9910306

UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS: Robert Pitofsky, Chairman

Sheila F. Anthony

Mozelle W. Thompson

Orson Swindle

Thomas B. Leary

 In the Matter of

RECKITT & COLMAN plc,

 a corporation.

DOCKET NO. C-3918

DECISION AND ORDER

The Federal Trade Commission having initiated an investigation of the proposed

acquisition by Reckitt & Colman of 100 percent of the voting securities of Benckiser NV, and

Respondent having been furnished thereafter with a copy of a draft of Complaint that the Bureau

of Competition presented to the Commission for its consideration and which, if issued by the

Commission, would charge Respondent with violations 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

Respondent, its attorneys, and counsel for the Commission having thereafter executed an

Agreement Containing Consent Order (“Consent Agreement”), containing an admission by

Respondent of all the jurisdictional facts set forth in the aforesaid draft of Complaint, a statement

that the signing of said Consent Agreement is for settlement purposes only and does not

constitute an admission by Respondent that the law has been violated as alleged in such

Complaint, or that the facts as alleged in such Complaint, other than jurisdictional facts, are true,

and waivers and other provisions as required by the Commission’s Rules; and 

The Commission having thereafter considered the matter and having determined that it

had reason to believe that the Respondent has violated the said Acts, and that a Complaint should

issue stating its charges in that respect, and having accepted the executed Consent Agreement

and placed such Consent Agreement on the public record for a period of thirty (30) days for the

receipt and consideration of public comments, now in further conformity with the procedure

described in Commission Rule 2.34, 16 C.F.R. § 2.34, the Commission hereby issues its

Complaint, makes the following jurisdictional findings, and issues the following Order:
Decision and Order Page 2

1. Respondent Reckitt & Colman plc is a public limited company organized, existing and

doing business under and by virtue of the laws of England, with its office and principal place of

business at 67 Alma Road, Windsor, Berkshire SL4 3HD, United Kingdom.

2. The Federal Trade Commission has jurisdiction of the subject matter of this

proceeding and of the Respondent, and the proceeding is in the public interest.

ORDER

I.

IT IS ORDERED that, as used in this Order, the following definitions shall apply:

A. "Respondent" or "Reckitt & Colman" means Reckitt & Colman plc, its directors, officers,

employees, agents, representatives, predecessors, successors, and assigns; its subsidiaries,

divisions, groups, and affiliates controlled by Reckitt & Colman plc, and the respective

directors, officers, employees, agents, representatives, successors, and assigns of each.

B. "Vermögensverwaltung” means NRV Vermögensverwaltung, a corporation organized,

existing, and doing business under and by virtue of the laws of Germany, with its office

and principal place of business located at Ludwig-Bertram Strasse 8+10, 67059

Ludwigshafen, Germany.

C. “Benckiser” means Benckiser N.V., a subsidiary controlled by Vermögensverwaltung,

which is organized, existing, and doing business under and by virtue of the laws of The

Netherlands, with its office and principal place of business located at World Trade

Center, Amsterdam Airport, Tower C, Schipholboulevard 229, 1118 BH Schiphol

Airport, The Netherlands, and includes, but is not limited to, Benckiser’s wholly-owned

subsidiary, Benckiser Consumer Products Inc., a corporation organized, existing, and

doing business under and by virtue of the laws of Delaware, with its office and principal

place of business located at Greenwich American Centre, 5 American Lane, Greenwich,

Connecticut 06831-2513. 

D. "Church & Dwight" means Church & Dwight Co., Inc., a corporation organized,

existing, and doing business under and by virtue of the laws of Delaware, with its office

and principal place of business located at 469 North Harrison Street, Princeton, New

Jersey 08543-5297.

E. "Commission" means the Federal Trade Commission.

F. "Acquisition" means the acquisition of Benckiser by Reckitt & Colman pursuant to a

Merger Agreement dated July 27, 1999.
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G. "Acquirer" means either Church & Dwight, if Respondent divests pursuant to Paragraph

II.A.1. of this Order, or such other entity to whom Respondent divests the Divested

Assets pursuant to any other provision of this Order.

H. "Hard Surface Bathroom Cleaners" means products specially formulated, marketed, and

used by consumers to remove built-up soils and stains from bathroom surfaces. 

I. "Fine Fabric Wash Products" means products specially formulated, marketed, and used by

consumers to safely clean fine fabrics such as silks, woolens or other delicate fabrics. 

