1110207 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

COMMISSIONERS: Jon Leibowitz, Chairman 

 J. Thomas Rosch 

 Edith Ramirez 

 Julie Brill 

 ____________ 

 ) 

In the Matter of ) 

 ) 

CARPENTER TECHNOLOGY CORPORATION ) 

a corporation; ) 

 ) 

and ) Docket No. C-4349 

 ) 

LATROBE SPECIALTY METALS, INC. ) 

a corporation. ) 

 ) 

 

COMPLAINT 

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

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

Respondent Carpenter Technology Corporation (“Carpenter”), a corporation subject to the 

jurisdiction of the Commission, has agreed to acquire Respondent Latrobe Specialty Metals, Inc. 

(“Latrobe”), a corporation subject to the jurisdiction of the Commission (collectively, 

“Respondents”), in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and 

Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, and it appearing to 

the Commission that a proceeding in respect thereof would be in the public interest, hereby 

issues its Complaint, stating its charges as follows: 

I. RESPONDENTS 

1. Respondent Carpenter is a Delaware corporation, headquartered at 2 Meridian 

Boulevard, Wyomissing, Pennsylvania 19610-3202. 

2. Respondent Latrobe is a Delaware Corporation, headquartered at 2626 Ligonier 

Street, Latrobe, Pennsylvania 15650. HHEP-Latrobe, L.P., the ultimate parent entity of Latrobe 

Specialty Metals, Inc., has its headquarters at 100 Crescent Court, Suite 1200, Dallas, Texas 

75201. 
3. Respondents are corporations who are engaged in, among other activities, the 

production and sale of specialty alloys, including, but not limited to, multiphase nickel-cobalt 

alloys MP159, and MP35N used in aerospace applications (“Aerospace MP35N”). 

4. Respondents are corporations and at all times relevant herein have been, engaged in 

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

12, and are corporations whose business is in, or affects commerce, as “commerce” is defined 

under Section 4 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 44. 

II. THE PROPOSED ACQUISITION 

5. Pursuant to the June 20, 2011 Agreement and Plan of Merger (“Merger Agreement”), 

Carpenter announced its intention to purchase all of Latrobe’s approximately 8.1 million voting 

securities for approximately $410 million (“Acquisition”). 

III. THE RELEVANT MARKET

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

the Acquisition are: (1) MP159; and (2) Aerospace MP35N. 

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

effects of the Acquisition on the MP159 and Aerospace MP35N markets, respectively, is the 

United States plus foreign countries approved by the United States Congress to supply materials 

for military purposes under the Defense Federal Acquisition Regulation System (“DFARS”), as 

amended, 48 C.F.R. § 225-7012. 

8. Foreign countries approved under DFARS are: Australia, Belgium, Canada, 

Denmark, Egypt, Federal Republic of Germany, France, Greece, Israel, Italy, Luxembourg, 

Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, and the United Kingdom 

of Great Britain and Northern Ireland. Under DFARS, companies manufacturing products in 

Austria and Finland may also supply materials for military purposes, provided that they receive 

waivers exempting their sale of materials from the Buy American Act and Balance of Payments 

programs. 

IV. MARKET STRUCTURE

9. The market for MP159 is highly concentrated, as measured by the HerfindahlHirschman Index (“HHI”). The Acquisition would consolidate the only MP159 manufacturers. 

Post-Acquisition, Respondents will have 100 percent market share. The post-Acquisition HHI 

will be 10,000, with a 4,668 HHI increase. This market concentration level far exceeds the 

Horizontal Merger Guidelines thresholds, and thus, supports the presumption that the 

Acquisition will create or enhance market power. 

10. The market for Aerospace MP35N is highly concentrated, as measured by the HHI. 

The Acquisition would consolidate the only Aerospace MP35N manufacturers. PostAcquisition, Respondents will have 100 percent market share. The post-Acquisition HHI will be 
10,000, with a 4,928 HHI increase. This market concentration level far exceeds the Horizontal 

Merger Guidelines thresholds, and thus, supports the presumption that the Acquisition will create 

or enhance market power. 

V. ENTRY CONDITIONS 

11. Entry into the market for MP159 or Aerospace MP35N, respectively, would not be 

timely, likely, or sufficient to deter the likely anticompetitive effects of the Acquisition. The 

time and costs required to obtain the physical assets and expertise necessary for the manufacture 

of MP159 and Aerospace MP35N are substantial. Before supplying the alloys to customers, 

MP159 and Aerospace MP35N manufacturers must also invest significant amounts of time and 

money to receive customer and end-user qualifications. Finally, these two markets are small, 

which further deters firms from making the investments required to compete effectively in these 

markets. 

VI. EFFECTS OF THE ACQUISTITION 

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

competition, and to tend to create a monopoly, in the markets for MP159 and Aerospace MP35N, 

respectively, in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and 

Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, in the following 

ways, among others: 

 

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

Respondents Carpenter and Latrobe; and 

b. by increasing the likelihood that Respondent Carpenter would unilaterally 

exercise market power in the MP159 and Aerospace MP35N markets. 

VII. VIOLATIONS CHARGED 

13. The allegations contained in Paragraphs 1 through 12 above are hereby incorporated 

by reference as though fully set forth here. 

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

violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18. 

15. The Acquisition described in Paragraph 5, if consummated, would constitute a 

violation of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45. 

16. The Merger Agreement described in Paragraph 5 constitutes a violation of 

Section 5 of the FTC Act, as amended, 15 U.S.C. § 45. 
WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade Commission on 

this twenty-eighth day of February, 2012, issues its complaint against said Respondents. 

 By the Commission. 

 Donald S. Clark 

 Secretary 

SEAL: