IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

FEDERAL TRADE COMMISSION, 

Civil Action No. 1:19-cv-02337-TJK

REDACTED VERSION OF 

DOCUMENT FILED UNDER SEAL

Plaintiff,

v.

RAG-STIFTUNG,

EVONIK INDUSTRIES AG,

EVONIK CORPORATION,

EVONIK INTERNATIONAL HOLDING 

B.V.,

ONE EQUITY PARTNERS SECONDARY 

FUND, L.P.,

ONE EQUITY PARTNERS V, L.P.,

LEXINGTON CAPITAL PARTNERS VII 

(AIV I), L.P.,

PEROXYCHEM HOLDING COMPANY 

LLC,

PEROXYCHEM HOLDINGS, L.P.,

PEROXYCHEM HOLDINGS LLC,

PEROXYCHEM LLC,

AND

PEROXYCHEM COOPERATIEF U.A.,

Defendants.

MEMORANDUM IN SUPPORT OF PLAINTIFF’S

MOTION FOR PRELIMINARY INJUNCTION

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TABLE OF CONTENTS 

INTRODUCTION .......................................................................................................................... 1

BACKGROUND ............................................................................................................................ 2

ARGUMENT .................................................................................................................................. 8

I. The FTC Is Likely to Succeed on the Merits at the Administrative Hearing ................... 10

A. The Proposed Acquisition Is Presumptively Unlawful ............................................... 12

1. The Relevant Product Market is the Sale of H2O2, Excluding ElectronicsGrade H2O2 ................................................................................................................ 13

2. The Southern and Central United States and the Pacific Northwest Each 

Constitute a Relevant Geographic Market .................................................................. 18

3. The Proposed Acquisition Is Presumptively Illegal Because It Would Create 

Extraordinarily High Market Shares and Concentration in a Relevant Market .......... 21

4. The Documented History of Coordination in the H2O2 Industry Strengthens 

the Presumption .......................................................................................................... 23

5. Competitive Effects Evidence Corroborates the Presumption of Illegality ................ 24

B. Defendants Cannot Rebut the Strong Presumption of Illegality ................................. 32

1. Entry and Expansion Will Not Be Timely, Likely, and Sufficient to Replace 

the Competition Eliminated by the Acquisition .......................................................... 33

2. Defendants Have Not Demonstrated Sufficient Efficiencies ...................................... 35

3. Defendants’ Proposed Divestiture Does Not Resolve Competitive Concerns ........... 37

II. THE EQUITIES HEAVILY FAVOR A PRELIMINARY INJUNCTION ..................... 39

CONCLUSION ............................................................................................................................. 40

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TABLE OF AUTHORITIES 

Cases

Brown Shoe Co. v. United States, 370 U.S. 294 (1962) ............................................. 10, 11, 13, 18 

Ford Motor Co. v. United States, 405 U.S. 562 (1972) ................................................................ 37 

FTC v. Arch Coal, 329 F. Supp. 2d 109 (D.D.C. 2004) ................................................................. 9 

FTC v. Cardinal Health, Inc., 12 F. Supp. 2d 34 (D.D.C. 1998) ........................................... 18, 23 

*FTC v. CCC Holdings Inc., 605 F. Supp. 2d 26 (D.D.C. 2009) .......................................... passim 

*FTC v. Elders Grain, Inc., 868 F.2d 901 (7th Cir. 1989) ........................................... 1, 10, 11, 24 

FTC v. Food Town Stores, Inc., 539 F.2d 1339 (4th Cir. 1976) ................................................... 37 

*FTC v. H.J. Heinz Co., 246 F.3d 708 (D.C. Cir. 2001) ....................................................... passim 

FTC v. Illinois Cereal Mills, Inc., 691 F. Supp 1131 (N.D. Ill. 1988) ............................. 13, 14, 40 

FTC v. PPG Industries, 798 F.2d 1500 (D.C. Cir. 1986) ............................................................. 40 

FTC v. ProMedica Health Sys., Inc., No. 3:11-cv-47, 2011 WL 1219281 (N.D. Ohio Mar. 29, 

2011) ................................................................................................................................... 39, 40 

*FTC v. Staples, Inc., 190 F. Supp. 3d 100 (D.D.C. 2016) (“Staples II”) ............................. passim 

FTC v. Staples, Inc., 970 F. Supp. 1066 (D.D.C. 1997) (“Staples I”) ................................ 1, 11, 13 

FTC v. Swedish Match, 131 F. Supp. 2d 151 (D.D.C. 2000) ............................................ 21, 22, 23 

*FTC v. Sysco Corp., 113 F. Supp. 3d 1 (D.D.C. 2015)........................................................ passim 

*FTC v. Tronox Ltd., 332 F. Supp. 3d 187 (D.D.C. 2018) ........................................... 9, 23, 27, 28 

FTC v. University Health, 938 F.2d 1206 (11th Cir. 1991) .......................................................... 36 

FTC v. Weyerhaeuser Co., 665 F.2d 1072 (D.C. Cir. 1981) .................................................. 39, 40 

FTC v. Whole Foods Mkt., Inc., 548 F.3d 1028 (D.C. Cir. 2008) ................................................ 40 

*FTC v. Wilh. Wilhelmsen ASA, 341 F. Supp. 3d 27 (D.D.C. 2018) ..................................... passim 

Hospital Corp. of Am. v. FTC, 806 F.2d 1381 (7th Cir. 1986) ..................................................... 25 

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In re Polypore Int’l Inc., 150 FTC 586 (2010), aff’d, Polypore Int’l, v. FTC, 686 F.3d 1208 (11th 

Cir. 2012) .................................................................................................................................. 18 

Saint Alphonsus Med. Ctr. – Nampa Inc. v. St. Luke’s Health Sys., Ltd., 778 F.3d 775 (9th Cir. 

2015) ......................................................................................................................................... 36 

United States v. Aetna Inc., 240 F. Supp. 3d 1 (D.D.C. 2017) ............................................... 37, 38 

United States v. Anthem, Inc., 855 F.3d 345 (D.C. Cir. 2017) ............................................... 23, 36 

*United States v. Baker Hughes Inc., 908 F.2d 981 (D.C. Cir. 1990) ................................... passim 

United States v. Citizens & Southern Nat’l Bank, 422 U.S. 86 (1975) ............................. 11, 12, 32 

United States v. Dairy Farmers of America, Inc., 426 F.3d 850 (6th Cir. 2005) ......................... 37 

*United States v. H&R Block, Inc., 833 F. Supp. 2d 36 (D.D.C. 2011) ................................ passim 

United States v. Marine Bancorp., 418 U.S. 602 (1974) .............................................................. 13 

United States v. Phila. Nat’l Bank, 374 U.S. 321 (1963) ....................................................... 11, 21 

Statutes

15 U.S.C. § 18 ........................................................................................................................... 8, 10 

15 U.S.C. § 45 ................................................................................................................................. 8 

