Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Notices 67255

Dated: December 19, 2001.

Donald S. Clark,

Secretary.

[FR Doc. 01–31885 Filed 12–27–01; 8:45 am]

BILLING CODE 6750–01–M

FEDERAL TRADE COMMISSION

[File No. 021 0002]

INA-Holding Schaeffler KG, et al.;

Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: The consent agreement in this

matter settles alleged violations of

federal law prohibiting unfair or

deceptive acts or practices or unfair

methods of competition. The attached

Analysis to Aid Public Comment

describes both the allegations in the

draft complaint that accompanies the

consent agreement and the terms of the

consent order—embodied in the consent

agreement—that would settle these

allegations.

DATES: Comments must be received on

or before January 22, 2002.

ADDRESSES: Comments filed in paper

form should be directed to: FTC/Office

of the Secretary, Room 159–H, 600

Pennsylvania Avenue, NW.,

Washington, DC 20580. Comments filed

in electronic form should be directed to:

consentagreement@ftc.gov, as

prescribed below.

FOR FURTHER INFORMATION CONTACT: Nick

Koberstein, FTC, Bureau of

Competition, 600 Pennsylvania Avenue,

NW., Washington, DC 20580, (202) 326–

2743.

SUPPLEMENTARY INFORMATION: Pursuant

to section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46(f), and section 2.34 of the

Commission’s rules of practice, 16 CFR

2.34, notice is hereby given that the

above-captioned consent agreement

containing a consent order to cease and

desist, having been filed with and

accepted, subject to final approval, by

the Commission, has been placed on the

public record for a period of thirty (30)

days. The following Analysis to Aid

Public Comment describes the terms of

the consent agreement, and the

allegations in the complaint. An

electronic copy of the full text of the

consent agreement package can be

obtained from the FTC Home Page (for

December 21, 2001), on the World Wide

Web, at ‘‘http://www.ftc.gov/os/2001/

12/index.htm.’’ A paper copy can be

obtained from the FTC Public Reference

Room, Room 130–H, 600 Pennsylvania

Avenue, NW., Washington, DC 20580,

either in person or by calling (202) 326–

2222.

Public comments are invited, and may

be filed with the Commission in either

paper or electronic form. Comments

filed in paper form should be directed

to: FTC/Office of the Secretary, Room

159–H, 600 Pennsylvania Avenue, NW.,

Washington, DC 20580. If a comment

contains nonpublic information, it must

be filed in paper form, and the first page

of the document must be clearly labeled

‘‘confidential.’’ Comments that do not

contain any nonpublic information may

instead be filed in electronic form (in

ASCII format, WordPerfect, or Microsoft

Word) as part of or as an attachment to

email messages directed to the following

email box: consentagreement@ftc.gov.

Such comments will be considered by

the Commission and will be available

for inspection and copying at its

principal office in accordance with

section 4.9(b)(6)(ii) of the Commission’s

rules of practice, 16 CFR 4.9(b)(6)(ii)).

Analysis of Agreement Containing

Consent Orders To Aid Public Comment

The Federal Trade Commission

(‘‘Commission’’) has accepted, subject to

final approval, an Agreement

Containing Consent Orders (‘‘Consent

Agreement’’) from INA-Holding

Schaeffler KG (‘‘INA’’) and FAG

Kugelfischer Georg Scha ̈fer AG (‘‘FAG’’),

which is designed to remedy the

anticompetitive effects resulting from

INA’s acquisition of FAG. Under the

terms of the Consent Agreement, INA

and FAG will be required to divest

FAG’s cartridge ball screw support

bearing (‘‘CBSSB’’) business. FAG’s

CBSSB business will be divested to

Aktiebolaget SKF (‘‘SKF’’), and will take

place no later than twenty (20) business

days from the date on which INA begins

its acquisition of FAG.

The proposed Consent Agreement has

been placed on the public record for

thirty (30) days for receipt of comments

by interested persons. Comments

received during this period will become

part of the public record. After thirty

(30) days, the Commission will again

review the proposed Consent Agreement

and the comments received, and will

decide whether it should withdraw from

the proposed Consent Agreement or

make final the Decision and Order.

