B232734

UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

 )

In the Matter of )

)

INSILCO CORPORATION, ) Docket No. C-3783

)

 a corporation. )

)

COMPLAINT

The Federal Trade Commission ("Commission"), having reason

to believe that respondent Insilco Corporation ("Insilco"), a

corporation subject to the jurisdiction of the Federal Trade

Commission, has acquired certain assets of Helmut Lingemann,

GmbH, ("Lingemann") 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 ("FTC Act"), 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. DEFINITIONS

For purposes of this Complaint the following definitions

apply:

1. "Welded Aluminum Tubes", including welded aluminum

tubes with diameters of 50 millimeters or greater ("Large Welded

Aluminum Tubes") and welded aluminum tubes with diameters less

than 50 millimeters ("Small Welded Aluminum Tubes"), means thin

wall welded-seam aluminum tubes used in the manufacture of heat

exchangers, which are devices that transfer heat from one fluid

or gas to another medium, generally air.

2. "Non-Aggregated, Customer-Specific Information" means

information about a product’s cost and/or price that is in such a

form that the cost and/or price of a product for an identifiable

individual customer can be identified.

II. THE RESPONDENT

3. Respondent Insilco is a corporation organized,

existing, and doing business under and by virtue of the laws of 
2

the State of Delaware, with its principal place of business at

425 Metro Place N, Box 7196, Dublin, Ohio, 43017.

4. Insilco 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 affecting commerce as "commerce" is

defined in Section 4 of the FTC Act, as amended, 15 U.S.C. § 44.

III. THE ACQUIRED COMPANY

5. Helima-Helvetion, Inc. ("Helima") was a corporation

organized, existing, and doing business under and by virtue of

the laws of the State of New York, with its principal place of

business having been located at Duncan, South Carolina.

6. Helima, at all times relevant herein, was engaged in

commerce as "commerce" is defined in Section 1 of the Clayton

Act, as amended, 15 U.S.C. § 12, and was a corporation whose

business is in or affecting commerce as "commerce" is defined in

Section 4 of the FTC Act, as amended, 15 U.S.C. § 44.

IV. THE ACQUISITIONS

7. On or about July 10, 1996, Insilco purchased from

Lingemann for $12.8 million the assets of Helima ("Helima

Acquisition"); for $17 million, the stock of Lingemann’s European

manufacturer of welded aluminum heat exchanger tubes, ARUP AluRohr und Profil, GmbH; and the option to purchase Maschinenbau,

GmbH, a Lingemann subsidiary in Germany that manufactures mills

used in the production of aluminum tubes (together, the

"Acquisitions").

8. Prior to the consummation of the Acquisitions, Insilco

requested and received from Lingemann Non-Aggregated, CustomerSpecific Information all of which is the type of information that

would likely have been detrimental to competition in the relevant

markets if the Acquisition had not been consummated.

9. The Non-Aggregated, Customer-Specific Information

transferred from Helima to Insilco included descriptions of prior

customer negotiations; detailed customer-by-customer price

quotes; current pricing policies and strategies; and detailed,

customer-by-customer future pricing strategies.
3

V. THE RELEVANT MARKETS

10. For purposes of this Complaint, a relevant line of

commerce in which to analyze the Helima Acquisition is the market

for Large Welded Aluminum Tubes.

11. For purposes of this Complaint, a relevant line of

commerce in which to analyze the Helima Acquisition is the market

for Small Welded Aluminum Tubes.

12. For purposes of this Complaint, the relevant geographic

market for both relevant lines of commerce is North America.

13. Each of the relevant markets is highly concentrated. 

As a result of the Helima Acquisition, Insilco is currently the

only supplier of Large Welded Aluminum Tubes with 100% of the

market, and one of only two suppliers of Small Welded Aluminum

Tubes, with a market share of over 90%.

14. There has been no entry into the market for Large

Welded Aluminum Tubes since the time of the Acquisitions, and the

threat of entry has not deterred anticompetitive effects

resulting from the Helima Acquisition. Because the cost of

entering and producing Large Welded Aluminum Tubes is relatively

high compared to the limited potential sales revenues available

to an entrant, entry into this market is not likely to be

profitable. Consequently, entry into the Large Welded Aluminum

Tube market is not likely to occur in a timely manner and

counteract the additional anticompetitive effects likely to

result from the Helima Acquisition. Entry into this relevant

market is difficult and unlikely. 

15. There has been no entry into the market for Small

Welded Aluminum Tubes since the time of the Acquisitions, and the

threat of entry has not deterred anticompetitive effects

resulting from the Helima Acquisition. Additional

anticompetitive effects resulting from the Helima Acquisition are

likely and will continue until such time as actual and sufficient

entry occurs.

16. Prior to the Acquisitions, Insilco and Helima were

actual competitors in the relevant markets. 
4

VI. EFFECTS OF THE ACQUISITION

17. The Acquisitions have substantially lessened or may

substantially lessen competition in the following ways:

a. they have eliminated Helima as a substantial

independent competitor in the relevant markets;

b. they have eliminated actual, direct, and substantial

competition between Insilco and Helima in the relevant

markets;

c. they have increased the level of concentration in the

already highly concentrated relevant markets;

d. they have led, or may lead, to increases in prices in

the relevant markets; 

e. they have led, or may lead, to a reduction in service

in the relevant markets;

f. they have led, or may lead, to the reduction in quality

in the relevant markets;

g. they have led, or may lead, to a reduction in

technological improvements in the relevant markets;

h. they have increased barriers to entry into the relevant

markets; and

i. they have given Insilco market power in the relevant

markets.

VII. EFFECTS OF INFORMATION TRANSFER

18. Insilco received from Lingemann competitively sensitive

information prior to the consummation of the Acquisitions, that,

but for the consummation of the Acquisitions, may have

detrimentally affected competition in the relevant markets.

VIII. VIOLATIONS CHARGED

19. The effects of the Acquisitions may be substantially to

lessen competition or tend to create a monopoly in violation of 
5

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

the FTC Act, 15 U.S.C. § 45.

20. Insilco, through the Acquisitions, has engaged in

unfair methods of competition in or affecting commerce in

violation of Section 5 of the FTC Act, 15 U.S.C. § 45.

21. Prior to the Acquisitions, Insilco requested and

received from Lingemann Non-Aggregated, Customer-Specific 

Information about customers for which they both competed in the

relevant product markets in violation of Section 5 of the FTC

Act, 15 U.S.C. § 45.

WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade

Commission on this twenty-seventh day of January, 1998, issues

its Complaint against said respondent.

By the Commission, Commissioner Swindle not participating.

Benjamin I. Berman

Acting Secretary