15 U.S.C. § 53(b) ............................................................................................................................ 8 

Other Authorities

4 Phillip E. Areeda, Herbert Hovenkamp & John L. Solow, Antitrust Law ¶ 901b2 (rev. ed. 

1998) ................................................................................................................................... 10, 25 

*U.S. Dep't of Justice and Federal Trade Commission Horizontal Merger Guidelines (2010)

............................................................................................................................................ passim 

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INTRODUCTION

The FTC seeks a preliminary injunction to enjoin Evonik’s proposed acquisition of 

PeroxyChem (“the Acquisition”), which would combine two of only five hydrogen peroxide 

producers in North America. Hydrogen peroxide (“H2O2”) is a commodity chemical used in a 

range of industrial applications, including in the pulp and paper, textile, mining, energy, food and 

beverage, and consumer product industries. If allowed to proceed, the Acquisition would create a 

firm accounting for nearly of H2O2 sales (by revenue or by volume) in the Southern and 

Central United States, and nearly of sales in the Pacific Northwest. It would eliminate direct 

head-to-head competition between Evonik and PeroxyChem, and increase the risk of 

coordination among the few remaining firms in markets with an extensive history of 

anticompetitive behavior, including guilty pleas for criminal price fixing, private price-fixing 

litigation, and substantial fines and settlements. 

 Under case law in this Circuit, the Acquisition would increase market concentration well 

beyond what is required to create “a presumption that the transaction will substantially lessen 

competition.” FTC v. Staples, Inc., 970 F. Supp. 1066, 1083 (D.D.C. 1997) (“Staples I”); see

also FTC v. Staples, Inc., 190 F. Supp. 3d. 100, 115 (D.D.C. 2016) (“Staples II”). This 

presumption is buttressed by substantial evidence that the Acquisition threatens to harm 

competition, based on current competitive conditions and industry history. FTC v. Elders Grain, 

Inc., 868 F.2d 901, 906 (7th Cir. 1989) (“an acquisition which reduces the number of significant 

sellers in a market already highly concentrated and prone to collusion by reason of its history and 

circumstances is unlawful in the absence of special circumstances”) (emphasis added).

There are no special circumstances to justify clearing this Acquisition, and 

Defendants will not be able to rebut the presumption of illegality. Defendants’ proposed 

divestiture – selling the smallest H2O2 plant in the Pacific Northwest – does nothing to solve 

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competitive concerns in the Southern and Central United States, and serious questions remain as 

to whether it even restores competition in the Pacific Northwest. Solvay, the second-largest 

H2O2 producer in the market, modeled several scenarios related to the Acquisition (including 

multiple Pacific Northwest divestiture scenarios) and 

1

 Likewise, neither current competition, entry and expansion, nor efficiencies will offset 

the likely anticompetitive effects of the Acquisition. 

 The FTC has initiated an administrative proceeding, set to begin on January 22, 2020, to 

determine on the merits whether the Acquisition violates the antitrust laws. The FTC’s request 

for a preliminary injunction here seeks only to maintain the status quo and prevent Defendants 

from closing the Acquisition before the Commission can render a decision in the administrative 

proceeding. FTC v. H.J. Heinz Co., 246 F.3d 708, 714 (D.C. Cir. 2001). In this Circuit, a 

transaction must be enjoined to allow the FTC to conduct an administrative inquiry into the 

merits where the FTC “raise[s] 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 administrative proceeding. Id. at 714-15. Given the strong 

presumption of illegality, the supporting evidence of likely anticompetitive effects, and the lack 

of offsetting procompetitive justifications, the Court should enjoin this illegal Acquisition 

pending that full administrative proceeding on the merits. 

BACKGROUND

Evonik – previously operating as Degussa – is based in Germany, employs over 32,000 

people,2

 and produces and sells H2O2 through its Active Oxygens business line, which operates 

1

 PX3037-031-43. 

2

 PX7100 ¶ 26.

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. Defendants compete for customers located 

in the Southern and Central United States and in the Pacific Northwest.11

H2O2 is a commodity chemical used in a variety of industrial applications.12 The pulp 

and paper industry accounts for the majority of H2O2 consumption in North America.13

Additional end use applications include the oil and gas, environmental, chemical synthesis, 

mining, food and beverage, and home and personal care segments.14 While producers market 

different “grades” of H2O2, producers are largely all able to make and sell the same grades for 

the same sets of end uses.15

As one would expect of a commodity, the H2O2 production process is largely the same 

for every producer, and involves moving a working solution through three basic steps: 1) 

hydrogenation, 2) oxidation, and 3) extraction, which results in “crude” H2O2.16 This crude 

H2O2 is then purified (through distillation or filtration), brought to a specific concentration level, 

and stabilized with chemical additives.17 The precise combination of purity level, concentration, 

and stabilization package may vary depending on the grade of H2O2, but within each grade the 

11 Defendants’ Answer proposes divesting PeroxyChem’s plant in Prince George, British 

Columbia to a new entrant. Dkt. Nos. 22, 23. Based on this proposal, the Acquisition (as 

described by Defendants) would not immediately reduce the number of competitors with plants 

located in the Pacific Northwest. However, serious questions remain as to whether this proposed 

divestiture is sufficient to address competitive concerns in the Pacific Northwest. 

12 See, e.g., PX2364-003; PX1012-001; ; ; ; 

. 13 PX9001-017; see also . 14 PX1234-10.

15 ; PX6004 at 56-57; PX6009 at 72-73; PX6010 at 64-65; ; see also 

PX6018 at 82-83.

16 PX6010 at 42-43; PX6004 at 54-55; see also Dkt. Nos. 22, 23. 

17 See, e.g., PX6010 at 44, 46-47; PX6002 at 31-32; PX 6004 at 90-91; PX6018 at 31-32. 

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Perhaps not surprisingly, given the commodity nature of the product and the highly 

concentrated market with few suppliers, the H2O2 industry has an extensive history of pricefixing, involving guilty pleas, litigation, and substantial fines and settlements. In 2006, Evonik’s 

predecessor, Degussa, entered into an antitrust leniency agreement with the U.S. Department of 

Justice (“DOJ”), admitting its role in an H2O2 price-fixing conspiracy in North America.33 Two 

other H2O2 producers, Solvay and AkzoNobel (Nouryon’s predecessor), were charged with 

“conspiring with their competitors to fix the price of hydrogen peroxide sold in the United 

States,”34 and agreed to pay criminal fines totaling more than $72 million in the United States.35

Following DOJ’s criminal price fixing investigation, H2O2 customers filed class action 

suits against all producers of H2O2 in the United States, including Degussa and FMC 

(PeroxyChem’s predecessor), alleging antitrust harm from the price fixing conspiracy.36 Degussa 

settled for $21 million, and FMC settled for $10 million.37 While FMC denied that it engaged in 

price fixing, its economic expert in the private litigation described H2O2 market dynamics in 

significant detail in his expert report, stating that FMC acted as a by 

 and being 

38

Although certain behaviors—including the swap agreements and exchanges of price 

33 See generally PX1293; PX1294; see also Dkt. No. 22. 

34 PX9031-001.

35 See PX9031-001. The European Commission (“EC”) has likewise found price fixing behavior 

in the European H2O2 market, in 1984 and 2006, with participants in the price fixing conspiracy 

(including Degussa and FMC) paying combined fines of over €388 million. PX9032-001. The 

Canadian Competition Bureau also fined Solvay $2.5 million after pleading guilty to criminal 

charges for fixing the price of hydrogen peroxide. PX9035-001.