J. "Divested Assets" means all of Respondent’s rights, title, and interest, acquired from

Vermögensverwaltung pursuant to the Acquisition, in assets and businesses relating to the

research, development, manufacture, sale, and distribution of Hard Surface Bathroom

Cleaners and Fine Fabric Wash Products (collectively the “Divested Products”),

including, without limitation, the following:

1. the trade dress, brand and trademark, “Scrub Free,” and associated goodwill;

2. the trade dress, brand and trademark, “Delicare,”and associated goodwill;

3. all inventory, customer lists, vendor lists, supplier contact lists, price lists,

catalogs, sales and promotion plans, materials and literature, advertising materials,

cost and pricing information, marketing plans, information and materials, product

development information, research materials, technical information, claims

support, product liability claim files, business plans (including, but not limited to,

actual plans currently in force for the top 20 accounts), trade secrets, technology,

technical know-how, formulae, manufacturing processes, recipes, blue prints,

research records, specifications, packaging designs (including product labels),

artwork, drawings, and process and quality control data;

4. intellectual property rights (including, but not limited to, an assignment of all

rights under a Patent and Know-How License Agreement (July 1, 1987) between

Ecolab, Inc., and Joh. A. Benckiser GmbH, and the First Amendment to the Patent

and Know-How Agreement (November 4, 1999) between Benckiser N.V. and

Ecolab, Inc.), copyrights, trademarks, trade dress, trade names, and Universal

Product Code Product Identifier Codes (but excluding Universal Product Code

Company Identifier Codes);

5. all rights, title and interest in and to the contracts entered into in the ordinary

course of business with customers, retailers of Divested Products (including, but

not limited to, letters of confirmation of trade promotions and slotting letters),

suppliers, sales representatives, brokers, licensees, or any other person;
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6. all rights under warranties and guarantees, express or implied;

7. all books, records, files, and supporting documents; and,

8. all Environmental Protection Agency applications, registrations, permits, and the

like, and all documents related thereto.

K. "Divestiture Agreement" means each and all of the following:

1. the agreement for the sale of the Divested Assets to Church & Dwight dated

October 12, 1999, as amended by the First Amendment to the Asset Purchase

Agreement (November 5, 1999);

2. the Trademark Purchase Agreement between Benckiser and Church & Dwight

dated October 12, 1999; 

3. the Transitional Services Agreement between Benckiser and Church & Dwight

dated October 21, 1999; and,

4. the Assignment and Assumption Agreement between Benckiser and Church &

Dwight.

L. "New Divestiture Agreement" means all agreements for the sale of the Divested Assets

other than the Divestiture Agreement, and includes any divestiture agreements entered

into by a trustee pursuant to Paragraph III of this Order.

M. "Cost" means direct cash cost of raw materials, packaging and labor.

N. "Non-Public Acquirer Information" means any information not in the public domain

obtained by Respondent directly or indirectly from the Acquirer in the course of 

negotiation or performance of the Divestiture Agreement or the New Divestiture

Agreement. Non-Public Acquirer Information shall not include information that falls

within the public domain through no violation of this Order by Respondent. 
Decision and Order Page 5

II.

IT IS FURTHER ORDERED that:

A. 1. Respondent shall divest, absolutely and in good faith, the Divested Assets to

Church & Dwight pursuant to the Divestiture Agreement (which agreement shall

not be read to vary or contradict the terms of this Order), subsequently to the date

upon which the Commission accepts the Consent Agreement for public comment,

but on or before the date that Respondent consummates the Acquisition. 

2. Provided, however, that if Respondent divests pursuant to Paragraph II.A.1.,

Respondent need divest only (a) such Divested Assets that are identified in

Paragraph I.J.1. through I.J.8., and (b) such assets that are included in the

Divestiture Agreement. 

B. Provided, however, that if the Commission determines to make the Order final, but

notifies the Respondent either that Church & Dwight is not an acceptable acquirer, or that

the Divestiture Agreement is not an acceptable manner of divestiture, then Respondent

shall rescind the Divestiture Agreement and rescind any divestiture to Church & Dwight,

and Respondent shall divest the Divested Assets, absolutely and in good faith, and at no

minimum price, pursuant to a New Divestiture Agreement within ninety (90) days of the

date the Order becomes final to an Acquirer or Acquirers that receive the prior approval

of the Commission and in a manner that receives the prior approval of the Commission.

C. Any New Divestiture Agreement shall require Respondent to:

1. Indemnify, defend and hold the Acquirer harmless from any and all suits, claims,

actions, demands, liabilities, expenses or losses arising from any manufacture or

sale of the Hard Surface Bathroom Cleaners and/or Fine Fabric Wash Products

supplied to the Acquirer by Respondent pursuant to the New Divestiture

Agreement; provided, however, that the obligations of this Paragraph II.C.1. may

be contingent upon the Acquirer’s giving Respondent prompt, adequate notice of

such claim, cooperating fully in the defense of such claim, and permitting

Respondent to assume the sole control of all phases of the defense and/or

settlement of such claim, including the selection of counsel; and provided further

that the obligations of this Paragraph II.C.1. may not require Respondent to be

liable for any negligent act or omission of the Acquirer or for any representations

and warranties, express or implied, made by the Acquirer that exceed the

representations and warranties made by Respondent to the Acquirer;

2. Make available to the Acquirer, upon reasonable notice and request by the

Acquirer, for a period not to exceed eighteen (18) months from the date
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Respondent begins delivery of products pursuant the New Divestiture Agreement,

all records kept in the normal course of business that relate to the Cost of

manufacturing or supplying the Hard Surface Bathroom Cleaners and Fine Fabric

Wash Products;

3. Make available to the Acquirer, upon reasonable notice and request by the

Acquirer, for a period not to exceed eighteen (18) months from the date

Respondent first provides assistance, personnel, or training to the Acquirer

pursuant to the New Divestiture Agreement, all records kept in the normal course

of business that relate to the Cost of providing such assistance, personnel, or

training to the Acquirer.

D. If Respondent or a trustee divests pursuant to Paragraph II.B. or Paragraph III. of this

Order, Respondent shall, at the option of the Acquirer, enter into a contract: 

1. To supply and deliver to the Acquirer in a timely manner and under reasonable

terms and conditions, up to a twelve (12) month supply of any and all of the Hard

Surface Bathroom Cleaners and Fine Fabric Wash Products at Cost, in such

quantities as the Acquirer may request up to 110% of Benckiser’s 1999 or 2000

production forecast, whichever is greater;

2. To assign or otherwise convey to the Acquirer all of Respondent’s right, title, and

interest in any contract with any person relating to research, development,

manufacture, marketing, sale, brokerage, or distribution of Hard Surface

Bathroom Cleaners and/or Fine Fabric Wash Products; provided that if such

assignment or conveyance may not be made or be made effective without the

consent of any person, Respondent shall use its best efforts to obtain all necessary

consents from such person and, failing such consent, shall enter into an agreement

with the Acquirer to provide to the Acquirer all the benefits flowing to

Respondent pursuant to such contract;

3. To provide to the Acquirer, at Cost, for a period not to exceed six (6) months from

the date of consummation of the New Divestiture Agreement, such assistance,

personnel and training as requested by the Acquirer (including its agents and

contractors) relating to:

(a) the research, development, manufacture, sale, and distribution of the Hard

Surface Bathroom Cleaners and/or Fine Fabric Wash Products; and

(b) any Environmental Protection Agency applications, registrations,

procedures, proceedings, or approvals related to the research,

development, manufacture, sale and distribution of Hard Surface

Bathroom Cleaners and Fine Fabric Wash Products in the United States;
Decision and Order Page 7

4. To sell any capital equipment, fixtures, machines, buildings, structures, vehicles,

real property, or other tangible assets (other than books and records) used in the

research, development, manufacture, sale, or distribution of the Divested

Products;

provided, however, that with respect to the assets that are to be divested and the contracts

that are to be entered into pursuant to this Paragraph II.D. at the option of the Acquirer or

Acquirers, Respondent need not divest such assets or enter into such contracts only if the

Acquirer or Acquirers choose not to acquire such assets or enter such contracts and the

Commission approves the divestiture without such assets or contracts.

E. Respondent shall comply with the terms of the Divestiture Agreement (if Respondent

divests pursuant to Paragraph II.A. of this Order) or the New Divestiture Agreement (if

Respondent, or a trustee, divests pursuant to Paragraph II.B. or Paragraph III. of this

Order), which terms are incorporated by reference into this Order, and made a part hereof. 

Any failure by Respondent to comply with the Divestiture Agreement or the New

Divestiture Agreement shall constitute a failure to comply with this Order.

F. The purpose of the divestiture of the Divested Assets is to ensure the continued use of the

Divested Assets in the same businesses in which the Divested Assets are engaged at the

time of the Acquisition, and to remedy any lessening of competition resulting from the

Acquisition as alleged in the Commission’s Complaint.

