and at all times relevant herein have been,

engaged in commerce, as “commerce” is defined in Section 1 of the Clayton Act, as

amended, 15 U.S.C. § 12, and are companies whose businesses are in or affect commerce

as “commerce” is defined in Section 4 of the Federal Trade Commission Act, as amended,

15 U.S.C. § 44.

III. THE PROPOSED ACQUISITION

5. On June 28, 2010, Keystone and Saint-Gobain announced the acquisition by Keystone of

Saint-Gobain’s Advanced Ceramics Business, including facilities in Europe, North America,

South America, and Asia, for a purchase price of $245 million. The business acquired

includes igniters, semiconductor components, precision balls, molten-metal filters, boron

nitride, and ceramic specialties (hereinafter, “Notified Transaction”). 

6. As part of the Notified Transaction, Keystone proposes to acquire Saint-Gobain’s assets and

business in Latrobe, Pennsylvania, relating to the research, development, manufacture,

marketing and sale of pre-engineered alumina wear tile and standard alumina wear tile in

North America. Keystone also proposes to acquire a plant in Vinhedo, Brazil that furnishes

standard alumina wear tiles to Latrobe that are marketed and sold worldwide by SaintGobain’s Latrobe business. 

IV. THE RELEVANT MARKETS

7. For the purposes of this Complaint, the relevant lines of commerce in which to analyze the

effects of the Notified Transaction are the research, development, manufacture, marketing

and sale of: (a) pre-engineered alumina wear tile; and (b) standard alumina wear tile; or (c)

alternatively, all alumina wear tile.

8. For the purposes of this Complaint, the relevant geographic area in which to analyze the

effects of the Notified Transaction is North America.

V. THE STRUCTURE OF THE MARKETS

9. Respondents Keystone and Saint-Gobain are significant participants in the relevant markets,

and the relevant markets are highly concentrated, as measured by the Herfindahl-Hirschman

Index (“HHI”). The Notified Transaction would further increase concentration levels,
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resulting in Keystone becoming the largest supplier of alumina wear tile in the relevant

geographic area. Keystone and Saint-Gobain are two of only three significant suppliers of

pre-engineered alumina wear tile, and two of only four significant suppliers of standard

alumina wear tile in the relevant geographic area. 

VI. ENTRY CONDITIONS

10. Entry into the relevant markets would not be timely, likely, or sufficient to prevent or defeat

the anticompetitive effects of the Notified Transaction. 

11. Entry into the relevant markets is costly, difficult, and unlikely because of, among other

things, the time and cost required to construct an alumina wear tile manufacturing facility,

develop and manufacture quality alumina wear tile products, and achieve customer

acceptance. Because the size of the investment necessary to enter is substantial in relation

to the size of the overall markets, and of the uncertainty that an entrant could secure the

distribution necessary to make the investment profitable, it is unlikely a company could

successfully enter the relevant markets. 

VII. EFFECTS OF THE NOTIFIED TRANSACTION

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

competition and to tend to create a monopoly in the relevant markets 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, in the following ways, among others:

a. by eliminating actual, direct, and substantial competition between Respondents

Keystone and Saint-Gobain; 

b. by increasing the likelihood that Respondent Keystone would unilaterally exercise

market power in the relevant markets; and

c. by enhancing the likelihood of collusion or coordinated interaction between or

among the remaining firms in the relevant markets.

VIII. MODIFICATION OF THE NOTIFIED TRANSACTION

13. On or about December 2, 2010, Keystone and Saint-Gobain executed an amended purchase

and sale agreement that, inter alia, removed from the Notified Transaction the assets and

businesses of Saint-Gobain in Latrobe, Pennsylvania, relating to the research, development,

manufacture, marketing and sale of standard alumina wear tile and pre-engineered alumina

wear tile in North America. Pursuant to the amended purchase agreement, Keystone and

Saint-Gobain also have contracted for the sale by Keystone to Saint-Gobain of standard

alumina wear tile manufactured in Vinhedo, Brazil.
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IX. VIOLATIONS CHARGED

14. The allegations contained in paragraphs 1-13 are repeated and re-alleged as though fully set

forth here.

15. The Notified Transaction described in paragraph 5 would constitute a 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.

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

___________________ of __________________, 2011, issues its Complaint against said

Respondents.

By the Commission.

Donald S. Clark

Secretary

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