36 See In re Hydrogen Peroxide Antitrust Litig., 401 F. Supp. 2d 451, 454-55 (E.D. Pa. 2005). 

37 PX9036-001. 

38 PX2331-022, 027. 

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stipulated temporary restraining order that prohibits Defendants from merging pending the 

outcome of the FTC’s motion for a preliminary injunction. Dkt. No. 9.

When pursuing a preliminary injunction under Section 13(b), the FTC is “not held to the 

high thresholds applicable where private parties seek interim restraining orders.” FTC v. Tronox 

Ltd., 332 F. Supp. 3d 187, 197 (D.D.C. 2018) (quoting Heinz, 246 F.3d at 714). Instead Section 

13(b) creates a “unique public interest standard,” under which an injunction should issue 

whenever the relief “would be in the public interest—as determined by a weighing of the equities 

and a consideration of the [FTC’s] likelihood of success on the merits.” Heinz, 246 F.3d at 714. 

The FTC’s “likelihood of success on the merits” is evaluated by “measur[ing] the probability 

that, after an administrative hearing on the merits, the Commission will succeed in proving that 

the effect of the [proposed transaction] may be substantially to lessen competition in violation of 

the Clayton Act.” Tronox, 332 F. Supp. 3d at 197 (quoting FTC v. Sysco Corp., 113 F. Supp. 3d 

1, 22 (D.D.C. 2015) (emphasis added).43 If the FTC demonstrates a likelihood that it will prevail 

after an administrative hearing on the merits, an injunction should issue, as the “public interest in 

effective enforcement of the antitrust laws is of primary importance,” and “a showing of likely 

success on the merits will presumptively warrant an injunction.” Id. at 198 (quoting FTC v. Arch 

Coal, 329 F. Supp. 2d 109, 116 (D.D.C. 2004).

As explained below, the FTC has a high likelihood of prevailing at the administrative 

hearing, as the Acquisition will increase concentration to the point that the FTC benefits from a 

well-established “presumption” of illegality. Tronox, 332 F. Supp. 3d at 197 (citing United States 

v. Baker Hughes Inc., 908 F.2d 981, 982 (D.C. Cir. 1990)). Moreover, “an acquisition which 

43 See also Heinz, 246 F.3d at 714 (to obtain a preliminary injunction it is not necessary for the 

FTC to establish that “the proposed merger would in fact violate section 7 of the Clayton Act.”); 

FTC v. CCC Holdings Inc., 605 F. Supp. 2d 26, 67 (D.D.C. 2009). 

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reduces the number of significant sellers in a market already highly concentrated and prone to 

collusion by reason of its history and circumstances is unlawful in the absence of special 

circumstances.” Elders Grain, 868 F.2d at 906 (emphasis added). There are no special 

circumstances that would justify clearing this Acquisition. To the contrary, the presumption of 

illegality here is buttressed by substantial evidence that the Acquisition threatens to increase the 

likelihood of coordinated interaction among the few remaining H2O2 producers. As explained 

by the Court of Appeals, “[t]acit coordination ‘is feared by antitrust policy even more than 

express collusion, for tacit coordination, even when observed, cannot easily be controlled 

directly by the antitrust laws. It is a central object of merger policy to obstruct the creation or 

reinforcement by merger of such oligopolistic market structures in which tacit coordination can 

occur.’” Heinz, 246 F.3d at 725 (quoting 4 Phillip E. Areeda, at. al., Antitrust Law ¶ 901b2, at 9 

(rev. ed. 1998) (emphasis added)). Moreover, the Acquisition will eliminate direct competition 

between Evonik and PeroxyChem, which benefits customers today. 

I. The FTC Is Likely to Succeed on the Merits at the Administrative Hearing 

At the administrative hearing, the FTC will demonstrate that the Acquisition violates 

Section 7 of the Clayton Act, which bars mergers or acquisitions “the effect of [which] may be 

substantially to lessen competition, or to tend to create a monopoly” in “any line of commerce 

or . . . activity affecting commerce in any section of the country.” 15 U.S.C. § 18. “Congress 

used the words ‘may be substantially to lessen competition’ . . . to indicate that its concern was 

with probabilities, not certainties.” Heinz, 246 F.3d at 713 (quoting Brown Shoe Co. v. United 

States, 370 U.S. 294, 323 (1962)). As a result, “certainty, even a high probability, need not be 

shown.” Elders Grain, 868 F.2d at 906. Instead, an acquisition violates Section 7 if it “create[s] 

an appreciable danger of [anticompetitive consequences] in the future. A predictive judgment, 

necessarily probabilistic and judgmental rather than demonstrable, is called for.” Heinz, 246 F.3d 

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at 719 (quotation omitted). Where uncertainty exists as to the likelihood of harm, “doubts are to 

be resolved against the transaction.” Elders Grain, 868 F.2d at 906; see also Brown Shoe, 370 

U.S. at 323. A merger’s “probable” effects on competition are at issue because Section 7 of the 

Clayton Act is intended to arrest anticompetitive mergers “in their ‘incipiency.’” United States v. 

Phila. Nat’l Bank, 374 U.S. 321, 362 (1963) (quoting Brown Shoe, 370 U.S. at 317, 322). 

The FTC bears the initial burden of showing the Acquisition would result in “undue 

concentration in the market for a particular product in a particular geographic area.” FTC v. Wilh.

Wilhelmsen ASA, 341 F. Supp. 3d 27, 44 (D.D.C. 2018) (quoting Baker Hughes, 908 F. 2d at 

982). “Such a showing entitles the FTC to a presumption that the merger will substantially lessen 

competition.” Id.; see also Baker Hughes, 908 F.2d at 982 (citing United States v. Citizens & 

Southern Nat’l Bank, 422 U.S. 86, 120-22 (1975)); Staples I, 970 F. Supp. at 1083; Heinz, 246 

F.3d at 715; Staples II, 190 F. Supp. 3d at 115. Here, the Acquisition would result in the 

Defendants controlling nearly of H2O2 sales by revenue and volume in the Southern and 

Central United States,44 with more than of the H2O2 sales in the hands of three suppliers—

Evonik, .45 The market in the Pacific Northwest is even more highly 

concentrated. Absent Defendants’ proposed divestiture, the Acquisition would combine two of 

only three significant competitors and give Defendants control of nearly of H2O2 sales.46

These concentration levels, and increases in concentration, are well above the threshold needed 

to establish a presumption that the Acquisition is unlawful. See Staples II, 190 F. Supp. 3d at 

131.

