Source: http://www.justice.gov/atr/cases/f2500/2548.htm
Timestamp: 2014-10-21 13:00:12
Document Index: 286216470

Matched Legal Cases: ['§ 18', '§ 25', '§ 18', '§ 1331', '§ 22', '§ 1391']

Complaint : U.S. v. Aluminum Company of America and Reynolds Metal Company
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will need Acrobat Reader, which may be downloaded from the Adobe site. UNITED STATES DISTRICT COURT
) UNITED STATES OF AMERICA,)
Plaintiff,) Filed:
) v.) Civil Action No.:
ALUMINUM COMPANY OF AMERICA )
REYNOLDS METALS COMPANY,)
The United States of America, plaintiff, acting under the direction of the Attorney General, brings this civil action to enjoin Aluminum Company of America ("Alcoa"), the largest producer of aluminum for beverage cans in the United States, from acquiring the competing production facility of Reynolds Metals Company ("Reynolds"), the third largest producer. If the acquisition is permitted to proceed, it would cause the immediate shutdown of the Reynolds facility in Muscle Shoals, Alabama, and would substantially lessen competition in the production of aluminum can stock in the United States in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. As a result, American consumers would pay more for their beverages in cans. Alcoa and Reynolds are competing producers of a rolled aluminum sheet product known as beverage can stock ("can stock"). There are two types of beverage can stock -- body stock, which is used to make the body of a beverage can, and end/tab stock, which is used to make the lid and pull tab of a beverage can. In 1996, U.S. sales of body stock were $3.2 billion; U.S. sales of end/tab stock were $1.4 billion.
The beverage can stock business is highly concentrated, with the four largest producers accounting for over 90 percent of U.S. sales. Alcoa and Reynolds are the number one and two producers of end/tab stock, and together account for 67 percent of the market's production capacity. Alcoa and Reynolds are also the second and fourth largest producers of body stock.
The Reynolds facility in Muscle Shoals will be closed as a result of the transaction. Under its agreement with Alcoa, Reynolds must close down the facility (and pay the associated costs) before transferring ownership to Alcoa. Alcoa has no need for additional can stock production capacity, nor any present intention to use the facility to produce can stock. The transaction will thus result in a significant reduction in capacity to produce can stock.
The loss of Reynolds as an independent competitor in the production and sale of can stock will make it easier for the few remaining aluminum can stock producers to increase the price of body stock and end/tab stock in the United States. Ultimately, beverage consumers throughout the United States will pay those price increases. I. JURISDICTION AND VENUE
This action is filed under Section 15 of the Clayton Act (15 U.S.C. § 25), to prevent and restrain the violation by the defendants, as hereinafter alleged, of Section 7 of the Clayton Act (15 U.S.C. § 18).
Alcoa and Reynolds sell and ship substantial quantities of can stock and other products from locations in one state to locations in other states throughout the United States.
Alcoa and Reynolds are engaged in interstate commerce and in activities that substantially affect interstate commerce. The Court has jurisdiction over this action and over the defendants pursuant to 28 U.S.C. §§ 1331 and 1337. Venue is proper in this district under 15 U.S.C. § 22, and 28 U.S.C. § 1391(b) and (c). II.
Alcoa is a corporation organized and existing under the laws of the State of Pennsylvania, with its principal offices in Pittsburgh, Pennsylvania. Alcoa is the second largest producer of aluminum products in the United States and the world's largest integrated aluminum company. Alcoa is engaged in all phases of the aluminum business -- from mining and processing of bauxite to the production of primary aluminum and fabrication of products. In 1996, Alcoa had revenues in excess of $13 billion, more than three-fourths of which came from the sale of aluminum products.
Reynolds is a corporation organized and existing under the laws of the State of Virginia, with its principal offices in Richmond, Virginia. Reynolds is the largest producer of aluminum products in the United States and is the third largest producer of aluminum products in the world. Reynolds is also engaged in all phases of the aluminum business. Reynolds is the only major can stock producer that also manufactures aluminum beverage cans. Reynolds' 1996 revenues were almost $7 billion, more than 80 percent of which came from the sale of aluminum products.
Alcoa operates two rolling mills in the United States that are dedicated to the production of can stock