G. Respondent shall not provide, disclose or otherwise make available to any of its

employees any Non-Public Acquirer Information, nor shall Respondent use any NonPublic Acquirer Information obtained or derived by Respondent in connection with the

negotiation or performance of either the Divestiture Agreement or New Divestiture

Agreement; provided, however, that Respondent may provide, disclose, or otherwise

make available Non-Public Acquirer Information to its employees whose duties include

negotiating, or performing Respondent’s obligations under, the Divestiture Agreement or

New Divestiture Agreement, and Respondent may use Non-Public Acquirer Information

in connection with negotiating or performing the Divestiture Agreement or New

Divestiture Agreement.

H. Pending divestiture of the Divested Assets, Respondent shall take such actions as are

necessary to maintain the viability, marketability and competitiveness of the Divested

Assets, and to prevent the destruction, removal, wasting, deterioration, or impairment of

any of the Divested Assets.

III.
Decision and Order Page 8

IT IS FURTHER ORDERED that:

A. If Respondent fails to divest absolutely and in good faith the Divested Assets pursuant to

Paragraph II. of this Order, the Commission may appoint a trustee to divest the Divested

Assets. In the event that the Commission or the Attorney General brings an action

pursuant to § 5(l) of the Federal Trade Commission Act, 15 U.S.C. § 45(l), or any other

statute enforced by the Commission, Respondent shall consent to the appointment of a

trustee in such action. Neither the appointment of a trustee nor a decision not to appoint a

trustee under this Paragraph shall preclude the Commission or the Attorney General from

seeking civil penalties or any other relief available to it, including a court-appointed

trustee pursuant to § 5(l) of the Federal Trade Commission Act, or any other statute

enforced by the Commission, for any failure by Respondent to comply with this Order. 

B. If a trustee is appointed by the Commission or a court pursuant to Paragraph III.A. of this

Order, Respondent shall consent to the following terms and conditions regarding the

trustee's powers, duties, authority, and responsibilities:

1. The Commission shall select the trustee, subject to the consent of Respondent,

which consent shall not be unreasonably withheld. The trustee shall be a person

with experience and expertise in acquisitions and divestitures. If Respondent has

not opposed, in writing, including the reasons for opposing, the selection of any

proposed trustee within ten (10) days after notice by the staff of the Commission

to Respondent of the identity of any proposed trustee, Respondent shall be

deemed to have consented to the selection of the proposed trustee.

2. Subject to the prior approval of the Commission, the trustee shall have the

exclusive power and authority to accomplish the divestiture described in

Paragraph III.A. of the Order.

3. Within ten (10) days after appointment of the trustee, Respondent shall execute a

trust agreement that, subject to the prior approval of the Commission, and in the

case of a court-appointed trustee, of the court, transfers to the trustee all rights and

powers necessary to permit the trustee to effect the divestiture required by this

Order and to execute a New Divestiture Agreement on behalf of Respondent.

4. The trustee shall have twelve (12) months from the date the Commission approves

the trust agreement described in Paragraph III.B.3. to accomplish the divestiture,

which shall be to an Acquirer or Acquirers who receive the prior approval of the

Commission, and in a manner and pursuant to a New Divestiture Agreement that

receive the prior approval of the Commission. If, however, at the end of the

twelve-month period, the trustee has submitted a plan for divestiture, or believes

that the divestiture required by this Order can be achieved within a reasonable

time, then the divestiture period may be extended by the Commission, or, in the
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case of a court-appointed trustee, by the court; provided, however, the

Commission may extend the trustee’s period for divestiture only two (2) times.

5. The trustee shall have full and complete access to the personnel, books, records

and facilities related to the Divested Assets or to any other relevant information,

as the trustee may request. Respondent shall develop such financial or other

information as the trustee may request and shall cooperate with the trustee. 

Respondent shall take no action to interfere with or impede the trustee’s

accomplishment of the divestiture. Any delays in any divestiture caused by

Respondent shall extend the time for that divestiture under this Paragraph in an

amount equal to the delay, as determined by the Commission or, for a courtappointed trustee, by the court.

6. The trustee shall use his or her best efforts to negotiate the most favorable price

and terms available in each contract that is submitted to the Commission, subject

to Respondent’s absolute and unconditional obligation to divest expeditiously at

no minimum price. The divestiture shall be made in a manner consistent with the

terms of this Order; provided, however, if the trustee receives bona fide offers

from more than one acquiring entity, and if the Commission determines to

approve more than one such acquiring entity, the trustee shall divest to the

acquiring entity or entities selected by Respondent from among those approved by

the Commission; provided further, however, that Respondent shall select such

entity within five (5) days of receiving notification of the Commission’s approval.