Once the FTC establishes a prima facie violation of Section 7, the burden shifts to 

44 PX7100 ¶ 111, Ex. 2-1 through 2-5. 

45 PX7100 Ex. 2-1 through 2-5.

46 PX7100 ¶ 111, Ex. 2-1 through 2-5. 

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Defendants to rebut the presumption by “produc[ing] evidence that ‘show[s] that [] market-share 

statistics [give] an inaccurate account of the [merger’s] probable effects on competition’ in the 

relevant market.” Heinz, 246 F.3d at 715 (quoting Citizens & Southern Nat’l Bank, 422 U.S. at 

120). Defendants bear a particularly heavy burden of production where, as here, they confront a 

strong prima facie case. See Wilhelmsen, 341 F. Supp. 3d at 66 (“Given that the FTC has made 

out a strong prima facie case, Defendants must make out a correspondingly strong rebuttal 

showing.”); Staples II, 190 F. Supp. 3d at 115 (“‘The more compelling the prima facie case, the 

more evidence the defendant must present to rebut it successfully.’”) (quoting Baker Hughes,

902 F.2d at 991); United States v. H&R Block, Inc., 833 F. Supp. 2d 36, 72 (D.D.C. 2011).47

Defendants will be unable to meet this burden. The divestiture Defendants have proposed 

in the Pacific Northwest does nothing to address the Acquisition’s likely anticompetitive effects 

in the Southern and Central United States, and serious questions remain as to whether it even 

restores competition in the Pacific Northwest. Defendants will not be able to show that current 

competition, entry and expansion, or efficiencies will offset the likely anticompetitive effects of 

the Acquisition. Rather, the FTC will present evidence that the combination of Evonik and 

PeroxyChem threatens to harm competition, buttressing the presumption of illegality and the 

FTC’s likelihood of success on the merits. See Sysco, 113 F. Supp. 3d at 61; Staples II, 190 F. 

Supp. 3d at 131. 

A. The Proposed Acquisition Is Presumptively Unlawful 

Courts typically assess whether a merger violates Section 7 by determining: (1) the “line 

of commerce,” or relevant product market; (2) the “section of the country,” or relevant 

geographic market; and (3) the merger’s probable effect on competition in the relevant product 

47 Even under the burden-shifting framework, the burden of persuasion remains at all times with 

the FTC. Staples II, 190 F. Supp. 3d at 116. 

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and geographic markets. See United States v. Marine Bancorp., 418 U.S. 602, 618-23 (1974); 

Staples I, 970 F. Supp. at 1072. Courts often rely on the principles expressed in the FTC and 

DOJ Horizontal Merger Guidelines (“Merger Guidelines”) to define the market.48 See, e.g.,

Heinz, 246 F.3d at 716 n.9, 718; CCC Holdings, 605 F. Supp. 2d at 37. The purpose of market 

definition under the Merger Guidelines is to “specify the line of commerce and section of the 

country in which the competitive concern arises” and “identify market participants and measure 

market shares and market concentrations.” Merger Guidelines § 4. Here, the product and 

geographic markets in which the Acquisition would substantially increase concentration and 

lessen competition in the market are the markets for the sale of H2O2 (excluding electronicsgrade H2O2) in the Southern and Central United States and the Pacific Northwest. 

1. The Relevant Product Market is the Sale of H2O2, Excluding ElectronicsGrade H2O2 

The Supreme Court in Brown Shoe established that “[t]he outer boundaries of a product 

market are determined by the reasonable interchangeability of use or the cross-elasticity of 

demand between the product itself and substitutes for it.” Brown Shoe, 370 U.S. at 325. Thus, 

“courts look at ‘whether two products can be used for the same purpose and, if so, whether and 

to what extent purchasers are willing to one substitute for the other.’” H&R Block, 833 F. Supp. 

2d at 51 (internal citation omitted). In addition to demand side factors, the Court in Brown Shoe

also noted that substitutability on the supply side – the ability of production facilities to adjust 

product mix – may also be an important factor in defining the relevant market. Brown Shoe, 370 

U.S. at 325 n.42; see also FTC v. Illinois Cereal Mills, Inc., 691 F. Supp 1131, 1141 (N.D. Ill. 

48 “The Merger Guidelines are not binding, but the Court of Appeals and other courts have 

looked to them for guidance in previous merger cases.” Sysco, 113 F. Supp. 3d at 38 (internal 

citation omitted). 

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1988). In determining the relevant product market, courts look to ordinary course business 

documents, testimony from market participants, and economic analysis. H&R Block, 833 F. 

Supp. 2d at 52.

Here, the appropriate relevant product market within which to evaluate the competitive 

effects of the Acquisition is the sale of H2O2 (excluding electronics grade H2O2). H2O2 is a 

commodity chemical serving an important function in a range of applications, where its 

effectiveness and environmental benefits (it breaks down into water and oxygen) make it 

difficult to replace.49 Thus, the competition that matters here is competition among H2O2 

producers. See Illinois Cereal Mills, 691 F. Supp. 1131 at 1141 (“the overriding principle [of 

market definition] is to identify meaningful competition where it actually exists”). While 

Defendants may argue that markets should be defined around individual grades of H2O2 or end 

uses, this is flatly inconsistent with prior statements. Evonik explicitly told the European 

Commission (“EC”) during its investigation of the Acquisition that “ 

”50 Moreover, it doesn’t matter whether narrower submarkets could be defined within the H2O2 market, because the merger would be presumptively 

illegal in most, if not all, of such narrower markets. Because H2O2 producers can and do alter 

the mix of H2O2 grades they produce, the exact same group of H2O2 producers included in the 

FTC’s relevant market would be present in any meaningful narrower market. Consistent 

testimony from customers, competitors, and Defendants themselves, buttressed by ordinary 

course documents and economic analysis conducted by Dr. Dov Rothman, Plaintiff’s economic 

expert, all supports H2O2 as the appropriate relevant market. 