Pursuant to a cash tender offer

announced on September 13, 2001, INA

proposes to acquire all of the

outstanding shares of FAG. The total

value of the transaction is

approximately $650 million. The

Commission’s Complaint alleges that

the proposed acquisition, if

consummated, would violate 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 worldwide market for

the research, development, manufacture

and sale of CBSSBs.

FAG and INA are the only two

suppliers of CBSSBs in the world.

CBSSBs are critical components in

many industrial machine tools, and are

utilized by machine tool original

equipment manufacturers (‘‘OEMs’’)

around the world. Machine tools are

machines that are used in the

production of other equipment, and

include grinding machines, milling

machines, and laser drilling and cutting

systems. Machine tool OEMs utilize

CBSSBs to reduce the friction associated

with the rotation of a rolling screw. This

rotation is used to control linear motion

for accurate positioning, and is vital to

the proper functioning of certain

machine tools. Although other types of

bearings can be used to accomplish this

purpose, CBSSBs are easier, less

expensive, and less time intensive to

use than the potential alternatives.

CBSSBs also allow end users of machine

tools to replace the bearings easily,

quickly and without incurring

substantial cost. Moreover, once a

machine tool is designed with CBSSBs,

the process of switching to an

alternative type of bearing would

require a costly and time consuming

redesign of the tool. For these reasons,

it is highly unlikely that OEMs, or end

users, would switch from CBSSBs to

alternative technologies even if CBSSB

prices increased significantly.

The global market for CBSSBs is

highly concentrated. If the proposed

acquisition is consummated, the

combined firm would monopolize the

worldwide market for CBSSBs. Prior to

the acquisition, INA and FAG frequently

competed against each other for CBSSB

business, and this competition

benefitted CBSSB customers. By

eliminating competition between the

two competitors in this highly

concentrated market, the proposed

acquisition would allow the combined

firm to exercise market power

unilaterally, thereby increasing the

likelihood that purchasers of CBSSBs

would be forced to pay higher prices

and that innovation, service levels, and

product quality in this market would

decrease.

There are significant impediments to

new entry into the CBSSB market. A

new entrant into the CBSSB market

would need to undertake the difficult,

expensive and time-consuming process

of researching and developing a line of

CBSSB products, acquiring the

necessary production assets, and

developing the expertise needed to

67256 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Notices

successfully design, manufacture, and

market these products. It would take a

new entrant over two years to

accomplish these steps and achieve a

significant market impact. Additionally,

new entry into the CBSSB market is

unlikely to occur because the costs of

entering the market and producing

CBSSBs are high relative to the limited

sales opportunities available to new

entrants.

The Consent Agreement effectively

remedies the acquisition’s

anticompetitive effects in the worldwide

market for CBSSBs by requiring INA

and FAG to divest FAG’s CBSSB

business. This business consists of,

among other things, FAG’s specialized

tooling equipment, technical drawings,

advertising and training materials,

customer lists, and other assets used in

the research, development,

manufacturing, quality assurance,

marketing, customer support and sale of

CBSSBs (collectively ‘‘CBSSB Assets’’).

Pursuant to the Consent Agreement,

INA and FAG are required to divest the

CBSSB Assets to SKF within twenty (20)

business days from the date on which

INA begins its acquisition of FAG. If the

Commission determines that SKF is not

an acceptable buyer or that the manner

of the divestiture is not acceptable, INA

and FAG must rescind the sale to SKF

within three (3) business days, and

divest the CBSSB Assets to a

Commission-approved buyer within

three (3) months. If INA and FAG have

not divested the CBSSB Assets within

the time and in the manner required by

the Consent Agreement, the

Commission may appoint a trustee to

divest these assets and any additional

FAG machinery that the trustee deems

appropriate, subject to Commission

approval.

The Commission’s goal in evaluating

possible purchasers of divested assets is

to maintain the competitive

environment that existed prior to the

acquisition. A proposed buyer of

divested assets must not itself present

competitive problems. The Commission

is satisfied that SKF is a well-qualified

acquirer of the divested assets. SKF is a

publicly-traded Swedish corporation

and the largest supplier of ball and

roller bearings worldwide. SKF has been

active in the bearings industry since

1907, and currently has production sites

in 22 countries around the world and

sales activities in almost every country

in the world. SKF is also a current

producer of ball screw support bearings,

the product from which CBSSBs were

originally derived. Thus, SKF has the

necessary industry expertise to

manufacture and sell CBSSBs, and its

entry into the CBSSB market will

effectively replace the competition

being eliminated by INA’s acquisition of

FAG. Furthermore, SKF does not pose

separate competitive issues as the

acquirer of the divested assets.