7. The trustee shall serve, without bond or other security, at the cost and expense of

Respondent, on such reasonable and customary terms and conditions as the

Commission or a court may set. The trustee shall have the authority to employ, at

the cost and expense of Respondent, and at reasonable fees, such consultants,

accountants, attorneys, investment bankers, business brokers, appraisers, and other

representatives and assistants as are necessary to carry out the trustee’s duties and

responsibilities. The trustee shall account for all monies derived from the

divestiture and all expenses incurred. After approval by the Commission and, in

the case of a court-appointed trustee, by the court, of the account of the trustee,

including fees for his or her services, all remaining monies shall be paid at the

direction of the Respondent, and the trustee’s power shall be terminated. The

trustee’s compensation shall be based at least in significant part on a commission

arrangement contingent on the trustee’s accomplishing the divestiture required by

Paragraph III.A. of this Order.

8. Respondent shall indemnify the trustee and hold the trustee harmless against any

losses, claims, damages, liabilities, or expenses arising out of, or in connection

with, the performance of the trustee's duties, including all reasonable fees of

counsel and other expenses incurred in connection with the preparation for, or
Decision and Order Page 10

defense of, any claim whether or not resulting in any liability, except to the extent

that such losses, claims, damages, liabilities, or expenses result from misfeasance,

gross negligence, willful or wanton acts, or bad faith by the trustee.

9. If the trustee ceases to act or fails to act diligently, a substitute trustee shall be

appointed in the same manner as provided in this Paragraph.

10. The Commission or, in the case of a court-appointed trustee, the court, may on its

own initiative or at the request of the trustee issue such additional orders or

directions as may be reasonably necessary or appropriate to accomplish the

divestiture required by this Order.

11. The trustee may divest such additional ancillary assets related to the Divested

Assets and effect such ancillary arrangements as are necessary to satisfy the

requirements or purposes of this Order.

12. The trustee shall have no obligation or authority to operate or maintain the

Divested Assets. 

13. The trustee shall report in writing to Respondent and the Commission every sixty

(60) days concerning the trustee’s efforts to accomplish the divestiture required by

this Order.

IV.

IT IS FURTHER ORDERED that within thirty (30) days after the date this Order

becomes final, and every thirty (30) days thereafter until Respondent has completed the

divestiture of the Divested Assets and every ninety (90) days thereafter until Respondent has

fully complied with the provisions of Paragraphs II. and III. of this Order, Respondent shall

submit to the Commission verified written reports setting forth in detail the manner and form in

which it intends to comply, is complying, and has complied with the requirements of this Order. 

Respondent shall include in its compliance reports, among other things that are required from

time to time, a full description of the efforts being made to comply with Paragraphs II. and III. of

the Order, including a description of all substantive contacts or negotiations for the divestiture

and the identity of all parties contacted. Respondent shall include in its compliance reports

copies of all written communications to and from such parties, all internal documents (except

privileged documents), and all reports and recommendations, concerning the divestiture.
Decision and Order Page 11

V.

IT IS FURTHER ORDERED that Respondent shall notify the Commission at least thirty

(30) days prior to any proposed change in the corporate Respondent such as dissolution,

assignment, sale resulting in the emergence of a successor corporation, or the creation or

dissolution of subsidiaries or any other change in the corporation that may affect compliance

obligations arising out of the Order.

VI.

IT IS FURTHER ORDERED that, for the purpose of determining or securing

compliance with this Order, Respondent shall permit any duly authorized representative of the

Commission:

A. Access, during office hours and in the presence of counsel, to all facilities and

access to inspect and copy all books, ledgers, accounts, correspondence,

memoranda and other records and documents in the possession or under the control

of Respondent relating to any matters contained in this Order; and

B. Upon five (5) days' notice to Respondent and without restraint or interference from

Respondent, to interview officers, directors, or employees of Respondent, who may

have counsel present, regarding such matters.

VII.

IT IS FURTHER ORDERED that this order shall terminate five (5) years after the

divestiture required in Paragraph II.A. of this order has been accomplished.

By the Commission, Commissioner Leary recused.

Donald S. Clark

Secretary

SEAL:

ISSUED: January 18, 2000