49 PX9001-007; . 

50 PX1201-012. 

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from various market participants, (ii) analyzing multiple data sources from both merging parties 

and other suppliers, and (iii) implementing several versions of the hypothetical monopolist test, 

Dr. Rothman concluded that a hypothetical monopolist supplier of H2O2 (excluding electronicsgrade) could profitably impose a SSNIP, thus satisfying the hypothetical monopolist test.71

2. The Southern and Central United States and the Pacific Northwest Each 

Constitute a Relevant Geographic Market

Under the Clayton Act, a relevant geographic market is the area to which customers “can 

practically turn for alternative sources of the product and in which the antitrust defendants face 

competition.” FTC v. Cardinal Health, Inc., 12 F. Supp. 2d 34, 49 (D.D.C. 1998) (citation 

omitted). A relevant geographic market must “correspond to the commercial realities of the 

industry” as determined by a “pragmatic, factual approach” to assessing the industry. Brown

Shoe, 370 U.S. at 336. Where, as here, suppliers set prices based on customer locations, and 

customers cannot avoid targeted price increases through arbitrage, the relevant geographic 

market may be defined around the locations of customers. See In re Polypore Int’l Inc., 150 FTC 

586 at *16 (2010), aff’d, Polypore Int’l v. FTC, 686 F.3d 1208 (11th Cir. 2012) (applying 

Merger Guidelines § 4.2.2). This comports with the intuitively obvious proposition that where 

transportation costs for a product are high, a firm could profitably impose a small but significant 

price increase on customers in a region for which the firm is a monopoly supplier of the product, 

even if the firm sells the same product in other regions in which the firm faces competition. See 

Merger Guidelines § 4.2.2 (where “customers cannot avoid targeted price increases through 

arbitrage, suppliers may be able to exercise market power over customers located in a particular 

geographic region, even if a price increase to customers located in other geographic regions 

would be unprofitable.”).

71 PX7100 ¶¶ 62-78. 

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Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, Mississippi, 

North Carolina, North Dakota, Nebraska, New Mexico, Nevada, Ohio, Oklahoma, South 

Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and West Virginia. 

Dr. Rothman concludes that grouping customers in these states is appropriate because 

customers in these states face largely the same competitive conditions.80 As the market is defined 

around customer location, not around the location of H2O2 plants, current sales into the relevant 

market are the best indicator of competitive significance. Customers in the Southern and Central 

United States purchase almost exclusively from one of five suppliers, and receive approximately 

 of their shipments from the suppliers’ plants in the southern United States.81

Dr. Rothman’s analysis is confirmed by Defendants’ ordinary course documents and 

testimony,82 which confirm that the majority of customers in this region are served from plants in 

the southern United States,83 and that competitive conditions in this region differ from other 

areas of North America.84

b. The “Pacific Northwest” Constitutes One Relevant Geographic Market

Similarly, ordinary course documents and expert analysis demonstrate that the proposed 

Acquisition’s probable effect on competition should be assessed within a geographic market of 

the “Pacific Northwest,” which consists of Washington, Oregon, Montana, Idaho, and Wyoming 

in the United States, along with British Columbia, Alberta, Manitoba, and Saskatchewan in 

Canada. As in the Southern and Central United States, customers in this region receive 

80 PX7100 ¶ 94. 

81 PX7100 ¶ 95, Ex. 1-1 and 1-2. 

82 See, e.g., PX6005 at 76-77. 

83 PX1469-018-22. 

84 See, e.g., PX2058-057; PX6002 at 97-98, 111. 

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approximately of their shipments from suppliers’ plants in the Pacific Northwest.85

Likewise, ordinary course documents confirm that competitive conditions in the Pacific 

Northwest justify grouping customers in this region as a distinct geographic market.86 A 

PeroxyChem strategic presentation indicates that in this region, .87

Indeed, a senior sales and marketing executive at PeroxyChem indicated that they 

.

88 Customers confirm that 

the competitive conditions in the Pacific Northwest are distinct.89 Indeed, the parties appear to 

concede that the Pacific Northwest constitutes a relevant geographic market, arguing that the 

divestiture of PeroxyChem’s Prince George facility will address any competitive concerns within 

that region. See infra Section I.B.3.

3. The Proposed Acquisition Is Presumptively Illegal Because It Would Create 

Extraordinarily High Market Shares and Concentration in a Relevant 

Market

Acquisitions that significantly increase economic concentration are presumptively 

unlawful. Phila. Nat’l Bank, 374 U.S. at 363. Courts assess an acquisition’s presumptive 

illegality by considering the Defendants’ shares of the relevant market and employing a simple 

statistical measure of market concentration called the Herfindahl-Hirshman Index (“HHI”). 

Wilhelmsen, 341 F. Supp. 3d at 58-59; Sysco, 113 F. Supp. 3d at 52-53; Heinz, 246 F.3d at 716; 

FTC v. Swedish Match, 131 F. Supp. 2d 151, 166-67 (D.D.C. 2000). HHIs are calculated by 

summing the squares of each market participant’s individual market share both pre- and post85 PX7100 ¶ 95, Ex. 1-1 and 1-2. 

86 PX1003-002; PX1012-001. 

87 PX2058-057; see also PX6002 at 97-98, 111. 

88 PX2113-001. 

89 See, e.g., .

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acquisition.90 See Sysco, 113 F. Supp. 3d at 52-53; Heinz, 246 F.3d at 716; Swedish Match, 131 

F. Supp. 2d at 166-67. If an acquisition increases the HHI within a relevant market by more than 

200 points and results in a post-acquisition HHI exceeding 2,500, it is presumptively 

anticompetitive. Merger Guidelines § 5.3;91 Wilhelmsen, 341 F. Supp. 3d at 59; Sysco, 113 F. 

Supp. 3d at 52-53.

In his report, Dr. Rothman uses sales data collected from Defendants and other H2O2 

producers to estimate the approximate size of the market for the sale of H2O2 to customers in the 

Southern and Central United States and the Pacific Northwest. Using these data, Evonik controls 

at least of sales by revenue and volume, and PeroxyChem controls at least in the 

Southern and Central United States.92 The Acquisition would result in Evonik controlling more 

than of sales by revenue and volume with an HHI in excess of and a post-Acquisition 

increase of at least in the Southern and Central United States.93 In the Pacific Northwest, 

these shares and concentration levels are even higher, with Evonik controlling at least of 

sales by revenue and volume, and PeroxyChem controlling at least .94 Post-Acquisition, 

Evonik would control more than of sales by revenue and volume in the Pacific Northwest, 

with an HHI in excess of and a post-Acquisition increase of at least .95

These figures blow past the thresholds that trigger a presumption of illegality—the postAcquisition increase in concentration alone is more than five times the point at which the Merger 

90 PX7100 ¶ 106, n.119. 

91 The Merger Guidelines state: “Mergers resulting in highly concentrated markets [HHI above 

2500] that involve an increase in the HHI of more than 200 points will be presumed to be likely 

to enhance market power. The presumption may be rebutted by persuasive evidence showing that 

the merger is unlikely to enhance market power.” Merger Guidelines § 5.3. 

92 PX7100 ¶ 111, Ex. 2-1. 

93 Id.

94 Id.

95 Id.

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presumption resulting from market concentration statistics, and emphasizes the strong risk of 

anticompetitive effects here. Indeed, as the Seventh Circuit observed: “The theory of competition 

and monopoly that has been used to give concrete meaning to section 7 teaches that an 

acquisition which reduces the number of significant sellers in a market already highly 

concentrated and prone to collusion by reason of its history and circumstances is unlawful in the 

absence of special circumstances.” Elders Grain, 868 F.2d at 906 (emphasis added). No special 

circumstances are present here. 

Under the Merger Guidelines, a market is presumed vulnerable to coordination where 

“firms representing a substantial share in the relevant market appear to have previously engaged 

in express collusion affecting the relevant market, unless competitive conditions in the market 

have changed significantly.” Merger Guidelines § 7.2. The extensive history of price-fixing 

among H2O2 producers here is well-documented, and Defendants cannot point to any change 

that suggests the market is no longer vulnerable to coordination. To the extent competitive 

conditions have changed, the industry may be more conducive to coordination today because of 

the reduced number of competitors—Kemira exited the H2O2 market when it sold its Maitland 

plant to Evonik in 2011.106 Otherwise, the H2O2 remains the same; the H2O2 production 

remains the same; and the H2O2 plants remain the same.107

5. Competitive Effects Evidence Corroborates the Presumption of Illegality 

The FTC’s strong prima facie case is bolstered by ordinary-course documents and 

testimony evincing a significant risk that the Acquisition will increase the risk anticompetitive 

coordination and eliminate direct competition between Defendants. 

106 PX9001-033; PX1277-004. 

107 PX1313-019-20; PX9001-018; PX2330-007. 

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a. The Proposed Acquisition Would Increase the Likelihood of Coordination 

in an Already Vulnerable Market 

While an extensive history of express collusion raises obvious concerns, the FTC need 

not show a likelihood of price-fixing in order to prevail in a merger case. Rather, Section 7 cases 

are primarily concerned with tacit coordination. Section 7 of the Clayton Act presumes a 

significant increase in concentration to be unlawful because merger law “rests upon the theory 

that, where rivals are few, firms will be able to coordinate their behavior, either by overt 

collusion or implicit understanding, in order to restrict output and achieve profits above 

competitive levels.” Heinz, 246 F.3d at 715 (internal quotation marks omitted). Coordination 

includes conduct ranging from outright to tacit collusion. As explained by this Circuit, “[t]acit 

coordination ‘is feared by antitrust policy even more than express collusion, for tacit 

coordination . . . cannot easily be controlled directly by the antitrust laws. It is a central object of 

merger policy to obstruct the creation or reinforcement by merger of such oligopolistic market 

structures in which tacit coordination can occur.’” Heinz, 246 F.3d at 725 (emphasis added) 

(quoting 4 Phillip E. Areeda, Herbert Hovenkamp & John L. Solow, Antitrust Law ¶ 901b2, at 9 

(rev. ed. 1998)).

Here, there is no question that this market is vulnerable to coordination, whether express 

or tacit. The Merger Guidelines establish factors for determining whether a market is vulnerable 

to coordinated conduct, including a small number of competing firms, the relative homogeneity 

of products, and low price elasticity of demand. Merger Guidelines § 7.2; see also Hospital 

Corp. of Am. v. FTC, 807 F.2d 1381, 1387 (7th Cir. 1986) (“The fewer competitors there are in a 

market, the easier it is for them to coordinate their pricing without committing detectable 

violations of section 1 of the Sherman Act, which forbids price fixing.”). Here, the H2O2 market 

is highly concentrated, with a small number of firms who have remained the same over the years, 

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industry publications.119

Finally, the Merger Guidelines consider mutual interdependence, as the understanding 

that all firms stand to benefit from avoiding aggressive competition increases the likelihood that 

firms will expect aggressive competition to beget aggressive competition. See Merger Guidelines 

§ 7.2. Defendants and other H2O2 suppliers recognize their strategic interdependence, including 

avoiding price wars,120 preventing price spirals,121 and operating with a high level of 

discipline.122 Evonik’s General Manager for the Americas stated that Evonik 

123 In both 2014 and 2015, multiple producers announced 

simultaneous price increases in North America.124 Similarly, an Evonik presentation describes 

the North American and European H2O2 markets as 

 but while ”125

Once it is established that the market is vulnerable to coordination, the Merger Guidelines 

then ask how the merger will increase the likelihood of coordinated interaction. See Merger 

Guidelines § 7.1. Courts in this Circuit look to “[t]he available real-world evidence” to evaluate 

whether the “merger raises serious and substantial questions about likely anticompetitive 

effects.” Tronox, 332 F. Supp. 3d at 210. Here, the Acquisition increases the risk of coordination 

by eliminating a major competitor in a concentrated market already vulnerable to coordination, 

and strengthens and reinforces existing oligopolistic market dynamics. The economic expert of 

119 PX1297-001; PX6000 at 65-66, 128; PX6005 at 19-20; PX9001-016 – 019. 

120 See, e.g., PX2339-001; PX1290-001; PX2338-002-03; PX2340-001; PX1359-001; PX1356-

001; PX1357-034; PX2337-001; PX1358-008. 

121 See, e.g., PX2190-001. 

122 See, e.g., PX2001-001. 

123 PX1073-001. 

124 See, e.g., ; PX2055-004; PX2356-017; PX2193-001; see also PX6005 at 96; 

PX6007 at 169-70. 

125 PX1320-030. 

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FMC (PeroxyChem’s predecessor) in the price fixing litigation acknowledged in his expert 

report: “

”126 He went on to argue that FMC 

127

More recently, PeroxyChem acknowledged that 

128

Evonik has a history of prioritizing price over volume,129 and acquiring plants in North 

America to and ”130 After 

Evonik’s acquisition of the Maitland plant from Kemira in 2011, Evonik successfully increased 

prices to customers between and , noting that there was 

”131 A profitability study of that increase shows that Evonik 

 which led to 132

As the court in Tronox recently observed, the two largest suppliers “would often be able 

to maintain price discipline and control supply in a post-merger market simply by competing less 

vigorously against each other for major accounts.” Tronox, 332 F. Supp. 3d at 210. So too here, 

where each of the remaining major H2O2 producers acknowledge the benefits of the Acquisition 

on pricing and admit to desiring to raise H2O2 prices. Further, coordination is easier, “through 

implicit understanding and sheer market power, in a market where producers have already shown 

an awareness that implicit coordination would be beneficial.” Id. at 209. After the Acquisition, 

126 PX2331-027. 

127 PX2331-022. 

128 PX2484-002. 

129 PX1277-018. 

130 PX1488-046. 

131 PX1277-017. 

132 PX1277-018. 

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the combined firm and Solvay would be similarly incentivized to compete less vigorously, 

. Indeed, a consultant for 

Solvay concluded that the Acquisition 

”133 Similarly, Arkema executives observed that the Acquisition 

”134 and 

”135 Further, Arkema would not be able to defeat such a strategy – even if it wanted to – 

because the Acquisition 

136 Nouryon, on the other hand, 

.