The Consent Agreement includes a

number of provisions that are designed

to ensure that the divestiture of the

CBSSB Assets is successful. The

Consent Agreement requires that, for a

period of six (6) months, INA and FAG

provide SKF with personnel, assistance,

and training at no cost to SKF. This

provision will ensure that SKF is able to

effectively manufacture and market

CBSSBs of the same quality as those

currently produced by FAG.

Additionally, if requested by SKF, INA

and FAG are required to provide

transitional manufacturing services at

variable cost to SKF for up to six (6)

months. This will ensure that SKF is

able to serve customers in the CBSSB

market without delay. In order to further

facilitate SKF’s entry into the CBSSB

market, the Consent Agreement also

prohibits INA and FAG from using any

catalog numbers currently used by FAG

to identify its CBSSBs.

To preserve the competitive viability

and independence of the CBSSB Assets

pending divestiture, the Consent

Agreement includes an Order to

Maintain Assets. This Order contains a

number of provisions designed to

ensure that the viability,

competitiveness, and marketability of

the CBSSB Assets and other FAG

machinery are not diminished. The

Order to Maintain Assets also provides

that the Commission may appoint one

or more monitors to ensure that INA and

FAG expeditiously comply with their

obligations under the Consent

Agreement.

In order to ensure that the

Commission remains informed about

the status of the pending divestiture,

and about efforts being made to

accomplish the divestiture, the Consent

Agreement requires INA and FAG to file

an initial status report with the

Commission within ten (10) days of the

date the Consent Agreement is executed,

and additional reports every thirty (30)

days thereafter until the Commission’s

Decision and Order becomes final. Once

the Commission’s Order becomes final,

INA and FAG have sixty (60) days

within which to submit a verified

written report detailing the manner in

which they have complied, or intend to

comply, with the Commission’s Order.

This reporting requirement continues

until INA and FAG have fully complied

with the Commission’s Order.

In addition to the divestiture outlined

above, the Commission’s Order also

addresses potential competitive issues

raised by a possible future joint venture

between FAG and NTN Corporation of

Japan (‘‘NTN’’), another large producer

of bearings worldwide. Although no

joint activities have taken place to date,

a preliminary agreement between FAG

and NTN indicates that a wide range of

possible joint marketing, joint

production and joint sales activities are

contemplated by the joint venture

between the two companies. INA has

publicly asserted that it welcomes the

alliance with NTN and is prepared to

continue this cooperation with NTN

after INA’s acquisition of FAG. Given

that this scenario creates the possibility

of a future global three-firm alliance,

and given that such joint venture

activities may not otherwise trigger

Hart-Scott-Rodino reporting

requirements, the Commission’s Order

requires INA and FAG to provide prior

notice to the Commission before

entering into any such joint venture

activities with NTN affecting North

America. This requirement will give the

Commission an opportunity to review

such activities for potential competitive

harm before they take place.

The purpose of this analysis is to

facilitate public comment on the

Consent Agreement, and it is not

intended to constitute an official

interpretation of the Consent Agreement

or to modify its terms in any way.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 01–31912 Filed 12–27–01; 8:45 am]

BILLING CODE 6750–01–P

GENERAL SERVICES

ADMINISTRATION

[GSA Bulletin FPMR D–259]

Federal Buildings and Space

This notice contains GSA Bulletin

FPMR D–259 which announces the

designation of a park on Federal

grounds. The text of the bulletin

follows:

To: Heads of Federal Agencies

Subject: Designation of Federal Building

Grounds

1. Purpose. This bulletin announces

the designation of a park on Federal

grounds.

2. Expiration date. This bulletin

expires May 11, 2002. However, the

Federal building grounds designation

announced by this bulletin will remain

in effect until canceled or superseded.

3. Designation. The grounds directly

in front of the John M. Shaw United

States Courthouse in Lafayette,