137 Indeed, post-Acquisition, of H2O2 sales in the Southern 

and Central United States would be concentrated among the three largest producers (Evonik, 

), and Evonik alone would control nearly of the H2O2 sales in that 

region.138

b. The Proposed Acquisition Would Eliminate Significant and Beneficial 

Price Competition Between the Defendants

While the market operates as an oligopoly, that does not mean that there is no 

competition between H2O2 producers. Indeed, customers benefit from price competition 

between Evonik and PeroxyChem in both the Southern and Central United States, as well as the 

Pacific Northwest, and it is that competition that the FTC aims to protect.139

In the Southern and Central United States, customers have pitted one Defendant against 

the other in competitive RFPs and contract negotiations. Faced with these scenarios, Evonik and 

133 PX3037-040, 042; see also PX9007-007.

134 PX3000-001. 

135 PX3020-001. 

136 PX3000-001. 

137 See, e.g.,;;.

138 PX7100 ¶ 111, Ex. 2-1; see also PX1473-016. 

139 See generally PX7100 ¶¶ 183-251.

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Here, Defendants will be unable to “affirmatively show[] why [the Acquisition] is 

unlikely to substantially lessen competition, or . . . discredit[] the data underlying the initial 

presumption in the [FTC’s] favor” in order to rebut the presumption of illegality. Staples II, 190 

F. Supp. 3d at 115-16. New entry is challenging, and new competitors will face significant 

hurdles to build an H2O2 production plant. Further, there has been minimal expansion among 

current competitors in the last two decades. Defendants’ purported efficiencies are not 

substantiated, are unlikely to be passed on to consumers, and will otherwise fall far short of 

offsetting the Acquisition’s competitive harm. Finally, the proposed partial divestiture does not 

address at all the likely harm to competition in the South and Central United States, and serious 

questions remain as to whether it addresses the harm in the Pacific Northwest. 

1. Entry and Expansion Will Not Be Timely, Likely, and Sufficient to Replace 

the Competition Eliminated by the Acquisition 

Defendants bear the burden of producing evidence sufficient to show that “entry into the 

market[s] would likely avert [the proposed acquisition’s] anticompetitive effects.” Baker

Hughes, 908 F.2d at 989. Entry must be “timely, likely, and sufficient in its magnitude, 

character, and scope to deter or counteract the competitive effects of concern.” H&R Block, 833 

F. Supp. 2d at 73 (quoting Merger Guidelines § 9); see also CCC Holdings, 605 F. Supp. 2d at 

47. A finding of high entry barriers “eliminates the possibility that the reduced competition 

caused by the merger will be ameliorated by new competition from outsiders and further 

strengthens the FTC’s case.” Heinz, 246 F.3d at 717. 

Neither new entry nor expansion by existing suppliers will be timely, likely, and 

sufficient to replace the loss of competition from this Acquisition. New suppliers cannot achieve 

sufficient size and scale in the near term to provide a meaningful alternative to a postCase 1:19-cv-02337-TJK Document 45-1 Filed 10/08/19 Page 37 of 46
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Defendants have presented the FTC with claimed efficiencies totaling approximately 

 million per year, including purported supply-chain, production, and administrative 

efficiencies of million, offset by approximately million in “dis-synergies.”177

However, Defendants’ substantiation for these efficiencies is opaque at best, and the FTC is 

unable to verify the likelihood, magnitude, timeframe for achieving, or merger-specificity of any 

claimed efficiency.178 Defendants offer “mere speculation and promises about post-merger 

behavior” without any substantiated proof. See Heinz, 246 F.3d at 721. 

Defendants’ efficiencies defense also suffers from additional flaws. For example, 

Defendants suggest that the Acquisition will reduce costs in production, sourcing, and supply 

chain, but PeroxyChem has projected that it could reduce a portion of these costs on its own.179

See H&R Block, 833 F. Supp. 2d at 91 (efficiencies not credited when merging parties could 

obtain the efficiencies on their own and without the proposed acquisition). Further, Defendants’ 

efficiencies defense fails because they have not established that the claimed savings would 

benefit customers.180 See Saint Alphonsus Med. Ctr. – Nampa Inc. v. St. Luke’s Health Sys., Ltd.,

778 F.3d 775, 789-92 (9th Cir. 2015); FTC v. University Health, 938 F.2d 1206, 1223 (11th Cir. 

1991); CCC Holdings, 605 F. Supp. 2d at 74. Finally, some of the claimed efficiencies are outof-market efficiencies, relating to products and production outside the relevant markets.181 See

Merger Guidelines § 10 n.14; see also Anthem, 855 F.3d at 363-64 (rejecting savings claims that, 

among other “analytic flaws,” were “unmoored from the actual market at issue”). 

177 PX1148-011. 

178 See generally PX7100 ¶¶ 284-327. 

179 PX7100 ¶ 278; see e.g., PX6004 at 38-41. 180 See, e.g., PX6003 at 146-47. 

181 PX7100 ¶¶ 279, 297, 304, 329. 

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Further, even if Defendants’ unsubstantiated efficiencies were taken at face value, Dr. 

Rothman estimates that the elimination of head-to-head competition would result in harm 

outweighing Defendants’ claimed cost savings.182 Thus, Defendants’ efficiencies defense does 

not—and cannot—rescue this unlawful Acquisition. 

3. Defendants’ Proposed Divestiture Does Not Resolve Competitive Concerns

Defendants bear the burdens of production and persuasion as to whether their proposed 

divestiture will remedy the anticompetitive effects of the Acquisition. See generally United 

States v. Aetna Inc., 240 F. Supp. 3d 1, 60 (D.D.C. 2017); Ford Motor Co. v. United States, 405 

U.S. 562, 573 (1972); Sysco, 113 F. Supp. 3d at 72. Further, the Sixth Circuit has held that 

defendants have the burden of demonstrating that the government’s claim against the original 

agreement was moot. United States v. Dairy Farmers of America, Inc., 426 F.3d 850, 857 (6th 

Cir. 2005). When, as here, the FTC has issued an administrative complaint, the questions of 

ultimate liability, and consequently remedy, are for the Commission to decide in the first 

instance and then the Court of Appeals. See FTC v. Food Town Stores, Inc., 539 F.2d 1339, 

1342-43 (4th Cir. 1976); accord Heinz, 246 F.3d at 714. Thus, the Court should not even 

consider Defendants’ (inadequate) proposal to divest the Prince George plant. In similar 

circumstances, courts have bifurcated consideration of liability and remedy. See Attachment 3, 

Scheduling and Case Management Order at 1, United States v. Quad/Graphics, Inc., No. 1:19-

cv-04153 (N.D. Ill. Jul. 10, 2019) (requiring a separate scheduling and case management order 

regarding any proposed remedy). And here, as the remedy determination should be made by the 

Commission, the appropriate course is to defer the issue to the administrative proceeding. 

182 PX7100 ¶ 330. 

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Addressing the adequacy of the proposed divestiture in the administrative proceeding is 

especially warranted in this case, where significant questions remain about the sufficiency of the 

remedy. Defendants identified the proposed acquirer of Prince George (United Initiators) only 

after the FTC filed its Complaint, and discovery to date has not allowed the FTC to determine 

whether United Initiators conducted adequate due diligence, understands how to run the divested 

business, has a business plan that demonstrates it will compete effectively for H2O2 customers, 

and has an adequate management and sales team in place. A fulsome examination will be 

required to address these issues beyond the normal scope of a preliminary injunction hearing. 

Even if the Court were inclined to consider the proposed divestiture, the minimal 

discovery to date suggests that the divestiture buyer is is wholly inadequate. “In order to be 

accepted, curative divestitures must be made to . . . a willing, independent competitor capable of 

effective production.” Sysco, 113 F. Supp. 3d at 77 (quoting CCC Holdings, 605 F. Supp. 2d at 

59). First, customers of H2O2 value “security of supply,”183 but United Initiators, with only one 

H2O2 plant in North America, will not be able to provide the same level of security of supply as 

Evonik, PeroxyChem, or Arkema, who all operate multiple plants. Second, United Initiators’ 

only present experience with H2O2 arises out of its purchase—in July 2019—of an H2O2 plant 

in Turkey. Third, United Initiators’ purchase price for the Prince George plant is extremely low 

relative to the plant’s revenues and operating profits, as United Initiators has agreed to pay only 

 million for a plant that generated million in EBITDA in 2017. Such a “low purchase 

price raises concerns about whether [the proposed buyer] can be a successful competitor” and 

“reveals divergent interest between the divestiture purchaser and the consumer.” Aetna, 240 F. 

Supp. 3d at 72. In fact, after evaluated acquiring this plant in the divestiture, it came up 

183 See, e.g., ; ; ; .

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with a proposed price of million, taking into account a number of risks.184 Put simply, the 

purchase price is so low that United Initiators can fail as a competitor and still profit from its 

purchase of Prince George. In sum, serious questions remain as to the ability of United Initiators 

to replicate the competitive constraint that PeroxyChem currently provides in the Pacific 

Northwest.

II. THE EQUITIES HEAVILY FAVOR A PRELIMINARY INJUNCTION 

Upon finding a “likelihood of success on the merits,” the Court must then “weigh the 

equities” to determine whether injunctive relief is in the public interest. Heinz, 246 F.3d at 726-

27. “The principal public equity weighing in favor of issuance of preliminary injunctive relief is 

the public interest in effective enforcement of the antitrust laws.” Id. at 726. A second public 

interest lies in “ensuring that the FTC has the ability to order effective relief if it succeeds at the 

merits trial.” Wilhelmsen, 341 F. Supp. 3d at 73 (quoting Sysco, 113 F. Supp. 3d at 86). Without 

a preliminary injunction, Defendants can “scramble the eggs”—that is, merge their operations 

and make it extremely difficult, if not impossible, for competition to be restored to its previous 

state if the Acquisition is subsequently found to be illegal. See FTC v. Weyerhaeuser Co., 665 

F.2d 1072, 1085-86 n.31 (D.C. Cir. 1981). Without a preliminary injunction, Defendants can 

share competitively sensitive information, raise prices, eliminate services, reduce staff, and close 

facilities. Any harm that customers suffer in the interim likely would be irreversible. 

Defendants cannot offer any equities that override the strong public equities favoring 

preliminary relief. Indeed, no court has ever denied relief in a Section 13(b) proceeding in which 

the FTC “has demonstrated a likelihood of success on the merits.” FTC v. ProMedica Health 

Sys., Inc., No. 3:11-cv-47, 2011 WL 1219281, at *60 (N.D. Ohio Mar. 29, 2011); see also FTC 

184 

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v. PPG Industries, 798 F.2d 1500, 1508 (D.C. Cir. 1986) (establishment of a likelihood of 

success “weighs heavily in favor of a preliminary injunction”) (quoting Weyerhaeuser Co., 665 

F.2d at 1085). In weighing the equities, public equities are “paramount,” ProMedica, 2011 WL 

1219281, at *60, and “only ‘public equities’ that benefit consumers” can overcome the FTC’s 

showing of likely success on the merits. CCC Holdings, 605 F. Supp. 2d at 75-76 (citing FTC v. 

Whole Foods Mkt., Inc., 548 F.3d 1028, 1041 (D.C. Cir. 2008) (Brown, J.)). Private equities are 

“subordinate to public interests,” Illinois Cereal Mills, 691 F. Supp. at 1146 (citing 

Weyerhaeuser, 665 F.2d at 1083), and any private harm that Defendants can claim, such as a 

delay in consummating the Acquisition, is outweighed by the strong public interest in allowing 

the FTC an opportunity to grant full and effective relief if the FTC determines the relief is 

warranted after a full examination of the merits. Accordingly, to protect interim competition and 

preserve the FTC’s ultimate ability to order effective relief, the equities call for a preliminary 

injunction.

CONCLUSION 

For the reasons identified above, the FTC respectfully requests that the court grant a 

preliminary injunction to prevent the consummation of this illegal merger, pending a review on 

the merits in an FTC administrative proceeding. 

Case 1:19-cv-02337-TJK Document 45-1 Filed 10/08/19 Page 44 of 46
Dated: October 2, 2019 Respectfully Submitted, 

/s/ James Rhilinger 

James Rhilinger 

Amy Dobrzynski 

Daniel Matheson

James Weingarten 

Federal Trade Commission 

Bureau of Competition 

400 Seventh Street, S.W. 

Washington, DC 20024 

Telephone: (202) 326-2871 

Facsimile: (202) 326-2286 

Email: jrhilinger@ftc.gov 

Counsel for Plaintiff Federal Trade 

Commission

Case 1:19-cv-02337-TJK Document 45-1 Filed 10/08/19 Page 45 of 46
CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that on the 2nd day of October, 2019, I served the foregoing on the 

following counsel via electronic mail: 

Eric Mahr 

Andrew Ewalt 

Freshfields Bruckhaus Deringer US LLP 

700 13th Street, NW, 10th Floor 

Washington, DC 20005-3960

Tel: (202) 777-4545 

Email: eric.mahr@freshfields.com 

Counsel for Defendants RAG-Stiftung, Evonik 

Industries AG, Evonik Corporation, and 

Evonik International Holding B.V. 

Mike Cowie 

James Fishkin 

Dechert LLP 

1900 K St, NW 

Washington, DC 20006 

Tel: (202) 261-3339 

Email: mike.cowie@dechert.com 

Counsel for Defendants One Equity Partners 

Secondary Fund, L.P., One Equity Partners V, 

L.P., Lexington Capital Partners VII (AIV I), 

L.P., PeroxyChem Holding Company LLC, 

PeroxyChem Holdings, L.P., PeroxyChem 

Holdings LLC, PeroxyChem LLC, and 

PeroxyChem Cooperatief U.A.

 /s/ Amy E. Dobrzynski 

 Amy E. Dobrzynski

Attorney for Plaintiff Federal Trade Commission 

Case 1:19-cv-02337-TJK Document 45-1 Filed 10/08/19 Page 46 of 46